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The Reality of Realty in North Central West Virginia
Have you ever wondered why real estate and rental prices in North Central West Virginia (NCWV) appear higher than comparable markets? If one asks some regional realtors, private real estate sellers, or landlords the provided justification often reflects the following statement, ‘The local appraisals or rent levels are based upon our own analysis of local market factors including proximity to the Louis A. Johnson VA Medical Center, United Hospital Center (UHC), and the Federal Bureau of Investigation (FBI) facility, as well as Marcellus Shale trends, limited housing availability, and an expected population increase in the area.’ Regional real estate guides often print a summarized version of the stated justification (Homes and Land of North Central West Virginia, 2013). For example, obtain a copy of the publication and observe how many home advertisements list location proximity to the Louis A. Johnson VA Medical Center, UHC or FBI as a competitive market analysis (CMA) factor.
One might question such analysis, particularly given that it naturally lends itself to potential research bias. After all, a higher asking price potentially results in a greater profit margin. Fair enough – this is an element of a capitalist economy. However, it is problematic when third party research seemingly contradicts a CMA price justification which may be based more upon speculative investment or appraisal than market or property condition. For example, regional Zillow price estimates are frequently five to ten percent less than NCWV realty listings. This is typically a realistic variance due to routine, overall market fluctuations, and Zillow’s exclusion of extensively detailed local market trends (Zillow, 2013). But when some NCWV realty price margins differ by more than 40 to 200 percent in comparison to Zillow estimates, one must reconsider the definition of “realty reality” in the regional CMA and whether speculative assumptions - versus contemporary market conditions – underlie real estate prices.
Is the reality of NCWV market trends – in this instance actual or speculative employment and income levels driving higher property valuations – truly sufficient to support current realty prices? When asking realty purveyors, the answer is yes. But carefully consider the following issues when examining the noted real estate price variances to gauge the NCWV CMA.
Marcellus Shale
Marcellus Shale expansion continues – but where? According to recent reports, Marcellus Shale exploration and drilling certainly continue in WV but operations are increasingly moving to untapped deposits in New York, Ohio, and Pennsylvania (Miami Herald, 2013; Politics on the Hudson, 2013). Ancillary industry reports also support the observation when describing increased infrastructure development for deposits outside of WV (Progressive Railroading, 2013). If there is still question as to the relocation of Marcellus Shale personnel, simply observe the vehicles around you during your daily commute. Does one still observe fleets of white vehicles passing by at high speeds on I-79 or Route 50? Are slow-speed convoys of fracking rigs and water trucks still lumbering along secondary county roads? To some degree, yes; but at levels comparable to recent years – no. Further, if Marcellus Shale personnel are still in the area, why are rental homes and campgrounds suddenly advertising increased vacancies at reduced rates? Has there been a sudden construction or development boom of such amenities or are Marcellus Shale personnel, whom are transient by nature of employment, moving on to newer fields? The upkeep of Marcellus Shale infrastructure does not require the long term residence of large numbers of personnel. Subsequently, exorbitant prices are not justified by the supposition that the long term presence of Marcellus Shale personnel will support near future supply and demand dynamics of the NCWV real estate or rental housing markets.
Coal Industry
The coal industry may also be considered a fail-safe justification for real estate prices in the NCWV region. Historically, socio-economic trends have permitted a cyclical revival of the industry. However, modern government subsidies in renewable energies, increased mechanization by mining operations, and an exhaustion of “easy to reach” coal seams (E&E Publishing, LLC., 2013) will likely decrease the levels of mine personnel required in past operations. Further, recent EPA regulations restricting both coal mining and the operation of coal-fired power plants could further reduce the number of mining personnel and related salaries supporting the NCWV real estate market (The Daily Caller, 2013). Finally, recent public policy has favored natural gas exploration and infrastructure development over that related to the coal industry. Energy plants originally built to burn coal are increasingly converted to burn natural gas (Sourcewatch.org, 2013). Pre-existing or planned coal-fired power plants must increasingly install extraordinarily expensive clean-coal technologies that simultaneously reduce CO2 emissions as well as traditional profit margins (Reuters, 2013; The Daily Caller, 2013). Given these collective trends, the days of the traditional mining industry and associated economic infrastructures seem inarguably in peril (The Charleston Gazette, 2013).
