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Posted April 25, 2009 | Copyright © The Northern Virginia Daily
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Area home sales up in first quarter

Centex home sold
A sign on Friday identifies this Centex home under construction off Tasker Road outside Stephens City as sold. Dennis Grundman/Daily

Foreclosed properties a factor in VAR report

By James Heffernan -- jheffernan@nvdaily.com

Northern Virginia and parts of the upper Shenandoah Valley appear to be setting the stage for a recovery in the state's housing market.

In the Winchester-Front Royal area, home sales in the first quarter were up 5 percent over last year, and pending sales -- those properties under contract but had not closed as of March 31 -- were up nearly 80 percent, according to a Virginia Association of Realtors report.

The Blue Ridge region joined Dulles, Fredericksburg, the Greater Piedmont and the Washington metro area in posting a percentage increase in sales for the quarter.

The data is especially promising given that the first quarter is typically the slowest period of the year for home sales and many areas of the state tend to lag behind Northern Virginia, economist Rosemary deButts told reporters during a conference call Thursday morning.

Statewide, sales were off 4.7 percent compared to the first quarter of 2008.

Prices in the northern part of the state, which had reached unsustainable levels in 2006, continue to tumble.

In the Winchester-Front Royal area, the first-quarter median sales price, or midpoint of the data, was down 28 percent year over year, while the average price fell about 26 percent.

In the VAR's Massanutten region -- Shenandoah and Page counties -- prices were down about 17.5 percent, and sales were comparable to 2008 levels.

Some of the price declines in the northern valley can be attributed to "the aggressive actions of lenders who are wanting to unload properties," said Trish Snyder with Coldwell Banker Four Seasons in Mt. Jackson.

However, statewide the median sales price was up 7.8 percent over the fourth quarter of 2008, suggesting that prices have reached a bottom and are now on the rise.

Snyder and real estate agents in the Manassas and Arlington areas reported that at least some of their increases in sales are coming from bank-owned properties. Virginia ranked 10th in the U.S. in foreclosures in the first quarter, though its figure was down 10.7 percent from the fourth quarter of last year.

John McClain, senior fellow in the Center for Regional Analysis at George Mason University, said the majority of the subprime mortgages that led to the housing bubble already have reset, but a second wave of foreclosures from other adjustable-rate loans is expected to crest later this year.

"One of the reasons the Obama administration put in the [$75 billion] foreclosure modification program is to head off that second wave," he said. "Hopefully people will refinance so that won't happen."

McClain said there were some encouraging signs during the first quarter, particularly in March, that incentive programs such as the $8,000 tax credit for first-time home buyers are starting to have an effect.

But Snyder said that's not yet evident in the valley.

"We're seeing some first-time home buyers, but for many the incentive is not good enough for them to want to go out there and buy. ... They're looking, but they're still worried about making the commitment due to the doom and gloom they're hearing in the media."

Those who are purchasing "tend to be sticking with properties that are very inexpensive -- less than $100,000," she said.

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