Tuesday, May 31, 2011

The state of Brightwood real estate, by Eric Brooks

Recent renovation, 900 block of Sheridan Street NW

Eric Brooks is a realtor with a lot of experience working in Brightwood and the surrounding neighborhoods. He stopped by to share some of his observations about real estate trends in our area.

Everyone knows the real estate mantra "location, location, location". But unfortunately foreclosures have been another reality over the past few years. Well, there is some recent good news that I’d like to share: for the first time in many months, there are no foreclosed townhomes or detached homes ‘active' on the market in Brightwood.

In communities that have had many foreclosures, sale prices for all properties are affected. When a homeowner leaves a property in foreclosure, the property is often damaged in some way – examples include missing appliances or water damage. Most loans used by buyers require a property to be in “livable condition”, meaning that foreclosed properties can often only be bought by cash investors - normally at 10 to 15% below market price. This leads the surrounding community into a downward trend, as each sold property is used as a comparable for future buyers.

Brightwood residents who are keeping an eye on real estate in the neighborhood may have noticed fewer investors and more first-time buyers visiting open houses of late. This could be an indication that the tide is changing, and foreclosures are drying up, which will lead to a more normal market. While this does not mean things are going to improve overnight, I think it shows a solid stabilization of the market, and may give buyers more confidence to buy in the neighborhood. Sellers in Brightwood have seen a steady drop in prices since 2007, so the start of a leveling-out of pricing may be seen by owners as a “big win”.

Interest rates continue to hover in the mid 4% range, but there are some changes for FHA buyers on the horizon that buyers need to discuss with their lender. Here is a more detailed look at the current numbers for 2011:

January through April "Sold Properties" numbers:
  • 27 homes sold ranging from $177,000 to $699,000
  • 6 of these were foreclosed homes and 1 was a short sale
  • 4 condos sold during this same time period, all below $300,000
Current "Active Properties" on the market:
  • 27 homes are for sale ranging from $150,000 to $640,000
  • 4 Shorts sales, 3 on Sheridan Street and 1 on 8th Street
  • 22 condos are on the market from $69,000 to $300,000 (1 is a foreclosure and 3 are short sales)

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