Louis A. Johnson VA Medical Center and the UHC
The Louis A. Johnson VA Medical Center and UHC complexes are, without a doubt, impressive health care assets for the NCWV region. However, do these facilities employee a sufficient number of medical personnel to justify real estate prices in the NCWV region? Are the numbers of physicians and supporting medical personnel – as well as associated salaries – sufficient to support 40 to 200 percent variances between realty values and prices? Such staffing and income levels are doubtful, based up simple supply and demand of services required by the local population. Implications of the current public policy dynamics and the Federal budget crisis may also impact regional health care systems. In fact, some may already be experiencing the negative effects of these combined socio-economic factors (The State Journal, 2013).
Current public policy changes are increasingly restricting both public and private health care infrastructure budgets and could be an even greater factor in near future NCWV CMA. Consider the controversial effects of The Patient Protection and Affordable Care Act (Obamacare) on health care employment opportunities, recent reductions in provider reimbursements due to Medicaid revisions, and the Federal budgetary sequestration (Investor’s Business Daily, 2013). Primary national health care anchors - including The Cleveland Clinic - have been forced to reduce services and decrease health care personnel positions by the thousands (U.S. News and World Report, 2013). Physician numbers, already declining due to education costs and reduced Medicaid reimbursements, may be further reduced by Obamacare (Forbes, 2013). If a healthcare behemoth such as The Cleveland Clinic is unable to avoid such reductions, can the Louis A. Johnson VA Medical Center and UHC complexes avoid similar impacts?
FBI and Department of Defense
The current state of the Federal budget also severely impacts another hallmark NCWV realty factor – that attributed to the presence of the FBI and Department of Defense (DOD). For over three years, Federal employees have been excluded from annual cost of living increase adjustments to salaries (CNN, 2013). Furthermore, most are now under various levels of sequestration – meaning mandatory absences without pay (CNN, 2013). According to media reports, FBI employees will be furloughed under sequestration - required to take at least ten days off without pay in Fiscal Year (FY) 2014 – beginning on or near to October 1, 2013 (New York Times, 2013). From a regional perspective, these fiscal impacts are reinforced by the fact that Federal employees in the NCWV are not allocated higher locality pay adjustments (Office of Personnel Management, 2013) similar to those provided to employees in markets with comparable real estate and rental prices.
Many Federal employees are now enduring an increased salary loss due to additional furloughs (above and beyond those attributed to the budget sequestration) as part of the partial Federal government shutdown (Fox News, 2013; The Hill, 2013). The Federal budget debate remains unresolved and sequestrations, as well as the partial shutdown, could become even more protracted particularly when considering the Congressional debt-ceiling debate deadline on October 17, 2013. Congressional failure to adjust the debt ceiling could decrease U.S. credit ratings and negatively impact many financial markets (Fox New, 2013).
The Federal budget sequestration has also necessitated mass reductions in employee levels. The FBI is under a hiring freeze and must reduce thousands of previously available employment opportunities (New York Times, 2013) while the DOD must eliminate 6,000 civilian personnel employment opportunities in FY 2014 (Government Executive, 2013). These facts appear to refute regional NCWV rumors that 1,000 additional jobs will be provided locally by the FBI (Craigslist, 2013), presumably in a new building constructed at the FBI’s Clarksburg facility. According to media, the building “will house” personnel; however, the coverage does not indicate that the latter will be newly hired employees (The Exponent Telegram, 2013). This coverage seemingly reflects the aforementioned FBI hiring freeze as well as a potentially limited DOD presence due to civilian personnel reductions under current sequestration orders. As for reports of the potential FBI HQ relocation to the Clarksburg area, media reports also indicate that the new FBI HQ will likely be placed within close proximity to the Washington, D.C. Beltway (The Exponent Telegram, 2013). In light of these facts, can a buyer or seller reasonably believe that the overall presence of Federal employees justifies a CMA commanding extraordinarily high real estate prices in the NCWV region?
