The Daily Press reports from Virginia. "The economic boom times are over for Hampton Roads, says Old Dominion University's State of the Region report for 2006. Slower increases in defense spending this year and cooling of the housing market mean the region's rate of growth will fall slightly below the nation's for the first time in years."

"'We're not heading into a disastrous time; it's not going to be as good,' said James Koch, professor of economics."

"The slowdown in the region's economy will drive push deceleration in the region's housing market. That market currently sees homes overvalued by about 20 percent, twice as overvalued as last year at this time."

"That doesn't mean prices are due to fall, Koch said. It means sellers won't make as much of a profit as they might have expected, and homes will stay on the market longer. A house listed at $400,000 might fetch $350,000, or sellers might find themselves offering incentives such as closing costs."

"The high prices relative to incomes, unemployment, building costs and mortgage interest rates also mean that renting has become even more attractive."

"'Everyone who wanted to buy a house has bought one,' said Aubrey Layne, who manages 10,000 apartments and condominiums in Hampton Roads."

"Housing experts see trouble ahead is for those hoping to sell condominiums. Condominium permits rose to 3,513 in 2005 from 930 in 2000. Koch predicted that people who bought condos hoping to sell them would instead become landlords at least for a few years. 'They'll function as apartment houses until the market turns around,' Koch said."

"'I can tell from personal experience, knowing people who have purchased three or four units in downtown Norfolk, and they don't intend to live in any of them, they're headed for disappointment,, he said."

The Virginia Pilot. "'All things considered, our economic prospects for the remainder of this decade are much less favorable than they have been over the past few years,' the forecasters said in a sobering assessment of the region's prospects. 'The 'good old days' have passed.'"

"'Despite our high home prices, we do not expect a marked decline in the price of single-family housing across the region,' the report said. 'Instead, we anticipate market sluggishness that will generate... larger inventories.'"

"The prices of condominiums, they said, are especially vulnerable to declines because of an abundant supply. 'Builders and condominium owners will find it difficult to sell their inventory and increasingly will rent, rather than sell, that inventory,' the ODU forecasters predicted."

"Improvements in military pay and benefits provided a powerful stimulus for the Hampton Roads economy between 2001 and 2004. 'We're now dealing with much more modest growth rates in Department of Defense spending plus the removal of DoD assets and personnel from the region,' the forecasters wrote. 'The economic picnic is over.'"