RICHMOND – While fewer home loans are going into default, a combination of a backlog of foreclosures and a slump in home purchases could threaten the recovery in Virginia’s housing market.
“We are at a dangerous point at the beginning of another negative cycle that pulls the market somewhat down from where it is,” Barry Merchant, a senior analyst for the Virginia Housing Development Authority, told the Virginia Foreclosure Task Force on Tuesday.
Since the end of the 2010 tax credits for new homeowners, Merchant said, fewer houses on the market are being sold. This combined with other factors means that that task force “could look at a much longer recovery for the state.”
“I think at the moment I’m a little pessimistic only because we’re seeing a weakening again of the whole purchase market,” Merchant said.
Despite this pessimism, Merchant said he expects the housing market to return to normal by the end of 2012.
A recent task force report found a spike in the number of Virginia homes entering foreclosure during the third quarter of 2010. During that quarter, there were active foreclosures in Virginia – about 4,100 more than in the corresponding period of 2008.
About the Task Force
The Virginia Foreclosure Task Force was created by Gov. Bob McDonnell in 2010 by an executive order. Its goal is to propose a housing policy for Virginia. The advisory group’s recommendations are due in November.
The task force has 22 members. It is chaired by Terrie Suit, the assistant to the governor for commonwealth preparedness.
The task force has scheduled meetings for April 19, May 17 and June 21. It then will take a break to collect data and consult experts.
The group’s timetable calls for meetings on Sept. 20 for more focused discussions on key issues, perhaps with help of an economist; on Oct. 18 for finishing its recommendations; and on Nov. 15 for wrapping up its work.
On the Web
For more information about the Virginia Foreclosure Task Force, visit www.virginiaforeclosureprevention.com.
The task force is not the only organization helping Virginians avoid foreclosure. Another organization is the Capital Area Foreclosure Network.
On Wednesday, the network and the Housing Initiative Partnership announced they are launching a Spanish and English foreclosure prevention hotline for Virginia, Maryland and Washington, D.C. The toll-free number is 888-794-8830.
“Too many of our region’s residents are paying thousands of dollars to scam artists who can do nothing to help them. By calling the hotline, residents can get connected to nonprofit housing counselors near their home or work,” said Paul DesJardin, co-chairman of the foreclosure network.