The Bottom Line
So, what does it all mean? What is the reality of realty in NCWV? Will the NCWV region continue to enjoy a real estate bubble that failed to simultaneously burst in concert with much of the U.S. market or has the inevitable finally arrived for a micro-economy that can no longer rest upon short-term energy trends or public policies increasingly unsupportive of the status quo? Should home buyers believe the self-generated CMA of some realty purveyors or instead consider a variety of independent sources that seem to contradict such research? Should home sellers risk an investment loss or foreclosure in the event regional real estate prices and underlying drivers decline given the current U.S. budget crisis or should they reduce prices to at least guarantee some profit from their sale? Can some landlords continue to charge extraordinarily disproportionate rental rates considering that the latter often rival or exceed mortgage payments on comparable homes or should they too consider a revised CMA? Finally and most importantly, are regional employees earning salaries commensurate to NCWV realty purchases that lead to long term residential commitment, a stronger tax base, and further economic development for the NCWV region?
The decision to accurately interpret the reality of realty in NCWV is solely that of the reader.
The Reality of Realty in North Central West Virginia
Have you ever wondered why real estate and rental prices in North Central West Virginia (NCWV) appear higher than comparable markets? If one asks some regional realtors, private real estate sellers, or landlords the provided justification often reflects the following statement, ‘The local appraisals or rent levels are based upon our own analysis of local market factors including proximity to the Louis A. Johnson VA Medical Center, United Hospital Center (UHC), and the Federal Bureau of Investigation (FBI) facility, as well as Marcellus Shale trends, limited housing availability, and an expected population increase in the area.’ Regional real estate guides often print a summarized version of the stated justification (Homes and Land of North Central West Virginia, 2013). For example, obtain a copy of the publication and observe how many home advertisements list location proximity to the Louis A. Johnson VA Medical Center, UHC or FBI as a competitive market analysis (CMA) factor.
One might question such analysis, particularly given that it naturally lends itself to potential research bias. After all, a higher asking price potentially results in a greater profit margin. Fair enough – this is an element of a capitalist economy. However, it is problematic when third party research seemingly contradicts a CMA price justification which may be based more upon speculative investment or appraisal than market or property condition. For example, regional Zillow price estimates are frequently five to ten percent less than NCWV realty listings. This is typically a realistic variance due to routine, overall market fluctuations, and Zillow’s exclusion of extensively detailed local market trends (Zillow, 2013). But when some NCWV realty price margins differ by more than 40 to 200 percent in comparison to Zillow estimates, one must reconsider the definition of “realty reality” in the regional CMA and whether speculative assumptions - versus contemporary market conditions – underlie real estate prices.
Is the reality of NCWV market trends – in this instance actual or speculative employment and income levels driving higher property valuations – truly sufficient to support current realty prices? When asking realty purveyors, the answer is yes. But carefully consider the following issues when examining the noted real estate price variances to gauge the NCWV CMA.
Marcellus Shale
Marcellus Shale expansion continues – but where? According to recent reports, Marcellus Shale exploration and drilling certainly continue in WV but operations are increasingly moving to untapped deposits in New York, Ohio, and Pennsylvania (Miami Herald, 2013; Politics on the Hudson, 2013). Ancillary industry reports also support the observation when describing increased infrastructure development for deposits outside of WV (Progressive Railroading, 2013). If there is still question as to the relocation of Marcellus Shale personnel, simply observe the vehicles around you during your daily commute. Does one still observe fleets of white vehicles passing by at high speeds on I-79 or Route 50? Are slow-speed convoys of fracking rigs and water trucks still lumbering along secondary county roads? To some degree, yes; but at levels comparable to recent years – no. Further, if Marcellus Shale personnel are still in the area, why are rental homes and campgrounds suddenly advertising increased vacancies at reduced rates? Has there been a sudden construction or development boom of such amenities or are Marcellus Shale personnel, whom are transient by nature of employment, moving on to newer fields? The upkeep of Marcellus Shale infrastructure does not require the long term residence of large numbers of personnel. Subsequently, exorbitant prices are not justified by the supposition that the long term presence of Marcellus Shale personnel will support near future supply and demand dynamics of the NCWV real estate or rental housing markets.
