Hampton Roads' cost of living 6.8% above national average

Think stuff around here is cheaper than in most regions in the country? Think again.

In the latest bit of economic gloom, the Hampton Roads Economic Development Alliance reported Monday that the cost of living in the region is actually 6.8 percent above the national average.

The alliance tallied an assortment of expenses, including a box of cereal, a bowling outing and a dental visit, for a national survey conducted by the Council for Community and Economic Research, a private organization based in Arlington.

Among six categories, housing showed the biggest gap between local areas and the country. For the region, defined to include Norfolk, Virginia Beach, Newport News and northeastern North Carolina, housing costs last year were 26.4 percent above the national average.

Local utility costs were 5.9 percent above the national average, transportation 3.4 percent and groceries 0.9 percent.

Local areas were less expensive in terms of health care and miscellaneous goods and services - 98.5 percent and 95.6 percent of the national average, respectively.

Old Dominion University's State of the Region report has not updated its cost-of-living estimates since 2005, when the region ranked slightly below the U.S. average, economist Vinod Agarwal said.

Nevertheless, Agarwal said he isn't surprised by the new ranking. "The major culprit here has to be the housing prices," Agarwal said. Excluding new construction, the median price of a house nearly doubled locally in the past five years, from $116,900 in 2002 to $223,000 last year, he said. The median is the point where half the houses cost more and half cost less.

To make matters worse, both Agarwal and Greg Grootendorst, deputy executive director for economics for the Hampton Roads Planning District Commission, noted that wages locally are below the national average.

In 2006, the U.S. Bureau of Labor Statistics reported that the regional per-capita income was $34,595, compared with $36,307 for the United States.

The local cost of living was less than the national average in the Council for Community and Economic Research reports until 2005, Grootendorst said.

"We had been preaching right up until 2005 how our incomes were less than the national average, but that was OK, because so was the cost of living," he said. "Now incomes remain below average and the cost of living is above the national average. Yet we do maintain a good quality of life."

Grootendorst noted that the survey did not cover the entire nation, only selected regions.

Agarwal said he expected that housing-price increases would slow this year. And he wouldn't be surprised if the region fell back below the overall national average in the next few years.

Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com