The Virginian-Pilot
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Home prices in South Hampton Roads held firm last month even as sales of existing homes fell sharply .
Virginia Beach-based Real Estate Information Network Inc. released data Wednesday that showed the median sale price for existing homes in November was $214,700 , down just 0.1 percent from October and 2.4 percent from $219,950 a year ago. The median is the point at which half the prices are higher and half are lower. Median prices had declined slowly but steadily in Hampton Roads in recent months.
But November may have been just a brief respite from falling homes prices as the inventory of homes for sale remains high.
“You’re going to have to see more depreciation to get those homes off the market,” said Ron Pearman, regional vice president of Long & Foster Real Estate in Virginia Beach.
The local multiple listing service also reported that 624 existing homes and condominiums were sold last month in South Hampton Roads. That’s down 28 percent from October’s sales figure of 863 and 25 percent from the 830 home sales that closed in November 2007.
Pearman said he had expected sales activity to increase last month as interest rates continued to fall. In October, the number of home sale closings blipped up after months of slowing activity.
Barbara Wolcott, president of Prudential Decker Realty in Chesapeake , said the flagging economy is hurting the confidence of potential homebuyers.
“It’s not lack of confidence in real estate,” she said. “Everybody is cutting. People are worried if they buy a home today, will they have a job tomorrow?”
Meanwhile, foreclosure activity in Hampton Roads eased last month as lenders across the country adopted a moratorium on foreclosures during the holidays imposed by Fannie Mae and Freddie Mac, according to data to be released today by RealtyTrac, an online foreclosure-monitoring service based in Irvine, Calif.
The number of foreclosure-related notices in Hampton Roads was 1,083 in November, down 20 percent from October. Still such notices are nearly 2½ times as high as year-ago levels.
RealtyTrac monitors the number of bank repossessions, auctions of foreclosed homes and notices of default, which mark the beginning of the foreclosure process.
While the local foreclosure data aren’t as stark as in some parts of the country hit hard by subprime lending, the RealtyTrac data suggest foreclosure activity is growing faster here than nationally. Last month, activity across the country rose just 28 percent compared with a year ago.
“I do not think we’re anywhere near the bottom yet in foreclosures,” said James Koch, an economist at Old Dominion University. “I still expect a doubling or tripling of the volume locally.”
In November, one out of every 625 homes in Hampton Roads was in some state of foreclosure.
And as homeowners look to government regulators to help them renegotiate their troubled mortgages, a report released this week by the federal Office of the Comptroller of the Currency pointed to another disturbing trend: More than half of the loans modified in the first quarter of 2008 fell delinquent within six months.
“Even when their interest rate went down, they still couldn’t meet the payments because maybe they lost their jobs,” Koch said. “It’s discouraging because that’s the major thing that everyone is saying we should do, but it doesn’t look like it’s going to work.”
Pearman said the sluggish sales activity last month can be attributed in part to more stringent lending requirements by mortgage lenders. He expects sales activity in December to be down further.
“It’s historically our worst month of the year,” he said. “But I think we’ll see an uptick in the first quarter of next year.”
When homes prices are unstable, Koch said, it causes buyers to hesitate, which could be further depressing sales.
“So what we have is what economists call destabilizing price expectations. It’s like waiting for Christmas sales,” he said. “When prices are rising, people try to buy quickly.”
The Real Estate Information Network’s data also showed the number of homes on the market last month in Hampton Roads declined 1.8 percent from October to 14,230. That figure includes the Peninsula and outlying regions such as Williamsburg and northeastern North Carolina.
The number of active listings has steadily declined in recent months, a common occurrence during fall and winter months as sales activity slows and sellers pull their properties off the market during the holidays.
People also may be pulling their homes off the market after months of waning interest, Koch said.
“This is sort of like the discouraged worker effect, when unemployment levels go down, when people can’t find work and they give up,” he said. “I suspect some people can’t sell their homes, so they are giving up.”
Even so, the number of homes on the market is at one of its highest points on record, resulting in houses remaining on the market longer. The average time on the market for existing homes in all of Hampton Roads was 96 days in November, compared with 74 days at the same point last year.
“The Hampton Roads area was very fortunate,” Wolcott said. “When things were dropping in other parts of the country, we remained stable longer. A lot of what you’re seeing right now is more or less catch-up.”
Josh Brown, (757) 446-2318, josh.brown@pilotonline.com
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cheaper homes
broadnax circle 23323 on zillow is close to what you need. It's a foreclosure at @189k. Grassfield seems well liked by the parents I talk to.
Ethan
Remember, this area is only unaffordable to the younger generation having to pay 250k for a 900sqft house here on largely joke jobs. More established people that got in a decade or more ago are doing just fine, and from what I can tell, are most of the people trying to sell, and they have no real motivation for leaving the area outside of huge capital gains.