Coal Industry
The coal industry may also be considered a fail-safe justification for real estate prices in the NCWV region. Historically, socio-economic trends have permitted a cyclical revival of the industry. However, modern government subsidies in renewable energies, increased mechanization by mining operations, and an exhaustion of “easy to reach” coal seams (E&E Publishing, LLC., 2013) will likely decrease the levels of mine personnel required in past operations. Further, recent EPA regulations restricting both coal mining and the operation of coal-fired power plants could further reduce the number of mining personnel and related salaries supporting the NCWV real estate market (The Daily Caller, 2013). Finally, recent public policy has favored natural gas exploration and infrastructure development over that related to the coal industry. Energy plants originally built to burn coal are increasingly converted to burn natural gas (Sourcewatch.org, 2013). Pre-existing or planned coal-fired power plants must increasingly install extraordinarily expensive clean-coal technologies that simultaneously reduce CO2 emissions as well as traditional profit margins (Reuters, 2013; The Daily Caller, 2013). Given these collective trends, the days of the traditional mining industry and associated economic infrastructures seem inarguably in peril (The Charleston Gazette, 2013).
Louis A. Johnson VA Medical Center and the UHC
The Louis A. Johnson VA Medical Center and UHC complexes are, without a doubt, impressive health care assets for the NCWV region. However, do these facilities employee a sufficient number of medical personnel to justify real estate prices in the NCWV region? Are the numbers of physicians and supporting medical personnel – as well as associated salaries – sufficient to support 40 to 200 percent variances between realty values and prices? Such staffing and income levels are doubtful, based up simple supply and demand of services required by the local population. Implications of the current public policy dynamics and the Federal budget crisis may also impact regional health care systems. In fact, some may already be experiencing the negative effects of these combined socio-economic factors (The State Journal, 2013).
Current public policy changes are increasingly restricting both public and private health care infrastructure budgets and could be an even greater factor in near future NCWV CMA. Consider the controversial effects of The Patient Protection and Affordable Care Act (Obamacare) on health care employment opportunities, recent reductions in provider reimbursements due to Medicaid revisions, and the Federal budgetary sequestration (Investor’s Business Daily, 2013). Primary national health care anchors - including The Cleveland Clinic - have been forced to reduce services and decrease health care personnel positions by the thousands (U.S. News and World Report, 2013). Physician numbers, already declining due to education costs and reduced Medicaid reimbursements, may be further reduced by Obamacare (Forbes, 2013). If a healthcare behemoth such as The Cleveland Clinic is unable to avoid such reductions, can the Louis A. Johnson VA Medical Center and UHC complexes avoid similar impacts?
FBI and Department of Defense
The current state of the Federal budget also severely impacts another hallmark NCWV realty factor – that attributed to the presence of the FBI and Department of Defense (DOD). For over three years, Federal employees have been excluded from annual cost of living increase adjustments to salaries (CNN, 2013). Furthermore, most are now under various levels of sequestration – meaning mandatory absences without pay (CNN, 2013). According to media reports, FBI employees will be furloughed under sequestration - required to take at least ten days off without pay in Fiscal Year (FY) 2014 – beginning on or near to October 1, 2013 (New York Times, 2013). From a regional perspective, these fiscal impacts are reinforced by the fact that Federal employees in the NCWV are not allocated higher locality pay adjustments (Office of Personnel Management, 2013) similar to those provided to employees in markets with comparable real estate and rental prices.
