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Home Sale Blues: Foreclosures Up, Recovery Stalled
Some recent real estate statistics bode ill for Richmond's economy. A quarter of the houses sold are in foreclosure while a home-sales recovery appears to have stalled.
The bottom line appears to be that Richmond's recovery isn't creating many jobs, families remain either unemployed or must accept lower pay, and a real turnaround may be another nine months away.
RealtyTrac.com, a real estate data service, reports that new foreclosures reached a high point in Chesterfield County in May with 322, with Richmond reporting 241 and Henrico County 235.
Moreover, an improving trend in sales came to an end in April, says Laura Lafayette, chief executive of the Richmond Association of Realtors. “We don't have numbers for June yet but the pace has slowed,” she says.
She attributes the downturn in part to the end of President Barack Obama's housing tax credit of $8,000 to first-time buyers and $6,500 to sellers if they lived in their houses for more than five years. Buyers who wanted homes this summer may have bought early to take advantage of the credit, which expired April 30.
Richmond's high foreclosure rate could make for great buys, but it also tends to dampen sales prices, Lafayette says.
The news behind the number of foreclosures isn't good. Lafayette says a first round of foreclosures came when homeowners with adjustable-rate mortgages could handle rate hikes. This second round involves homeowners not finding new jobs after being laid off or having to accept new work that pays less — factors that indicate that Richmond's hard-hit economy has a way to go before recovering.
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