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Uptick in foreclosures no cause for alarm, experts say
The number of foreclosures in Rappahannock County during the past 13 months is equal to the number the county experienced during the prior five years.
In 2007, there were 10 foreclosures in the county, according to public notices run in the Rappahannock News. Nine of those foreclosures came in the final five months of the year.
Two foreclosures have been listed so far in 2008.
For the years 2002 through 2006, Rappahannock had a total of 12 foreclosures for an average of 2.4 per year, according to records at the county Clerk of the Circuit Court's office.
Still, the situation in Rappahannock remains relatively stable. For example, Culpeper County had 178 foreclosures in 2007, compared to 33 in 2006, according to an article in the Culpeper Times.
"Compared to the counties around us, we are an oasis of calm," Amissville-based real estate broker Julie Emery said.
But the number of foreclosures in Rappahannock in 2007 was high by historical standards, Emery said. And she expects the number of foreclosures to be higher than average in 2008 as well.
"You'd have to look at what's going on in the next six months to see if [the recent increase in foreclosures] is a trend or an aberration," said Jay Miller, principal broker and owner of Piedmont Property Inc.
"Rappahannock does not see a lot of foreclosures because it's usually higher priced properties with people that have their financial ship in better order," said Realtor Phillip Strange. "It would be rare to see someone with an adjustable rate mortgage in Rappahannock. We're very isolated from that."
"And this is not their first home," Miller said. With few first-time home buyers in Rappahannock, that means most people purchasing property have been through the process before and probably understand it better than the average person.
Mike Leake, president and CEO of Rappahannock National Bank, said RNB does not have any foreclosures in the county.
"We feel very lucky, but a lot of it is the result that we were not involved in subprime lending," he said.
Leake said the bank has seen a "slight increase" in delinquencies on consumer-related loans, such as automobile and home-equity loans. "But nothing for us that we would deem unacceptable," he said.
The waiting game
Rappahannock, like many areas of the nation right now, is a buyer's market.
"Our biggest impact is days on market," Emery said. "We haven't seen the price drops we've seen in other counties, but it takes longer [for a house to sell]."
Because they know there's more inventory out there, buyers are pickier now, she added. "If you're not realistic with your pricing, no one's even going to look."
If a property is adequately priced, it will likely be on the market for four to six months, Leake said.
"It's slower than it was in the past, but our loan volume is still very good," he said. "The refinance market has picked back up as a result of the low interest rates."
Strange said there are 61 properties currently listed for sale in the county and four under contract.
Forty-two single-family homes sold in the county last year, he said, compared to 55 in 2006. Another big change is that just one of the homes sold in 2007 was sold for more than $1 million, while eight homes in 2006 fetched at least $1 million.
"The big rollers just aren't coming out like they did two years ago," he said.
But Strange expects things to pick up after winter is over.
"I think we're going into a more seasonal market where in the winter things slow down," he said. "In the spring, I expect to see more listings."
Miller said land in the county is still selling, but houses in the $600,000-to-$800,000 range are the slowest items moving on the market.
Still, prices are not dropping much, he said. "I don't see anybody, unless they absolutely have to sell, reducing their price."
Miller said the media has portrayed a more dire picture of the real estate market than is really the case. He said that, with interest rates falling and prices flat, it's actually a great time to buy a house.
Although the real estate market in Rappahannock is relatively stable, Leake said instability in surrounding counties could still have an effect here. "A lot of people in Rappahannock work in the real estate field and that probably would be impacted by what's going on in other markets," he said.
Miller said the high volume of government jobs, plus the employment that comes from suppliers, contractors and other workers that benefit from government activities makes the region more stable economically than other parts of the nation.
"The best thing about our area, or the D.C. area, is if we do have a slowdown in the economy or a recession, we're generally the last area of the country that actually feels the effect of the recession and the first one out," he said.
E-mail the reporter at kallen@timespapers.com.
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