Market Conditions in 23456>Question Details

Mindy, Other/Just Looking in Virginia Beach, VA

Will the house prices in VA Beach go back to 2001-02?

Asked by Mindy, Virginia Beach, VA Tue Oct 28, 2008

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I don't think the posters you mentioned necessarily have anything against Real Estate agents overall. I too, have been accused of being "not so agent friendly" with some of my posts. But the issues I have is the fact that agents very seldom, if at all, talk directly to the economics of the current situaion. For instance, we all know there was an ABNORMAL run-up in prices of homes fueled by speculation, cheap, easy money and the sup-prime debacle. Of course, every agent on here will tell you "Yeah, but not in my back yard." But that just doesn't pass the smell test. Right now prices in the Hampton Roads area are WAY out of whack with incomes for the area. As Lori said, prices have DOUBLED since 2005 in this area. I'm sorry but that is the very definiton of a "bubble". I have read on here by some "professionals" that we just need to educate the buyer. It's not the buyer that needs educating, its the seller and the agents that REFUSE to admit we are not in the need of a major correction. Do I think agents are fully to blame for this? No, but I don't think they are blameless and there are things they can do about it. For instance, when a seller calls you to list their home for 320K they bought in 2006 for 220K, tell them "No, it won't sell in this market and I won't list it unless you agree to list it for 230K." And if EVERY agent did this, instead of having a bunch of listings sit for 10 months then we could all start moving this market again. To me, when I look at a house that's been sitting for 12 months I know right off the bat it is overpriced. And don't tell me "hey, it's got 45K worth of equity." I know that's BULL because if it did, you'd sell it for 45K more than the asking price you're not getting. C'mon people, it isn't rocket science!!!!
6 votes Thank Flag Link Fri Oct 31, 2008
In reference to the debate on the value of realtors, think about this question...who does the realtor really work for, the buyer or the seller? Actually, neither. The realtor works for the SALE. No one gets paid until the sale is made. So as the seller of a home, let's say you owe $200K on a home. If you list a home for $275K and sell for $250K, the realtor commission was reduced from $16.5K to $15K. Do you think the $1,500 is really important to the realtor at the end of the But the $25K lost to the seller is certainly significant, reducing profits by 40%. The goal of the realtor will be to convince you to sell, or buy so the sale is made and everyone gets paid.

My advise to buyers...educate youself about the market and represent yourself when buying. The seller's realtor will start to work for YOU if you do not use a "buyer" agent because the seller's realtor will now pocket the entire 6% commission if the home sells to YOU. Now the seller's realtor works for YOU.

My advise to Sellers... Don't sell in a depressed market, where the marketing power of the MLS and realtors are necessary. Wait until the market is right and FSBO. Just like stock low sell high, timing is everything.
2 votes Thank Flag Link Sat Jan 17, 2009

2001? No, I don't think so. Take a neighborhood in VABCH and look at sales from 2001. The prices had nearly doubled in some by 2005. At that point, the market should have slowed to a normal growth but didn't. If prices went back to 2001, the homes that are on the market for $300 now would be closing at $125. If you look at homes in Ocean Lakes, for instance, a 3/2/1 1600 sq ft single family was selling for around $100-125 in 2000. Similiar homes are now selling (yes closing) in the mid to upper 2's. You may find a home in enough distress to negotiate the price down, but it's more likely to be closer to the 2005 levels.
2 votes Thank Flag Link Fri Oct 31, 2008
To address NonRealtor, your stats don't quite hold water. Your assumption would require everyone in the area to make $50k EACH. I'm pretty sure you realize that's not true. Safe to say you also realize that for every person making below $50k, there is someone making more than $50k. Let's not pretend to say that all the houses that are for sale in this area are over $300k, either. Before you start throwing stats out, use them in context. That's My Humble Opinion. The national averages point to prices currently being around summer of 2004 levels. We are still well above that point. Here is how sales price per square foot has trended over the last 7 years in a typical, non-new construction subdivision in Virginia Beach...
June 01 - June 02 $76
02-03 $83
03-04 $99
04-05 $128
05-06 $145
06-07 $162
07-08 $156
07-08 $156
2 votes Thank Flag Link Tue Oct 28, 2008
Hi Mindy! As an oceanfront REALTOR in Virginia Beach here are updates for the New Year. What I am seeing is a 15 to 20 % listed to sold price ratio. For example, recently, I listed a north end property as the third agent. Her home was priced with the first agent at 529,000. I gave her the ratio in my market study, but she still wanted to reduce to just 478,000. I did personalized marketing for her, and within one week, she had a cash offer of 450,000. The exact number I told her. December 31, the home two doors down on the market for 2 years at 529,000 sold at 444,000 cash offer. It really all comes down to price, terms, conditions, and the agent you select.
There has also been an increase of new sellers in the New Year. Many of my newest appointments have been with sellers who are tired of paying the high assessments on their yearly taxes, and are not seeing the numbers match up with what they are bringing in rental income for these properties. So we have more options for buyers to choose from in 2009.
Good news is that there is a new wave of rosee buyers realizing the low interest rates and even making cash offers on properties priced to sell.
Hope this helps!