Many Federal employees are now enduring an increased salary loss due to additional furloughs (above and beyond those attributed to the budget sequestration) as part of the partial Federal government shutdown (Fox News, 2013; The Hill, 2013). The Federal budget debate remains unresolved and sequestrations, as well as the partial shutdown, could become even more protracted particularly when considering the Congressional debt-ceiling debate deadline on October 17, 2013. Congressional failure to adjust the debt ceiling could decrease U.S. credit ratings and negatively impact many financial markets (Fox New, 2013).
The Federal budget sequestration has also necessitated mass reductions in employee levels. The FBI is under a hiring freeze and must reduce thousands of previously available employment opportunities (New York Times, 2013) while the DOD must eliminate 6,000 civilian personnel employment opportunities in FY 2014 (Government Executive, 2013). These facts appear to refute regional NCWV rumors that 1,000 additional jobs will be provided locally by the FBI (Craigslist, 2013), presumably in a new building constructed at the FBI’s Clarksburg facility. According to media, the building “will house” personnel; however, the coverage does not indicate that the latter will be newly hired employees (The Exponent Telegram, 2013). This coverage seemingly reflects the aforementioned FBI hiring freeze as well as a potentially limited DOD presence due to civilian personnel reductions under current sequestration orders. As for reports of the potential FBI HQ relocation to the Clarksburg area, media reports also indicate that the new FBI HQ will likely be placed within close proximity to the Washington, D.C. Beltway (The Exponent Telegram, 2013). In light of these facts, can a buyer or seller reasonably believe that the overall presence of Federal employees justifies a CMA commanding extraordinarily high real estate prices in the NCWV region?
The Bottom Line
So, what does it all mean? What is the reality of realty in NCWV? Will the NCWV region continue to enjoy a real estate bubble that failed to simultaneously burst in concert with much of the U.S. market or has the inevitable finally arrived for a micro-economy that can no longer rest upon short-term energy trends or public policies increasingly unsupportive of the status quo? Should home buyers believe the self-generated CMA of some realty purveyors or instead consider a variety of independent sources that seem to contradict such research? Should home sellers risk an investment loss or foreclosure in the event regional real estate prices and underlying drivers decline given the current U.S. budget crisis or should they reduce prices to at least guarantee some profit from their sale? Can some landlords continue to charge extraordinarily disproportionate rental rates considering that the latter often rival or exceed mortgage payments on comparable homes or should they too consider a revised CMA? Finally and most importantly, are regional employees earning salaries commensurate to NCWV realty purchases that lead to long term residential commitment, a stronger tax base, and further economic development for the NCWV region?
The decision to accurately interpret the reality of realty in NCWV is solely that of the reader.
It is very simple. Prices are determined by demand and supply factors. In places where there is high demand and limited supply, prices will be higher. There is demand for property in NCWV because the area's economy is robust, and the area possesses additional attributes that make it a desirable place to live.
If we didn't have outstanding outdoor venues, wonderful higher education assets, and a robust employment picture we wouldn't have high demand and prices would be lower. It is better to be in a place where people want to be located and deal with the higher real estate prices.
The Reality of Realty in North Central West Virginia
Have you ever wondered why real estate and rental prices in North Central West Virginia (NCWV) appear higher than comparable markets? If one asks some regional realtors, private real estate sellers, or landlords the provided justification often reflects the following statement, ‘The local appraisals or rent levels are based upon our own analysis of local market factors including proximity to the Louis A. Johnson VA Medical Center, United Hospital Center (UHC), and the Federal Bureau of Investigation (FBI) facility, as well as Marcellus Shale trends, limited housing availability, and an expected population increase in the area.’ Regional real estate guides often print a summarized version of the stated justification (Homes and Land of North Central West Virginia, 2013). For example, obtain a copy of the publication and observe how many home advertisements list location proximity to the Louis A. Johnson VA Medical Center, UHC or FBI as a competitive market analysis (CMA) factor.
