Foreclosures are not what they used to be. Since the lending extravaganza, more and more Northern Virginia homes are falling into foreclosure because homeowners cannot afford to pay their mortgage. What does this mean? Well for starters, there are some bargains out there. Rewind a few years ago. You see, during the hot market, a lot of buyers got in over their heads. They thought because sellers were making big profits on the sale of their home, they would be able too as well. However, these sellers had purchased their properties when they were priced low. These homebuyers that purchased at the peak of the market had no idea it was the peak. Lenders were giving out loans to anyone during this time without proof of income or work history. Most of the homebuyers took out ARMs (adjustable rate mortgages) that would expire a few years later. These homebuyers had no idea that they wouldn’t be able to sell their home for a higher price in a few years. Fast forward a few years later. The ARM loans are adjusting and the mortgage payments are increasing thousands of dollars. What do the homeowners do that purchased at the peak who had ARMs? Some of them don’t pay their mortgage and the home goes into foreclosure. So with that being said, there are foreclosure homes that are fairly new out there. These foreclosures are in more desirable areas than observed in the past, and are getting scooped up by responsible buyers.

The increase in foreclosure homes can also hint at the bottom of a real estate market. Whether you live in the DC metro real estate market or plan to move there, a real estate professional can examine statistics to track the lowest foreclosure sales. Of course not every foreclosure is in a great neighborhood. You will find some of the best foreclosure deals in neighborhoods with new construction that sold in 2005-2006 that were priced above the median home price for that area. Most of the foreclosures in Northern Virginia are popping up in the suburb counties of Prince William, Loudoun and Fairfax, Virginia.

If you keep an eye out on the foreclosure market, it will give you a good idea of how well homes hold their value in your market. Who knows, you might find a great deal.

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