Foreclosures in Frederick County

May 14th, 2008

To understand foreclosures in Frederick County and its impact on the region it is required to take a bird’s eye view. According to Wayne Six, an appraiser who is known for his blunt straight talk, foreclosures are having a two fold negative effect on the local property market. It is increasing the inventory numbers and the market is being pulled down because of this.

Under normal circumstances when there is buying and selling of property both the parties are well informed. They know what they want. But under the shadow of foreclosures the banks, being the sellers, are under duress to sell as quickly as they can as more and more units coming into the market press them down by weight of their sheer numbers. The bank may want a quick sale but that does not always take place. Many do not know that foreclosure sales take a long time – sometimes dragging on to six months. This leads to frustration and tension for all the concerned parties.

The agents are overcrowded with inventories and are finding it a hard task to find buyers under the present circumstances. This mood infects the entire region and locality. Foreclosures have always been there in the mortgage world but never had this tremendous impact. Today what is happening is because of the numbers that is depressing an already gloomy market. A good number of foreclosures concentrated in an area, dictates the fall in real estate prices in the entire neighbourhood. The local market reached its peak in June 2005, after which the slide downhill began. The most targeted are houses that are three years old or less located in new subdivisions.

Many stories are filtering through of frustrated borrowers unable to ward off eviction are resorting to damaging the houses and vandalizing it. To avoid this that many borrowers who are at the delinquent stage are being paid off by the banks to leave peacefully without taking revenge. The foreclosure sales are done on the basis of as-is – this means that part of the deal is that the buyer takes it in its present condition without questions.

During the housing boom years, before 2005, the price of real estate increased by 20% from year to year. Buyers were then vying with each other to pay fancy prices. But today when the situation has turned upside down the value of the house is often less than the loan amount.