One might question such analysis, particularly given that it naturally lends itself to potential research bias. After all, a higher asking price potentially results in a greater profit margin. Fair enough – this is an element of a capitalist economy. However, it is problematic when third party research seemingly contradicts a CMA price justification which may be based more upon speculative investment or appraisal than market or property condition. For example, regional Zillow price estimates are frequently five to ten percent less than NCWV realty listings. This is typically a realistic variance due to routine, overall market fluctuations, and Zillow’s exclusion of extensively detailed local market trends (Zillow, 2013). But when some NCWV realty price margins differ by more than 40 to 200 percent in comparison to Zillow estimates, one must reconsider the definition of “realty reality” in the regional CMA and whether speculative assumptions - versus contemporary market conditions – underlie real estate prices.
Is the reality of NCWV market trends – in this instance actual or speculative employment and income levels driving higher property valuations – truly sufficient to support current realty prices? When asking realty purveyors, the answer is yes. But carefully consider the following issues when examining the noted real estate price variances to gauge the NCWV CMA.
Marcellus Shale
Marcellus Shale expansion continues – but where? According to recent reports, Marcellus Shale exploration and drilling certainly continue in WV but operations are increasingly moving to untapped deposits in New York, Ohio, and Pennsylvania (Miami Herald, 2013; Politics on the Hudson, 2013). Ancillary industry reports also support the observation when describing increased infrastructure development for deposits outside of WV (Progressive Railroading, 2013). If there is still question as to the relocation of Marcellus Shale personnel, simply observe the vehicles around you during your daily commute. Does one still observe fleets of white vehicles passing by at high speeds on I-79 or Route 50? Are slow-speed convoys of fracking rigs and water trucks still lumbering along secondary county roads? To some degree, yes; but at levels comparable to recent years – no. Further, if Marcellus Shale personnel are still in the area, why are rental homes and campgrounds suddenly advertising increased vacancies at reduced rates? Has there been a sudden construction or development boom of such amenities or are Marcellus Shale personnel, whom are transient by nature of employment, moving on to newer fields? The upkeep of Marcellus Shale infrastructure does not require the long term residence of large numbers of personnel. Subsequently, exorbitant prices are not justified by the supposition that the long term presence of Marcellus Shale personnel will support near future supply and demand dynamics of the NCWV real estate or rental housing markets.
Coal Industry
The coal industry may also be considered a fail-safe justification for real estate prices in the NCWV region. Historically, socio-economic trends have permitted a cyclical revival of the industry. However, modern government subsidies in renewable energies, increased mechanization by mining operations, and an exhaustion of “easy to reach” coal seams (E&E Publishing, LLC., 2013) will likely decrease the levels of mine personnel required in past operations. Further, recent EPA regulations restricting both coal mining and the operation of coal-fired power plants could further reduce the number of mining personnel and related salaries supporting the NCWV real estate market (The Daily Caller, 2013). Finally, recent public policy has favored natural gas exploration and infrastructure development over that related to the coal industry. Energy plants originally built to burn coal are increasingly converted to burn natural gas (Sourcewatch.org, 2013). Pre-existing or planned coal-fired power plants must increasingly install extraordinarily expensive clean-coal technologies that simultaneously reduce CO2 emissions as well as traditional profit margins (Reuters, 2013; The Daily Caller, 2013). Given these collective trends, the days of the traditional mining industry and associated economic infrastructures seem inarguably in peril (The Charleston Gazette, 2013).
Louis A. Johnson VA Medical Center and the UHC
The Louis A. Johnson VA Medical Center and UHC complexes are, without a doubt, impressive health care assets for the NCWV region. However, do these facilities employee a sufficient number of medical personnel to justify real estate prices in the NCWV region? Are the numbers of physicians and supporting medical personnel – as well as associated salaries – sufficient to support 40 to 200 percent variances between realty values and prices? Such staffing and income levels are doubtful, based up simple supply and demand of services required by the local population. Implications of the current public policy dynamics and the Federal budget crisis may also impact regional health care systems. In fact, some may already be experiencing the negative effects of these combined socio-economic factors (The State Journal, 2013).
