Virginia Beach ranks near the top in 100 locales / home price declines. (Hampton: for sale, real estate)

[telemonster]

Real Estate 2009 rank list - Money Magazine on CNNMoney.com

Money magazine’s forecasts for the biggest home price declines by locale.

Virginia Beach is close to the top! We're 13th! We rank close to New York City, LA and others. Great news! The quicker home prices get back in line with salaries, we can move past the housing mania and hopefully get back to doing productive things. Get it out of peoples systems that they are going to get rich off of reselling pressboard boxes at ever escalating debt loads. Get it in their minds that they will have to do something productive. Maybe we will move up the list next year.

[Trevor92]

This is actually a very, very bad thing for the area. Sure, home prices have declined which is good for future buyers, but the flip side is mortgage companies won't approve mortgages in this area which will soon cause rent to rise, people here can't refinance into very low rates now available, builders can't build and become unemployed, many people owe more than their house is worth which can ruin lives by eliminating home equity lines of credit or the ability to pick up and move with the freedom to make the down payment on their next home.

Yes, home prices are declining, but there's no reason to celebrate with as many people going through very stressful, tough times because of that fact after making many sacrifices to own a home.

I would also expect the home value decline not to last long though. With the government spending taking place, it's only a matter of time before the dollar is devalued and prices go up for everything from new homes to groceries. What this area really needs is higher paying jobs.

However, in Virginia Beach from what I've read, the stats are largely skewed due to the declining value of very large, very expensive homes that just aren't selling.

[danno1991]

I don't understand why home prices coming down is seen as a bad thing. Remember it's not home "values" coming down. It's home "prices" coming down. The "value" was never really there to begin with. It was all on "paper" run up by easy money given to people who never should have been given the money to begin with. I don't see anybody complaining about the return of gas prices to more realistic levels. Same differnece.

[rtandc]

Hampton Roads, VA

Rank: 13
Home price forecast: -14.9%
(one year, forecast through March 2010)
City stats Population:
(2006)1,649,455
Median family income:
(2008)$65,100
Median home price:
(2008)$242,000
Affordability index:
(2008 median home price/family income)3.7
Prices peaked in:2007:Q4
Total climb during the boom:
(2000 to peak)123.7%
Total decline so far:
(Peak through 2008)-7.0%
One-year change:
(Q4 2007 to Q4 2008)-7.0%
Forecast Price change :
(from peak to bottom)-26.8%
When they'll hit bottom:
2011:Q1
At bottom, prices will drop to levels last seen in:2004:Q4

Believe it or not....................

[Randomdude]

I keep seeing all these articles about prices dropping so much here.....why am I not seeing them reflected in reality? Are all these price drops at the high end? The houses that were selling right around 200k a year ago, are still being offered at 200k from what I can tell.

[telemonster]

Originally Posted by Trevor92

This is actually a very, very bad thing for the will soon cause rent to rise / builders can't build and become unemployed / can ruin lives by eliminating home equity lines of credit or the ability to pick up and move with the freedom to make the down payment on their next home /
it's only a matter of time before the dollar is devalued and prices go up for everything from new homes to groceries. What this area really needs is higher paying jobs. /

A: Why would rents rise? Rents reflect the true ability of the renter to pay. It's based on real salary. Home prices were based on debt, fraud, and teaser rate loans. Rents have to reflect the earnings of the people, "home ownership" had decoupled grossly from this. As it comes back in line, it forces home prices to fall. If you can't put down a 10%+ down payment on a place, you should not be buying it.

B: Builders saw their sales early. They sold lots of properties for lots of money. Hopefully they saved for a rainy day. There is 18,000,000 empty homes in the US, of which over 5,000,000 are available. That's a lot of inventory. They had their fun. It's not my problem. If I had windfall profits I'd be sitting good. It's not my problem if they drank their own kool aid and bought huge McMansions, jet skis, fancy cars or huge trucks, boobs and whatever else and things turned south. The media was pumping real estate to no end. Them and those involved in real estate made tons of money that they shouldn't really have gotten as financials of the country were not sound. They should consider themselves lucky, we're all paying for it now.

C: Home equity lines of credit shouldn't be used for vacations and car purchases. Short lived purchases financed with long term debt is bad. Borrowing against a home once in a while for medical emergencies, or perhaps some home improvements is cool. Using it as an ATM machine to live above one's means is bad.

D: picking up and moving is a good point. Housing is very illiquid. Only the past few years was it easy to move a house real quick, and that was because it was a mania and everyone thought they would get rich. There are high transaction costs (especially if you use a realtor). People had the idea they could buy a house, live in it two years, sell it and pocket $40K in profit for being some sort of genius. The fact everyone thought this way and competed to buy the limited inventory with borrowed money is how we got here. This isn't possible in a healthy market.

E: Dollar devalues when more money is created. The gov't printing money looks bad in the news, but it's not keeping up with the money that is being destroyed (so many loans going bad). So this is a fallacy.