Yeah some people are trying to "get what they owe" and get wrapped up in it, but I blame them for buying high. The problem is, they refuse to take a loss. Theyd rather just get foreclosed on, then sell it for drastic reductions. Ill tell you what, if someone wants to sell me a 3-4 bedroom detached house in a decent Virginia Beach neighborhood for under 150k that doesnt need to be rebuilt, Id be more then interested. Problem is, nobody is going to sell to me. Theyd rather just send in the jingle mail and wash their hands.
Why fed money?
If this area isn't in any mortgage crisis at all, as many posters state, why were we approved for federal relief money?
You seem like an
You seem like an intellectually curious person Ethan. In this case your writings are rife with inaccurate perceptions. Many are contradictory. Your simply young and inexperienced. Many of us have seen downturns in real estate cycles. Some will be worse than others. This one may be the worst in my life time. We will see. I can promise you though that a person who buys a home right now will end up ahead of those who rent. The combination of lower prices and low rates are great. If the economy continues to trend down banks will have a harder time lending regardless of goverment help. This will render the lower price of homes moot. Your example was Ghent Square. I should point out there is no upkeep except the interior there.
coolguy81 - you forgot that
coolguy81 - you forgot that lots of Navy people come to the area, buy huge homes, then are given orders to leave. There was a desperate couple offering to give everything in the house away with a sale price of what they owed ($630,000) for a house in Greenbriar. That listing repeated on craigslist for a few months.
Also, when comps go down new people that bought and paid more are more likely to walk away. The whole psyche is you buy a house, it appreciates rapidly, you get rich. When that doesn't work out, some people aren't going to want the house. Much of the bubble was fed on the bubble. Look at all of the "owner / agents" on craigslist trying to sell homes. Realtor, not making sales, no income, their own investment properties fall behind. Blam, more foreclosures. There is quite a bit of REO on the market, all overpriced.
And in the end, Hampton Roads really doesn't have much going for it. Most of the good employment is gov't. Cheap cost of living and water were the things going for it. Cheap cost of living is gone, and there are many other coastal areas with more going for them. I think lots of people are leaving.
joncmac - the bailouts
joncmac - the bailouts hopefully won't re-ignite careless lending / mania times. If you look at recent stats, something like 50% of the loans that have been reworked for affordability in the past few months are already behind again.
richardm - It's not my formula, it's the formula investors use to see if a house is priced right or not compared to rents. You're going for the investment angle, which a primary home is not. It's shelter. And has a holding cost. Owning should be cheaper than renting since as an owner you're responsible for upkeep. Recently people look at homes as investment, as their complete retirement, which is bad.
As a country we need to be productive, make good things, improve the world. Reselling cheaply constructed boxes to each other at ever increasing debt levels is not the path to a good future for our country.
Ring
Everything will sell at a certain price. Why arent those people dropping their houses even more then 60k below assessment? Why not 75 or 100k? Its because getting out of the area isnt worth enough to them to accept that "bath". Hampton Roads isnt Detroit, or East St. Louis, there is low unemployment and relatively low crime for the city size. Hampton Roads does not have the underlying factors that make people NEED to leave the area, and take huge cuts on appraisal. Ive have seen many a house sit on the market for 6 months plus without seeing so much as a 10% reduction in price from original asking. People are content with sitting in their house until they get what they want here, bottom line. That is going to prevent the prices from ever getting back to affordable for the prevailing incomes. Ill tell you what, Im finished holding my breath for a house under 150k that doesnt basically need to be rebuilt. Ive resigned to moving as soon as I can.
Wrong Ethan, sorry
"$1100? 120 months of $1100 is $132,000. But when they sold the apartments as condos they wanted $225K or more."
The first fallacy is the rent will be higher over the ten year span you used. I used to hang out at the pool when rent was $500 there. Second, the renter has gained nothing while the buyer is likely to sell with appreciation/equity and have paid nothing to very little. In your profit figure you failed to calculate it would be more profitable not to sell them as condos but to keep renting them. I personally think 225K is high for Ghent Square but the location cannot be beaten.
prices are falling
Where I live in P-town. House on the corner sold recently for 189 and was assessed for 254. Three other houses are on the market being advertised as selling 40 to 60k below assessed value and they aren't selling. I think the cities get together with the Pilot to make up these articles to give the city assessors an excuse to keep their over inflated assessments.
Close to bottom with the aid out there
I really think we are close to the bottom in Virginia, when you consider all the aid, from Citigroup and others. In addition to Citi, Fannie Mae, The federal gov't FHA, many states, JPMorgan Chase, Wachovia, and Bank of America/Countrywide have committed to helping over 2 million homeowners between them keep their homes. I found more info on the programs here.
I think it is up to all of us, the government, companies, you as a neighbor, everyone to get the word out. A stable market will benefit everyone, and help the economy.
http://www.needhelppayingbills.com/html/help_with_mortgage.html