Current public policy changes are increasingly restricting both public and private health care infrastructure budgets and could be an even greater factor in near future NCWV CMA. Consider the controversial effects of The Patient Protection and Affordable Care Act (Obamacare) on health care employment opportunities, recent reductions in provider reimbursements due to Medicaid revisions, and the Federal budgetary sequestration (Investor’s Business Daily, 2013). Primary national health care anchors - including The Cleveland Clinic - have been forced to reduce services and decrease health care personnel positions by the thousands (U.S. News and World Report, 2013). Physician numbers, already declining due to education costs and reduced Medicaid reimbursements, may be further reduced by Obamacare (Forbes, 2013). If a healthcare behemoth such as The Cleveland Clinic is unable to avoid such reductions, can the Louis A. Johnson VA Medical Center and UHC complexes avoid similar impacts?
FBI and Department of Defense
The current state of the Federal budget also severely impacts another hallmark NCWV realty factor – that attributed to the presence of the FBI and Department of Defense (DOD). For over three years, Federal employees have been excluded from annual cost of living increase adjustments to salaries (CNN, 2013). Furthermore, most are now under various levels of sequestration – meaning mandatory absences without pay (CNN, 2013). According to media reports, FBI employees will be furloughed under sequestration - required to take at least ten days off without pay in Fiscal Year (FY) 2014 – beginning on or near to October 1, 2013 (New York Times, 2013). From a regional perspective, these fiscal impacts are reinforced by the fact that Federal employees in the NCWV are not allocated higher locality pay adjustments (Office of Personnel Management, 2013) similar to those provided to employees in markets with comparable real estate and rental prices.
Many Federal employees are now enduring an increased salary loss due to additional furloughs (above and beyond those attributed to the budget sequestration) as part of the partial Federal government shutdown (Fox News, 2013; The Hill, 2013). The Federal budget debate remains unresolved and sequestrations, as well as the partial shutdown, could become even more protracted particularly when considering the Congressional debt-ceiling debate deadline on October 17, 2013. Congressional failure to adjust the debt ceiling could decrease U.S. credit ratings and negatively impact many financial markets (Fox New, 2013).
The Federal budget sequestration has also necessitated mass reductions in employee levels. The FBI is under a hiring freeze and must reduce thousands of previously available employment opportunities (New York Times, 2013) while the DOD must eliminate 6,000 civilian personnel employment opportunities in FY 2014 (Government Executive, 2013). These facts appear to refute regional NCWV rumors that 1,000 additional jobs will be provided locally by the FBI (Craigslist, 2013), presumably in a new building constructed at the FBI’s Clarksburg facility. According to media, the building “will house” personnel; however, the coverage does not indicate that the latter will be newly hired employees (The Exponent Telegram, 2013). This coverage seemingly reflects the aforementioned FBI hiring freeze as well as a potentially limited DOD presence due to civilian personnel reductions under current sequestration orders. As for reports of the potential FBI HQ relocation to the Clarksburg area, media reports also indicate that the new FBI HQ will likely be placed within close proximity to the Washington, D.C. Beltway (The Exponent Telegram, 2013). In light of these facts, can a buyer or seller reasonably believe that the overall presence of Federal employees justifies a CMA commanding extraordinarily high real estate prices in the NCWV region?
The Bottom Line
So, what does it all mean? What is the reality of realty in NCWV? Will the NCWV region continue to enjoy a real estate bubble that failed to simultaneously burst in concert with much of the U.S. market or has the inevitable finally arrived for a micro-economy that can no longer rest upon short-term energy trends or public policies increasingly unsupportive of the status quo? Should home buyers believe the self-generated CMA of some realty purveyors or instead consider a variety of independent sources that seem to contradict such research? Should home sellers risk an investment loss or foreclosure in the event regional real estate prices and underlying drivers decline given the current U.S. budget crisis or should they reduce prices to at least guarantee some profit from their sale? Can some landlords continue to charge extraordinarily disproportionate rental rates considering that the latter often rival or exceed mortgage payments on comparable homes or should they too consider a revised CMA? Finally and most importantly, are regional employees earning salaries commensurate to NCWV realty purchases that lead to long term residential commitment, a stronger tax base, and further economic development for the NCWV region?