Best Wishes,
Anja Howard
1 vote Thank Flag Link Sun Jan 18, 2009
You are correct, Mike. That's why I spent 3 hours last night and have been working all morning to pull sales data for my clients so I can make sure that the offer we write reflects the best possible deal they can get. After approximately 4 months of showing property and comparing neighborhoods, they have made a decision on where they want to spend the rest of their lives. Since they are my past clients and this is my third transaction with them, I'm sure that they feel that, in the past, I've only cared about getting my commission when working for them. I've worked with them for 5 years and I think that they know that I care more about getting paid. I would never had had their repeat business. Worrying about my clients being happy actually keeps me up at night...something that you may not think is true but it is.

You are way off on representation. The seller does not represent the buyer when the buyer comes without an agent. The agent represents the seller and the buyer is a customer unless previously agreed upon. The listing agent doesn't always pocket the whole commission, either. Oh, and the $25k difference in price IS a big deal to us. Having a happy client is one reason. If we sell a home and all the neighbors think that we haven't done a good job, we don't have any hope of doing more business in that area. Also, those stats are used against us when we are competing for a listing.

Some people can buy and sell on their own and that's great. Some do not want to. Sounds like you've had a bad experience and that's too bad.
1 vote Thank Flag Link Sun Jan 18, 2009

I don't see them going back that far ever.

Unless you had to buy right now you would want to watch the inventory in the area start to decrease month after month. Prices are not yet done falling in VB and when they are it will be a gradual U shaped rather than V shaped curve, so it will still be easy to buy near the bottom.

The so called "Professional" realtors on here are generally a joke. They are high school educated sales people who spout the NAR tagline, "It's a great time to buy".

Ox may be a little agressive in his posts, but he is essentially correct.

Search for the "Is it a good time to buy?" thread with about 2,400 posts. Some good (and bad) technical info and realistic realtors bashing the crazy ones.
1 vote Thank Flag Link Thu Nov 13, 2008
If you go to a used car dealership and asked the salesmen if a particular car is a good buy what do you think the response will be? When reading these posts, just remember that this site is a virtual sales floor...
1 vote Thank Flag Link Fri Oct 31, 2008
Anyone looking to purchase a home in this market needs an aggressive agent. Just because list prices haven't come down as much as they should does not mean the sales price on that home won't be lower. You can't be afraid to make an offer you feel is fair. Don't low-ball a seller simply because you think you can. If you like a home and feel you would like to make an offer, work with your agent to determine what a fair price should be and present that offer along with your supporting facts. I've been successful with this method numerous times. Typically the listing agent is thankful for the help in getting their client to "see the light". A lot of sellers hold on to a high list price as if it were real money. They don't want to realize "a loss". They typically are motivated. Sometimes you will find a home where a seller simply won't budge. You and your agent need to be willing to move on. Be aggressive and be fair and you will find excellent deals to be had... in any market.
1 vote Thank Flag Link Thu Oct 30, 2008
Hi Jim,
I'll be relocating to the Hampton Roads area in a couple of weeks and have been researching the market in that area for several months now and I have yet to see that prices are down. If anything, I still see sellers who bought at the top of the "bubble" in 2006 trying to make 40% profit selling now. Could you please show me some evidence of prices dropping?
1 vote Thank Flag Link Thu Oct 30, 2008
First let me say I am an optimist and see the glass as half full.There are more positives than negatives in the market. Interest rates are still good,Supply is good,prices of homes are down,Sellers are making consessions(closing costs,repairs,warrenties,etc.),The goverment is offering 1st time home buyers a $7,500.00 tax break.Some of the writers seem to have had a bad experience with an agent.For that I am sincerally sorry.That is why it is important to get a real estate consultant.Check out one of my web sites http://, Call me at 757-409-0664 with any questions .Free and without obligation.
1 vote Thank Flag Link Thu Oct 30, 2008

