News that the Northern Virginia housing market continues to improve with several areas seeing appreciation as high as 8% can only be viewed as positive. The carnage of the ruptured housing bubble that was so clearly visible in many neighborhoods is receding.
Trickier to assess is the damage to the credit of former home owners who for whatever reason lost their homes to short sale or foreclosure. Living without enough financial cushion, a lost job, a sick child; things that in the normal course of a life might cause one to decide they should sell their home and live smaller until they were back on their feet, when combined with plummeting home values created a quagmire that dragged many people down the foreclosure/short sale path.
In speaking with my lender colleagues the news is not all doom and gloom for a buyer that has a foreclosure/short sale on their credit record. Depending on factors in place at the time of the foreclosure or short sale FHA Loans may still be a viable option. All buyers need to be super mindful of paying their creditors on time, even a few late pays can make a huge impact on your credit score.
Like most things in life–time will heal the wounds of housing market and the fall out of a short sale or foreclosure on your credit. Being mindful of due dates and credit balances and saving a reserve fund can help put you in a position to buy in 2011.