The decision to accurately interpret the reality of realty in NCWV is solely that of the reader.
Sources available upon request.
I looked through your post again, and believe you pose some questions that deserve closer inspection. That said, thank you for being rather thorough in your approach. You covered a lot of areas in detail, and that took some work. Let's look at things one at a time here, and although I do not have sources to quote, I do live here and am actually somewhat personally involved being a mineral rights owner, so I'll try to provide a different perspective.
Ask anybody anywhere why prices are higher there than any place else, and you will get a similar response. What would you have them say? We charge more because we can do it? They charge more because they can do it and still rent and sell units, it is that simple, and they can do that because there are thousands of people hanging out here that are not "permanent" residents. You quoted an impressive number of employers and asked if they were enough to justify a continuation of the demand. I will suggest that they are, but they are far from the only major sources of employment in NCWV. You left off the thousands of federal workers in the nearby Federal Prisons, NASA, NIOSH, Milan Pharmaceuticals, Greer Industries, West Virginia University, WVU Hospitals, Mon General Hospital, Fairmont General Hospital, WVNET, and many other other significant employers, all of which are at least stable and several of which are in expansion mode. WVU Hospitals is set to build a new, 10 story facility adjacent to the current one and expects to hire nearly 350 new workers to staff it when completed.
NCWV is the primary focal point for healthcare, especially in terms of specialists, in our state and much of the surrounding area, and demand will only continue to rise for treatment as the population continues to get older.
The Charleston Gazette article is spot on in terms of mining employment, but most of the declines have been in the southern part of the state where coal is more expensive to extract, does more damage to the land, and burns dirtier. Analysts predict that coal mined in northern area will see a slight reduction, but for the most part remain near the current levels of production. In addition to the better coal extraction factors here, the power plants in the northern tier are better equipped with scrubbing equipment to reduce carbon output, making it far easier for them to meet the ridiculous EPA guidelines.
It is important to consider Marcellus and Utica shale production in various phases. There is not as much "drilling" activity in these parts as there has been, but only because they currently have an oversupply of natural gas. Many of the wells that were drilled have been capped for future development. A whole different set of workers is needed to process and move that gas after it has been drilled, and those comprise a bigger percentage of the folks we see around here these days. That does not look to change any time soon. In fact, the demand for housing for gas industry people has been so great that they recently constructed a new "extended stay" hotel for them in Sabraton that is always full up. Those guys make good money, so don't expect them to stay in lower tier units if there are better ones available. The lower rents you see on some units reflects the reduced demand for them created by construction of newer, better ones, not a reduction in people working in the area. Drive anywhere around here and you will see new construction.
I am not in a position to comment about your FBI analysis. I will note for consideration that supposedly "liberal" governments ultimately evolve into bigger governments, more government regulations and control, new laws that take away freedoms under the guise of being in the public's best interests, and increased social engineering activity, as those with the power believe themselves to be infinitely more erudite about what is good for people to believe than are the people themselves. With a continually growing array of surveillance equipment on every street corner and highway, police cruisers being equipped with license plate scanner devices, and increased monitoring of all communications, it is hard to imagine a climate where the FBI will not be growing in numbers of employees. We are slowly evolving into one of the most policed and controlled societies in the world. I have to believe the FBI will continue to play an important role in that trend.
Personally, I see lots of trends developing that work counter to the benefit of our country as a whole, but I do not see any that point in a direction of lessened economic prosperity for North Central WV. If anything, the area is well positioned to thrive. If they get an ethane cracker somewhere in the Upper Ohio Valley to take advantage of the area's ample oil and natural gas resources, the whole region will likely flat out take off from the spin off industries.
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