The Herndon Real Estate Market 2010-2011

PRICE OF DETACHED SINGLE FAMILY HOMES CONTINUE TO RISE!!

 

In 2010, 233 detached single family (DSF) homes were sold in Herndon at a median sales price of $375,000.  By 2011, the number of DSF homes sold had decreased by 10% to 210 (see chart below) but the median sales price increased to $400,250.

Number of DSF Homes Sold in Herndon 2008-2011

Despite the continued drop in the number of homes sold  from 421 to 210, over the past four years,  the median sales price has increased over the same period from $340,083 to $400,250 (see chart below). The increase in price could indicate that price stability is finally returning to Herndon’s housing market. Nonetheless, it is and will remain a buyer’s market for the foreseeable future. Interest rates, while at historic lows, appear unable to attract additional buyers.

The wild card in the housing market continues to be the foreclosures and short sales.

In 2010, seventy-nine of the 333 listed properties were bank-mediated. This represented 24% of the market. Of the 233 DSF homes sold that year, 67 or 29% were bank mediated. By 2011 the number of bank-mediated properties on the market had declined to 56 or 27% of market. Of the 210 homes sold in 2011 43 or 20% were bank-mediated properties. While bank mediated homes declined, they still represent a significant share of the DSF homes market in Herndon.

Another factor expected to influence the housing market this year is the pending expiration of The Mortgage Forgiveness Debt Relief Act of 2007. This law generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

This looming event could cause an increase in short sales as homeowners who are underwater with their lender  reconsider their financial situation. If they expect to have to sell their home in the near future, should they do so before the end of 2012?

For more info on the Herndon and surrounding communities go to http://www.movewithjc.com

Advertisements