Foreclosure Purchase and Surrounding Properties
Posted by SaveAFewThousand.com Blogging Team on Tuesday, January 11th, 2011 at 4:58pm.Question: How does the purchase of foreclosures affect the value of surrounding properties?
Answer: Foreclosure purchase positively affects property values in a neighborhood or city, but it won’t affect them to the point that they will be worth significantly more than homes in surrounding areas.
Let’s use Springfield VA real estate as an example. For argument’s sake, let’s say that Springfield has an average value of $400,000 per property. The foreclosure crisis hits Springfield hard; home values drop by 50%. Properties are now averaging $200,000. A couple of Springfield homes go into foreclosure and are now standing empty.
Unfortunately for the Springfield homeowners who bought during the bubble, even if some savvy homebuyers purchase these foreclosures, the value of the neighborhood still isn’t going to go up significantly enough that it will make any difference.
It WILL NOT cause Springfield to leap in value and become The Little Neighborhood That Could. The foreclosure crisis is still alive and well and NoVa homes are still going to be affected by it.
However, all is not lost for Springfield. Foreclosure purchases WILL change Springfield’s appearance and make it more attractive to future home buyers. A neighborhood that appears well-tenanted and well-kept is, of course, going to garner more interest than a neighborhood with a couple of homes that are obviously not being kept up and show signs of deterioration.
Also, the more people who buy their Northern Virginia foreclosure homes in Springfield, the more property taxes get paid and the more money is available to the local government to spend on community-focused activity, including construction and maintenance that keep the roads in repair, the sewer working and the city a generally safe place to live.
There is no question that the foreclosure crisis has hit some people hard and their home will no longer be the great investment that it seemed to be when the housing bubble was at its peak. What they can do about it is another story that we’ll touch on later. In the meantime, for more information about Northern Virginia foreclosures and what to do if you’re in distress, contact David Zadareky – CDPE certified and an expert in the NoVa foreclosure process.
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