The number of distressed homes being sold in Hampton Roads has fallen to its lowest level since the hard economic times that began in 2008.
Distressed homes are those that are foreclosures or short sales. Short sales are basically homes that are sold by a financially distressed homeowner at a price that is less than owed on the mortgage.
Distressed homes accounted for just 9.48 percent of all homes listed last month while the number of distressed homes sold accounted for just 7.89 percent of all settled sales in the region, according to data from the Real Estate Information Network.
That percentage peaked in March 2011 when 42.8 percent of homes sold were distressed.
How might these low numbers impact the local market?
“When you have several homes in the same neighborhood or subdivision that are distressed, it impacts the overall property values for that area,” said Stephanie Walsh, a Realtor with Long and Foster Real Estate’s Oceanfront Office. “Fewer distressed properties spread over a wider area helps property values overall.”
Walsh said fewer distressed homes is a sign that homeowners can actually afford their homes. Likewise, even with a low inventory, the number of home sales per month continues to grow, and that increase in homeownership typically reflects a strong local economy.
“Hampton Roads has a low inventory across the board,” Walsh said. “I do think this indicates that most homeowners who were upside down after the market crash have regained equity.”
However, she pointed out that the number is down only 1.32 percent over the past year, meaning the lower number of distressed homes isn’t a new development, just a continuing decline to a new benchmark.
Walsh said the numbers appear to indicate that home values in the region have stabilized and also that current homeowners may be wary of “jumping back into the market.”