There may be fewer foreclosures in the Washington real estate market because of the paperwork scandal last fall, but data show that the areas with the highest numbers of foreclosure properties remain consistent with last year.
Prince George's County has the most, followed by Fairfax and Prince William counties, although Daren Blomquist of RealtyTrac said part of the reason is that these counties are large and highly populated. Montgomery County and Fauquier County rounded out the area's top five.
| By the numbers |
| » Number of D.C.-area homes with a foreclosure filing in February 2011: 1,213 |
| » Number of D.C.-area homes with a foreclosure filing in February 2010: 3,851 |
| » Number of D.C.-area foreclosure sales in fourth quarter 2010: 2,155 |
In Prince George's, one in every 742 listed properties is a foreclosure, while the rate is one in 548 in Prince William and one in 540 in Fairfax.
"Many of these areas during the real estate boom had a lot of selling going on," Blomquist said. "Those transactions that occurred during the boom are generally where the most foreclosures are."
The promise of getting a residence at a rock-bottom price does not always pan out, however, as many area foreclosures are being snatched up by investors and buyers who can pay cash.
Dave Webb of Hudson & Marshall, which has foreclosure properties up for auction in the metro area, said 70 percent of those buying their auctioned properties are investors, and 86 percent of them pay cash. The other 30 percent are people who intend to occupy the properties, and 33 percent of them are paying cash.
Webb said it does not always hold true that buyers who need to finance are at a disadvantage when it comes to bidding on foreclosure properties.
"Typically those who are financing may actually be owner-occupants, and willing to outbid cash-paying investors interested in the same assets, thus winning the bid," he said.
The two main groups of foreclosure buyers are investors and first-time homebuyers who do not have to sell another property to buy, Blomquist said. First-time homebuyers who need financing can get beat out by cash buyers, he said, because a bank will consider a cash sale a far better risk.
Over the entire metro area, Blomquist said 60 percent of foreclosure buyers are first-time homebuyers, while investors make up about 40 percent.
"In a normal market, investors make up about 20 percent," he said. "What you're missing here are the move-up buyers."
Jonathan Miller, president of RealEstate Business Intelligence, said cash-paying investors should not scare off homebuyers who need financing.
"There is so much inventory that there should be plenty of choices for everyone," he said. "I don't think investors are pushing first-time homebuyers out."
Foreclosure properties still made up 24 percent of all home sales in the District in the fourth quarter of 2010, data show, with 2,770 such properties sold.
"In a normal market, foreclosure properties would have made up 1 to 5 percent," Blomquist added.
