Housing market tries to recover

By Allison Brophy Champion

Published: November 16, 2008

As in communities nationwide, the Culpeper County real estate market continues to be a mixed bag.

Price-wise, year over year since October 2003, the local market has come full circle — houses now sell for about what they did back then.

However, following the rise and fall of the building explosion and the subsequent mortgage credit crisis, there are many more houses on the market now than then.

The good news now is home prices in Culpeper are low — and falling — if you’re looking to buy. But it’s a bad time to sell if you’re looking to make a profit.

Nearly one-third of Americans who sold homes in the past year lost money, the Richmond Times-Dispatch reported Thursday.

More bad news locally is a flood of foreclosures that continues to crush Culpeper County. Where the market goes next is anyone’s guess.

Foreclosure deluge

In September and October alone, 79 houses went into foreclosure, according to county records. That’s a 139-percent increase over the same two months last year when there were 33 foreclosures in Culpeper.

So far this year — through Nov. 7 — 387 houses went into foreclosure, already more than twice the 2007 total of 180.

In 2006, 33 Culpeper homeowners lost their homes to foreclosure.

Experts expect a lot more foreclosures if housing values continue to deteriorate and owner walk away from their mortgages.

It’s what’s selling

Julie Emery, a real-estate broker in northern Culpeper County, said what’s selling these days are mostly foreclosures.

“Your average homeowner remains largely unwilling or unable to compete with the banks on price,” she said. “And, credit remains tight.”

Nationwide, one in seven homeowners owe more on their mortgage than what their homes are worth, according to Zillow.com.

On the bright side, Emery added, the foreclosures “are moving through the system.”

“We need to get those sold before there can be any kind of price stabilization,” she said.

Emery said she’s seeing foreclosure properties being left in better condition, which speeds up the resale process.

In addition, the ongoing reduction in gas prices could begin to make Culpeper “more attractive again from a commuting perspective,” she said.

Home prices keep falling
Emery’s take on year-over-year figures from Metropolitan Regional Information Systems is that the local market continues to improve in terms of reduction in inventory and more sales. But prices continue to fall, she said.

“Given what’s going on in the rest of the economy, I would suggest that prices are likely to continue to fall for the foreseeable future,” Emery said.

A closer look at the October MRIS figures from 2003 to 2008 shows the average selling price for a house in Culpeper County peaked in 2006 at $382,763.

The average selling price last year was $301,134.

Last month in Culpeper, houses sold for $242,874, on average — very close to the $243,825 average from 2003.

But since 2006, the average selling price fell 37 percent.

Compared to this time last year, the average selling price fell 19 percent.

Inventory falling, too
Over the past six Octobers, the total number of houses on the market in Culpeper ballooned in 2007 to 816, compared to a low of 212 in 2003.

Active residential real estate listings in Culpeper County as of last month were 623, according to MRIS.

On average, houses stayed on the market for 149 days last month — down from 178 days last year, but way up from the low of 52 days in October, 2005.

But more houses are selling compared to last year.

Last month, market interest rebounded with 58 housing units sold in Culpeper compared to just 27 last October — the lowest number in the past six years.

Home sales in Culpeper County peaked in October of 2004 with 73, according to the market figures.

The Obama effect?

The day after America elected Barack Obama its next president Jim Charapich, director of the Culpeper County Chamber of Commerce, took a positive outlook on local commerce.

“What I think is most important is that the economy in Culpeper is still going to be strong regardless of who was elected,” he said. “And it’s a great time to buy a house.”

But while low housing prices are good for a buyer, it’s not so on the other end, especially if a house is worth far less than what was borrowed.

Said Emery, “It remains to be seen what the Obama administration will do about all this in January and how that will impact us. The very good news is that the government finally seems focused on real estate, where, I’d argue, our current financial woes started.”

Allison Brophy Champion can be reached at 825-0771 ext. 101 or .

Culpeper County real-estate market trends
October 2003
56 units sold
average selling price: $243,825
average days on market: 60
active listings: 212

October 2004
73 units sold
average selling price: $299,004
average days on market: 84
active listings: 247

October 2005
67 units sold
average selling price: $325,889
average days on market: 52
active listings: 452

October 2006
44 units sold
average selling price: $382,763
average days on market: 111
active listings: 706

October 2007
27 units sold
average selling price: $301,134
average days on market: 178
active listings: 816

October 2008
58 units sold
average selling price: $242,874
average days on market: 149
active listings: 623

SOURCE: METROPOLITAN REGIONAL INFORMATION SYSTEMS INC.