‘Pendulum Swings Toward Buyers’ In Virginia Beach
The Virginia Pilot has this report on that housing bubble. “Years of hefty returns and attractive offers made real estate in South Hampton Roads a seller’s market, but the latest market data show the pendulum swinging back toward buyers. Properties are staying on the market longer, and more buyers want home inspections and help with closing costs.”
“‘The market has cooled off quite a bit,’ said agent Jim Willis in Virginia Beach.”
“Across the region, the median sale price was $229,900. That’s $32,150 more than a year ago. Median prices also rose compared with January’s levels in some locales. But those gains were far less dramatic, 2.7 percent in Norfolk, 4.6 percent in Virginia Beach and 3.7 percent in Suffolk, while prices were flat in Portsmouth and fell by $9,900, or 3.7 percent, in Chesapeake.”
“In Virginia Beach, which provided 38 percent of the area’s sales in February, the average market time more than doubled, to 46 days from 22 a year ago. In Portsmouth and Suffolk, properties lingered on the market for two months or more on average.”
“Buyers’ agents are taking notice, and enjoying it. ‘We had the best February for buyers than we’ve had in four years, said Maggi Davis, broker-owner in Virginia Beach.”
“Willis said buyers are less willing now to waive home inspections in order to seal a deal. Plus, sellers are beginning to offer more closing-cost assistance in order to attract buyers.”
“January and February are typically slow months in real estate, with sales and prices heating up in the spring months. February’s lengthened market times and less enthusiastic buyers, however, could mean something more than a seasonal hiccup, Willis said.”
“‘I think it’s going to pick back up, but the indicators I’ve had is that it won’t be the appreciation and the feeding frenzy that it has been for the last three years,’ he said. ‘It’s legitimately more of a buyer’s market than it has been.’”
Thanks to the reader who sent this in. Glad to finally have something to post on Virginia Beach.
Thanks, Ben! Look forward to people’s comments as my fiancee and I continue to save for a down payment to eventually pay for a house the ‘right’ way. VB is not yet as bubblefied as other areas but appears headed that way. Thanks in advance for any comments.
I did my regular Friday morning search on Hampton Roads (including Va. Beach). Inventory is still creeping upward, but particularly for sfh’s in Va. Beach, the median asking price is now up at $400k and condo asking prices continue to increase as well.
The reduced price patio home in the development I posted about the other day - hasn’t sold yet.
BTW, I also did a little number crunching from the Housing Tracker Site. Of 41 metro areas for which statistics have been posted for 6 months or more, 18 show increases over two percent (with New Orleans and Albequerque over 10%), 12 stalled (+/- 2%) and 11 declining (with San Diego and Phoenix leading the way). Of the 18 markets still with increasing over 6 months, 3 have stalled over the last 3 months, 15 are still advancing.
It adds up to a national market showing “moderation” not a “crash” as indicated by Angry Bear and Calculated Risk.
Baka - Granted there is a lot of hype on both sides of this debate, but, historically, bubbles/manias end on the upside with hysteria - panic buying - which we’ve seen in many markets. Once that settles down, you will see “moderation,” followed by orderly, non-alarming price declines. At some point in the latter stage, panic sets in. Know one knows when, whether or to what extent, but that is the historically acccurate model. And it doesn’t matter if we’re talking tulip bulbs, stocks or houses. The point is that it is way too early to breathe easy if you are are holding a big bag of properties.
I understand and agree. In fact, check out Angry Bear’s graph (that confirms my personal sense these last few years). The boom was actually pretty moderate until the end of ‘03, then really took off in ‘04, and ‘05 was just a buying panic. I actually expect ‘05 prices to unravel by the end of this year. ‘04 prices might take longer.
I was just pointing out that, at present, on a national average, there’s no plunge yet.
What about all those housing developments and condos under construction and those unbuilt but, permitted.
Excess inventory has always been the scurge of any business and real estate is not excluded>
Thanks from me, too, Ben. I don’t live in VA Beach (I’m in SF Bay Area) but have an interest since I own property in Newport News, which is a stone’s throw away. I’ve owned there for 6 years; not interested in selling, though….just good to have info on the area.
BayQT~
I’m never sure where to post snippets of subscription only stories…
Here’s one from Miami’s Daily Business Review of March 2, 2006:
Facing lackluster sales and declining prices, the developer of the Four Seasons Hotel & Tower on Brickell has filed two lawsuits in Miami-Dade Circuit Court seeking to lower its $170 million property assessment on unsold condominiums it was taxed for in 2004.
New York City-based Millennium Partners still holds about 40 percent of the project’s 269 condo units, and at the time of the 2004 tax cycle it owned about 67 percent of the units. It completed the 70-story condo-hotel tower at 1425 Brickell Ave. in 2003.
….
Millennium has had a hard time selling units at the ultra-luxury tower. If it sold the units it would not be liable for the taxes. And the cooling Miami-area condo market is not helping.
By suing, the developer is trying to reduce its cost to hold on to the units as market uncertainties further complicate efforts to sell the condos.
So, a developer finishes a condominium in 2003 and still hasn’t sold his product. This doesn’t bode well for the 10,000 plus condominiums currently under construction in Miami.
That’s huge– 3 years and still 40% builder-held, and it’s the Four Seasons no less.
