Confused about cost of living in Hampton Roads (Norfolk, Washington: lease, vacation home)

[GoPhils]

I think he is describing it as a hybrid because it has a larger area than those other places, which may make the population somewhat misleading. Virginia Beach has a land area of 248.3 square miles, much larger than that of places like Miami (35.7 square miles), Oakland (56.1 square miles), and Atlanta (131.7 square miles). At first glance, the populations of VA Beach and these places seem similar, but the population of Virginia Beach is more spread out than these places. As a result, if you look at the population in the same land area of these other places (maybe not the entire county, but more than just the actual city), than they're populations are actually much larger than VA beach.

It's kinda like Jacksonville, FL but not really to that extreme. Officially, Jacksonville is the 3rd-largest city on the east coast after NYC and Philly. But that's really only because it's the largest city in land area in the country.

Edit: You were the one trying to take loopholes around all of the other numbers I posted, yet when looking at populations of cities, this all of the sudden becomes the only number that matters, regardless of the physical size of the city?

[Randomdude]

Originally Posted by GoPhils

Edit: You were the one trying to take loopholes around all of the other numbers I posted, yet when looking at populations of cities, this all of the sudden becomes the only number that matters, regardless of the physical size of the city?

The physical size of the city is worthless. If anything, that should be a plus to Virginia Beach, since it has more space to build. The population is all that matters, I dont care if they are stuffed in a cardboard box, or spread out over 1000 square miles. Its the exact same tax basis for the city proper.

Now, if you want to make the argument that county dollars are disproportionatley being spent in the large cities, that is a separate argument, one of which you are going to need a tremendous amount of better data to prove.

[telemonster]

Here is an article that was posted on the housing bubble blog today:

http://www.nytimes.com/2009/04/22/bu...t.html?_r=1&em

It mentions an auction in DC where a town house in Virginia Beach that sold for $189K a year ago was sold for $115K.

This is not encouragement to go buy now, it's me showing you what is going on.

The point of the article is that prices will continue to decline.

[rtandc]

Originally Posted by telemonster

Here is an article that was posted on the housing bubble blog today:

http://www.nytimes.com/2009/04/22/bu...t.html?_r=1&em

It mentions an auction in DC where a town house in Virginia Beach that sold for $189K a year ago was sold for $115K.

This is not encouragement to go buy now, it's me showing you what is going on.

The point of the article is that prices will continue to decline.

Ok but look at yesterdays local paper where it showed that the median sale prices for homes rose 7 percent last month from the month before...so everything is still on a month to month cycle right now.....

[sassyfragger1]

Originally Posted by rtandc

Ok but look at yesterdays local paper where it showed that the median sale prices for homes rose 7 percent last month from the month before...so everything is still on a month to month cycle right now.....

That means nothing other than people are spending more $ on average- not that houses are worth more. It makes sense bc people who would normally buy the less expensive houses are now having trouble getting a mortgage

[GoPhils]

Originally Posted by telemonster

Here is an article that was posted on the housing bubble blog today:

http://www.nytimes.com/2009/04/22/bu...t.html?_r=1&em

It mentions an auction in DC where a town house in Virginia Beach that sold for $189K a year ago was sold for $115K.

This is not encouragement to go buy now, it's me showing you what is going on.

The point of the article is that prices will continue to decline.

Yes they will, everywhere. Not just Hampton Roads.

[rtandc]

Originally Posted by telemonster

Here is an article that was posted on the housing bubble blog today:

http://www.nytimes.com/2009/04/22/bu...t.html?_r=1&em

It mentions an auction in DC where a town house in Virginia Beach that sold for $189K a year ago was sold for $115K.

This is not encouragement to go buy now, it's me showing you what is going on.

The point of the article is that prices will continue to decline.

