Luxury Foreclosures – washingtonpost.com
The foreclosure signs that have been sprouting up in less-affluent communities since 2006 are beginning to appear in the well-off suburbs, attached to houses that once cost $1 million or more. Although those kinds of homes are in the minority now, real estate agents predict the numbers will swell.
In Loudoun County, 60 houses priced over $750,000 are among the 932 foreclosures and short sales — an exit strategy of selling the house at a loss with the bank’s blessing to avoid foreclosure.
Affluent neighborhoods have been able to stave off foreclosure longer, but the effects of once-popular loans, such as adjustable-rate and interest-only mortgages, are beginning to take their toll, economists and real estate agents said. The consequences are being seen in places such as Loudoun County, where the rapidly expanding population and income levels meant razing dairy farms for new subdivisions over the past two decades, as well as Fairfax and Montgomery counties, where new subdivisions proliferated and demand drove up prices.
While the expanding subprime market enabled lower-income borrowers with uncertain credit histories to buy and refinance property, interest-only mortgages allowed middle- and upper-income home buyers — and investors — to buy beyond their purchasing power, said Robert E. Lang, director of the Metropolitan Institute at Virginia Tech in Alexandria.
“Who would have imagined that people would use this as an excuse to heavily leverage themselves?” said Lang, noting that higher-income people found ways to buy bigger, more expensive houses, endangering themselves just as lower-income, first-time buyers did. “And now they’re caught in the same way.”
After six years of record-shattering growth and building boom, Loudoun County faced one of the region’s steepest declines in home prices last year. The median price of single-family houses and townhouses sold last year was $492,000, down 8 percent from $535,000 in 2006, according to a Washington Post analysis.
Madhaus sent this in the other day. Could this happen in the Bay Area? Well… maybe. But in the Real Bay Area? Nah.
Let’s face it, this article was about Norther Virginia. And let’s face it, which company was the shining star of that area? Yep: AOL.
Is AOL the same as Google, Apple, VMWare, Facebook, Twitter, and all the other amazing Web 2.0 startups we have here? Nope. And that’s why Loudoun County is dying. Heck, they also don’t have the amazing GreenTech jobs that are about to explode here, nor do they have Biotech. And what’s Tyson’s Corner compared to the hot new Cupertino Square?
So this article is complete bunk. It’s comparing rotten bananas with amazingly beautiful and ripe CJ Olson cherries.