No end in sight?

Culpeper County continues to lead the state in foreclosures.

According to the latest tally by RealtyTrac — an online market tracker — Culpeper ranked seventh among Virginia counties hardest hit by foreclosures in the first quarter of this year.

The rankings are based on the number of foreclosure filings (default notices, auction sale notices or bank repossessions) sent to households.

In Culpeper, one in every 98 households received such a notice in the first three months of this year, according to RealtyTrac.

An analysis of county government figures showed Culpeper experienced a 45 percent increase in the number of foreclosures in the first quarter of the year compared to last year.

Whereas 116 residential properties went into foreclosure in January, February and March of 2008, 168 entered foreclosure in Culpeper during the same time period this year.

RealtyTrac put the figure even higher for the first quarter of 2009 in Culpeper, reporting 192 homes in some stage of foreclosure through the end of March. February was especially severe, with 106 properties in foreclosure, including two planned developments totaling 64 vacant lots.

A report this month from the governor’s Virginia Foreclosure Prevention Task Force said to expect more of the same for several years to come.

“Virginia’s mortgage debt problem remains substantial and will take time to unwind,” said the report, titled, “Continuing Challenges Face a Recovery of Virginia’s Mortgage Market.”

While the worst of the subprime mortgage crisis may have run its course, a second wave of bad loans of the “option payment ARM” or “Alt-A” variety have yet to funnel through the system, the task force report said.

Expect these other nontraditional loans to start adjusting up in Virginia later this year, the report said, extending through 2011. Substantially higher monthly mortgage payments resulting from the loan “reset” coupled with rising unemployment “will keep defaults high for some time.”

In Virginia, the report said, seriously delinquent home loans are at a three-decade high: up from 0.49 percent at the end of 1979 to nearly 4 percent in 2008.

And prices keep dropping.

The average selling price for a foreclosure house in Culpeper last month was $181,558, according to Realty Trac.

But there is some good news: According to Metropolitan Regional Information Systems, another online market tracker, more houses sold last month in Culpeper compared to the previous March — 48 vs. 32.

Of the 48 homes sold, 21 were financed with Federal Housing Administration loans backed by the federal government, marking a shift away from the private mortgage market, following its collapse. Seven paid with cash.

In October 2005, near the height of the market, no FHA loans were used to purchase homes in Culpeper.

MRLS listed 332 active residential listings in Culpeper last month and a drastic 31 percent drop in the average selling price over last year — $252,431 vs. today’s $173,100.

The majority of homes sold in Culpeper spent more than four months on the market.

Still, Amissville real estate broker Julie Emery, who writes a regular blog on market conditions, feels Culpeper’s market is making positive progress.

What the agents are saying
“We’re down to eight months of inventory. Last year at this time there were over 800 homes for sale,” Emery wrote in a recent post. “There is a March jump in new listings in Culpeper and other counties, but nothing like the jump we’ve seen in recent years. As long as the net result is still declining inventory, the indicators seem pointed in the right direction.”

Though home prices continue to fall in Culpeper County, Emery predicted “some stabilization” by the end of the season, saying, “There are already signs of that in the bidding wars on properties priced under $300,000.”

Local Re/Max Realtor Beverly Herdman put the local inventory at five months. She said it has quickly shifted into a seller’s market as banks postpone many foreclosures and interest rates continue to fall.

“Buyers want to buy the inventory, and the banks are doing inventory, trickling the foreclosures onto the market a few at a time,” she said.

Herdman said she recently achieved certification to assist homeowners from preventing foreclosure by selling properties through a “short sale” in which a broker negotiates with the bank for a lower price than on the original loan. She said banks want to work with troubled homeowners on short sales, but not after the property has gone into foreclosure.

Herdman encouraged people to be proactive in that regard and to contact the bank while they are still current on their mortgage payments.

To date, 167 homes have sold in Culpeper so far this year, she said. Of those, 66 percent were foreclosures, 22 percent were traditional sales and 19 percent were short sales.

“If we could help the homeowners who are under stress before they hit foreclosure,” Herdman said, “we could change those ratios.”

Culpeper County foreclosures
2008 Q1: 116
2009 Q1: 168 *
* Figure includes 64 vacant lots in two planned developments

One in every 98 households in Culpeper was in some stage of foreclosure in the first quarter of 2009, according to RealtyTrac

Culpeper County home sales
March 2008: 32 sold
March 2009: 48 sold

Average selling price
March 2008: $252,431
March 2009: $173,100
SOURCE: MRIS Inc.

Virginia localities with the highest foreclosure rates
Manassas City
Prince William County
Fairfax City
Stafford County
Spotsylvania County
Caroline County
Culpeper County
Loudoun County
Fredericksburg
Orange County

SOURCE:
REALTYTRAC