Maybe OT:
Went to Miami/Ft. Lauderdale last weekend, and it sure does look like a disaster waiting to happen. High rises being built everywhere, with condos running @$700K+. Checked out several condos for rent, and almost all owners (of rehabbed/brand new condos) seemed very desperate to rent. A realtor showing several condos to us indicated that the owners were “very motivated”, if I thought the rent was too high. The area (Miami Beach/Sunny Isles Beach, etc.) is so crowed already. If all the buildings actually have inhabitants some day, it will be impossible to walk around in the area, let alone drive.
One realtor (mid-20s female) told us that the best thing to do is to buy rather than rent, ’cause you will get appreciation out of it. She herself has 4 properties, rehabbed and 3 of them rented. She said that she has helped several people (including herself) flip several condos. She used the word “flip” several times and seemed to use the word “flip” and “investment” as synonyms. I honestly don’t think she was trying to “con” us; she truly believes that what’s going on in that area is “investing”.
BTW, I was in the area for vacation and thought I’d check out the RE market first hand and file this report on Ben’s blog.
Liars are only effective when they believe the lie and disregard the cognitive dissonance.
Nothing wrong with it but it is genetic for homo sapiens sapiens
Millennium Partners likes doing things in style. they built those luxury condos on the Whitehurst Freeway in G’town that were 500k - 2m w/ 6k condo fee that got you 4 Seasons room service, i think they sold 3 in 2 years. probably sold a few more since then w/ the DC bubble and a DC councilman’s wife as RE agent. they have a huge project going up in San Fran too, man the bank doing the financing is prime for a reality check.
The 10-year Treasury Note today - check it out.
Wouldn’t it be sweet if rates rose just as the illustrious Spring market was trying to rise from the ashes.
http://finance.yahoo.com/q/bc?s=%5ETNX&t=5d
The 10-year has been under a little pressure. Here’s some TA showing the bond has been basing for some time and looks ready to crack. Much higher rates could be in the cards in the very near future:
http://financialsense.com/Market/wrapup.htm
“The 10-year note referenced above is now at a key inflection point whereby continuance of the short term up trend in rates will alert the crowd to the conspiracy of paper. The resistance on the 10-year note rate has not been broken yet; but it appears that it is now in a position where resistance can be broken. In the spring of ’04, the resistance was broken, but this was done after little basing and the resistance level of 4.65% was then quickly reclaimed. But, I submit that this time it is different. The next few trading days and weeks will be critical for the bond market. If the bond market breaks, this will be the beginning of the end for the conspiracy of paper.”
I’m not saying this is wrong, but we must take into account that those guys are just as biased as any Realtor. In their case the bias is towards precious metals and against any current currency system.
Strolling in the Miami towers would be fun. I am sure that will play out in many condo happy cities. All of the rich babyboomers will want to live there (NOT). Oh, I forgot, most of them forgot to save money, and will still be working as greeters at your local Walmart.
A 5-7 year RE boom—the biggest in U.S. history—isn’t corrected via a 1-2 month cooldown/slowdown. Dumbasses.
This 5-7 years boom will be followed by 2-3 years of steep decline then 2-3 years of moderate decline and then 2-3 years of stagnation.
When the dust settles, RE values in some of the most inflated regions in the country (California, Florida) will probably plunge about 50%.
the Netherlands had a 5-year boom in the seventies with about 100% homeprice appreciation. This ended with a -40% crash within 1.5 years (including inflation this wiped out all the gains) and after that prices went nowhere for at least 10 years (the correction usually goes below fair value).
Our current boom has lasted already 15 years and has 500-1000% appreciation, so when the market finally turns the RE market will probably be bad for at least one generation …
I remember those articles, crazy.
Hello all, I’m from the Virginia Beach area. I’ve been a lifelong resident. It’s still pretty crazy here. Housing tracker shows 100% inventory increase over the past 6 months. It was 98%ish over the past 3 months until the current month hit.
There seems to be a large number of forsales, but you have to remember the median income in this region isn’t high. It’s a transient region with alot of Military. We make it into a good number of rap songs, and not in a good way. There is gang issues, and we truely are a melting pot. They call it Hampton Roads, I like to call it Homicide roads as a joke…
I for one am waiting on the sidelines. I refuse to pay someone 40% extra over 2 years of nothing. I’m doing fairly well, but don’t want to have all of my money going into a house. The job market here for tech professionals is very heavy on the gov’t contractor side. If there are cutbacks in gov’t spending, it will hit this region.
I know young people who are working what would be considered good jobs, with degrees, who have purchased simple starter condos that seem to be struggling.
My apartment rental company is upping my rents, and upon looking at what is availbile, it almost appears as if rents have declined! Perhaps it’s the time of year, but I’m leaving the place as it appears I can go almost anywhere and find something cheaper.
Actually, I don’t want to take credit for it… but the pilot had a public guest book the other day and I posted on it (as usual) bashing the run up in prices. I questioned why the pilot never mentions the current high inventory levels… I wonder!? Perhaps it is possible to effect change?
The pilot article reads like the Realty Times local market reports. “Sell your house now before it’s too late! It’s never been a better time to buy!”
I really cannot believe that Va Beach condo prices are still going up! Like you say, the local population on average is not exactly swimming in wealth. All I can think is that DC area speculators got involved. Prices at the other end of the area (Newport News, Williamsburg) do seem to have peaked.