Jun 20, 2008
Unfazed???? How About Dazed and Confused????
20 Jun 2008
Posted by VAR
VAR recently brought a post on Realtor Magazine’s blog to my attention. The article talks about how Charlotte, NC agents are having it “hard at the top”. They are in one of the few US markets which has been unfazed by the national housing downturn. That is, Charlotte has actually shown an increase in property values over the past year. As a result, NAR economists continue to parade Charlotte in the press, as if to say, “See? It’s not all bad!”
This is having unintended consequences. It turns out that because of the all the positive press about how Charlotte is weathering the national housing storm, agents there are dealing with multiple fall-through contracts and sellers who perceive themselves to be immune from the downturn of the rest of the country.
In Hampton Roads, we are going through something similar to Charlotte. VAR occasionally points to Hampton Roads as one of the bright spots in the Commonwealth’s housing market. According to VAR’s most recent figures, the Hampton Roads market has seen values hold steady, and there are even pockets of increases. We also have the luxury of living in a very transient environment. We constantly have people moving in and out of our area (in large part due to the military) and the need for housing is always active in our market.
I suppose we are fortunate in that the media coverage of our local real estate market has leaned toward the “doom and gloom” of the nation at large. Reasonable sellers (for the most part) understand that they have competition in this market and need to compete in order to sell.
Wise brokers tend to use the term “Real Estate is Local”. That is DEFINITELY the case in Hampton Roads. We have pockets where you can’t seem to GIVE a house away and others where multiple offers are still par for the course.
So, where IS our market? Our market is back to basics. Buyers want to see affordable and in great condition. Buyers are looking for single family homes under $245,000 with no updating needed. If they look at condos and townhouses… there are a lot to choose from so they choose the BEST for LESS. Higher end? Buyers want the least expensive home in the neighborhood and they expect it to be in average to good condition. Buyers want a DEAL. If a seller won’t negotiate, the buyer will work their way down the street until they find a seller who will.
Foreclosures? We really don’t have that many. They normally sell within 15 percent of market value so the “deals” are not here. I recently was asked by a bank to complete a BPO for a property about eight blocks from the Virginia Beach Oceanfront. The bank asked for only foreclosed comparables and the closest I could find was more than nine miles away.
The biggest downturns we have seen are in the outlying areas (Isle of Wight, Suffolk, NE North Carolina). These are areas that became “hot” when is was virtually impossible to obtain a decent, affordable home in Norfolk, Chesapeake or Virginia Beach. Since the majority of the population commutes to Virginia Beach, Norfolk, Chesapeake or Portsmouth, the outlying areas are feeling the pinch as commuters have chosen to live closer to their places of employment (with gas at $4/gallon).
So, we are counting our blessings here in Hampton Roads. We still have buyers and we still have sellers. Our inventory is up; however, our sales prices are pretty level.
On a side note…with the price of fuel so high, many vacationers are choosing to stay closer to home and we are seeing more and more tourists from the Commonwealth! Maybe along those lines we can regain some of the lost second home market!