F: High paying jobs would be good. But conventionally the area is marketed for it's low paid, but quality workers. People come here for cheap labor. The area doesn't have a good mindset for being really progressive.

[telemonster]

Originally Posted by Randomdude

I keep seeing all these articles about prices dropping so much here.....why am I not seeing them reflected in reality? Are all these price drops at the high end? The houses that were selling right around 200k a year ago, are still being offered at 200k from what I can tell.

The fact it's still for sale a year later goes to show it's not priced properly. It's called a "wishing price." They wish they could sell it for that.

[Randomdude]

Originally Posted by telemonster

The fact it's still for sale a year later goes to show it's not priced properly. It's called a "wishing price." They wish they could sell it for that.

I dont mean the "exact" houses, I mean, prevailing prices. In my neighborhood, the asking price for a 3 bedroom 1 bathroom house of about 900-1000sqft was about 85k in 2002. In 2007, the sale prices of those houses were about 200k. In late 2008, those houses were still about 200k.

In the neighborhood behind mine, housing hasnt changed much from 2006. Townhouses range from about 150k-200k.

I have noticed that houses seem to be on the market a very long time, but they arent dropping their prices, theyre only changing realtors 22 different times.

[rtandc]

Originally Posted by Randomdude

I dont mean the "exact" houses, I mean, prevailing prices. In my neighborhood, the asking price for a 3 bedroom 1 bathroom house of about 900-1000sqft was about 85k in 2002. In 2007, the sale prices of those houses were about 200k. In late 2008, those houses were still about 200k.

In the neighborhood behind mine, housing hasnt changed much from 2006. Townhouses range from about 150k-200k.

I have noticed that houses seem to be on the market a very long time, but they arent dropping their prices, theyre only changing realtors 22 different times.

Because you have two types of sellers and two types of buyers

You have the sellers that have to sell, either because of a job transfer or maybe job loss etc but either way they have to sell their property.....Many of these people understand the market and price point their homes to sell.

Then you have sellers that dont have to sell but would like to..either to up size or down size from their current home. These are the dreamers that still price point their homes way above todays going rate and their homes have been for sale for months and months taking up space in the local market....

Now you also have two types of buyers

You have the type that are moving into this area without a place to stay and dont want to rent or they have a deadline because they have sold their home etc, these are the ones that tend to over pay for houses. These are the types of buyers that the dream sellers are looking for and they find a sucker every now and then.

The other type of buyers are the ones that are educated and know what todays market is really like, they are the ones that will play the game until they find a house that is priced right......

Right now there are more educated buyers then there are sellers or more dream sellers then there are dream buyers..how ever you want to look at it....that is why you have 13000 plus homes sitting on the local market ....but like everything else this will change..

Will the local market hit bottom in the first quarter of 2011 or will the local market see a 27% drop as this article state......who knows but its going to be interesting to watch

[telemonster]

Originally Posted by Randomdude

I dont mean the "exact" houses, I mean, prevailing prices. In my neighborhood, the asking price for a 3 bedroom 1 bathroom house of about 900-1000sqft was about 85k in 2002. In 2007, the sale prices of those houses were about 200k. In late 2008, those houses were still about 200k.

That is probably the point where people can buy. Perhaps young people, unaware as to what the true value is jump in. They ignore the fact that the current person purchased the townhome for 85K 3 years ago. They overlook the fact that the older folks got to enjoy 15 year loans, instead of the now standard 30.

They ignore what they are really getting for the money. Dilapidated structures that would cost $60K to build being sold for $200K.

People get all emotional over houses. The National Assocation of Realtors spent over $40 million dollars in a quick advertisement campaign trying to respike the housing mania punch bowl. There is heavy marketing, and heavy lobbying (one of the most powerful lobbyist groups).

In our country, it's viewed that you "made it" if you own a house. You are perceived to be successful. Meanwhile, renters are considered losers. I actually get marketing materials in the mail from local Realtors citing that the average renter's net worth is $4K, and homeowner's is $180K. I couldn't find any data to back this up. Is the average renters insurance policy $4K? Is the average renter's vehicle valued at more than $4K? Of course the Realtors aren't very smart, but either are the people that look to the Realtors as some sort of financial adviser. The term Realtor is a made up term, a trademarked name. It obscures the true job title, which is "new or used house salesperson."

And of course the human emotions of jealousy. People "keeping up with the joneses."

Just the term "Landlord" is funny in itself. But the truth is, you don't really know who has what. So many homeowners are living paycheck to paycheck. The mania allowed people to buy with 0% down. Heck, there were loans that were 103% CLTV!! The bank gave the borrower money to take the house.

Look at the absolute garbage shows on HGTV and what not. Property Ladder, House Virgins, etc. They have to be getting some sort of kickback.

This.... sums it up totally, and is a real commercial from Century 21:

YouTube - Suzanne Researched This Commercial