Real estate auctions normally are a joke....I dont know how many you have attended but I have been part of many over the years......Dont get all excited because it shows a town home being sold for 60K less then what it sold for a year ago....We have no info about that property....Did it sell because of high inventory around it or did it sell that cheap because it was trashed by the last owner....you also have to look at what type of tax and/or mechanic liens that are on the property...the new owner gets stuck with paying them also...Dont forget the fees you have to pay the auction company also...normally 7% to 10% on top of the sale price unless you are a preferred buyer where a flat fee is agreed upon.......so that 60K in savings could get a big chunk of it taken out pretty quick.....

I was at an auction in Chesapeake 2-3 weeks ago where 3 brand new higher end properties were on auction...I was very surprised because it was an absolute auction so I had to attend thinking maybe a good deal would come from it...most are either minimum bid or reserve auctions when dealing with high end property....I had to just shake my head because all 3 properties went very close to city tax assessment and 1 went higher then it was listed for on MLS just last Dec.......So I guess you can say there are plenty of fools still out there buying homes

[telemonster]

Fools / shill bidders.

I wouldn't bother with a reserve price auction ever.

I know the public auctions are generally a joke. Bidding against the wall, shills, etc.

[GoPhils]

So I wrote a short paper on the housing bubble for one of my classes, and I came across an article in the Financial Analysts Journal that would be relevant here. Since you were complaining that the only place I said had a higher cost of living than Hampton Roads was New Jersey, I figured I would let you know that there are several places that are worse. The authors of the article talked about pretty much exactly the same thing we were: the ratio of median housing price to average income per capita. As of the middle of 2008, the average ratio for the entire U.S. was 4.93 (down from its peak of 5.33 at the end of 2006), basically meaning that houses cost 5x as much as what the average person makes. While Virginia was above this average at 5.83 (and 6.34 in 2006), there were many states that were worse (and I'm only listing states where both numbers were higher...there were several where one or the other was higher):

New York: 5.86 in 2008, 6.37 in 2006
Delaware: 6.11 in 2008, 6.49 in 2006
Massachusetts: 6.24 in 2008, 7.09 in 2006
Nevada: 6.35 in 2008, 7.63 in 2006
D.C.: 6.57 in 2008, 7.32 in 2006
Maryland: 6.57 in 2008, 7.36 in 2006
Rhode Island: 6.63 in 2008, 7.72 in 2006
New Jersey: 6.67 in 2008, 7.50 in 2008
Arizona: 7.00 in 2008, 7.94 in 2006
Washington state: 7.42 in 2008, 7.78 in 2006
Oregon: 7.67 in 2008, 7.98 in 2006
Utah: 7.75 in 2008, 7.10 in 2006
California: 9.93 in 2008, 12.96 in 2006
Hawaii: 16.30 in 2008, 17.88 in 2006

If you were counting at home, that's 14 states that have a higher cost of living when compared to incomes than Virginia. And no, not all of them are "paradises" as I think you were describing several other states with high costs of living. And no, not all of them are that close to major employment centers as you also said before. And yes, I know, Hampton Roads is only part of Virginia, but these are probably the closest numbers you're gonna get. Even so, if you consider that many people in Northern Virginia work in D.C., and D.C.'s numbers were higher than Virginia, and then also take into account the most likely lower numbers in western Virginia, then I'd think the overall numbers are pretty accurate.

On another note, you also seem to be complaining that Hampton Roads was late to join in on the decline in prices. But from the middle of 2006 to the middle of 2008, Virginia was one of only four other states to have prices already decrease by at least 15% (along with only Florida, California, Nevada and Arizona).

http://www.cfapubs.org/doi/pdf/10.2469/faj.v65.n2.2

[telemonster]

What was the ratio in 1999, before the lending standards crumbled? You mention 2006 and 2008. 2006 was peak, 2008 is still way bubbly.

Northern Virginia throws the stats off pretty hardcore. If you look at the foreclosure sites, the worst hit areas are Hampton Roads and Northern Virginia. I've seen examples of 50% off homes in Northern Virginia.

I mentioned places like Austin TX and Raleigh NC as having good (better) companies and lower cost of living.

Pheonix AZ is the first area I think where the prices on average have fallen 50% since peak. Just hit that mark the other day.

Northern Virginia/DC/MD has lots of respectable companies. Hampton Roads does not.