Notice a pattern here from the "Professional Advice" that these salesmen/women are providing? Pure negligence on their part. Part of the reason why we are in the current situation. When they say that they are looking out for your best interest, rest assured that is not completely true. Enormous conflict of interest in this line of work, this alone should justify no trust in these salesman. Do some research and educate yourself is the best advice...
1 vote Thank Flag Link Wed Oct 29, 2008
Hi Mindy, doubt that low...I think we have flatlined, and will now move over to the more traditional/historical gains of 2-5% annually...but of course everyone has their opinions!
1 vote Thank Flag Link Tue Oct 28, 2008
Its very hard for anyone to predict market conditons with any certainty. I personal put my money in real estate. I have taken many investment courses over the years and real esate always outperforms stocks and bonds over the long haul. Even if property values aren't soaring like they did a few years ago they are still an excellent investment. Right now the rental market is fantastic. Anyone who owns rental real estate has a tenant who is paying rent. If you worried that you are upside down on your mtg. there are options to get out from under. Call your local lender and find out about your options for refinancing. In the meantime if you need to move you can always rent your place out until prices start to go up again.
0 votes Thank Flag Link Fri Aug 23, 2013
If we are at 2003 prices then any offers you make on a new home should be at or below 2003 levels. Now is not a bad time to buy when current finance rates are considered. However, home values will fall dramatically when interest rates finally rise. Keep that in mind when making cash purchases. Mikeyc is still shopping!!!
0 votes Thank Flag Link Fri Jan 20, 2012
Most estimates say, in most markets, we are at 2003 prices
0 votes Thank Flag Link Thu Jan 19, 2012
Wow, only two weeks later, and I may change my mind that they will drop to those levels in a few areas.
0 votes Thank Flag Link Mon Dec 1, 2008
The only value I can see in homes in Virginia Beach dropping through the floor will be no new construction! We might still be able to have trees left in Virginia Beach! When home prices drop below what it costs to build a home of that size then building will grind to a halt. It won't ever happen. But it sure would be nice to have more trees!
0 votes Thank Flag Link Sun Nov 16, 2008
I have been home shopping for some time. They will not go that low but still need to come down from the current prices. Right now the government is trying and succeeding at keeping the home values at fasely inflated values. Mostly because of local tax revenues. Think what would happen to the localities if they had to give up 20- 30 percent of the tax they are expecting to receive for their budgets. Most homes are 10-30% above realistic prices and most realtors know it or should. I am free and clear of my first home and looking for a home in the 2000-3000sf range. Fair and reasonable values for these homes are $135-155. but there are few to choose from in good neighborhoods with acceptable schools. The money the government "donated" to the bailout will soon be squandered away then home values will continue to decline. The problem will remedy itself in due time but not with the help of the federal government. Until then i am still shopping.
0 votes Thank Flag Link Sun Nov 16, 2008
Dan and Lori,
You're both absolutely correct. Well, aside from the double since '05, but yes double from '01 to '05. And I'm not saying agents don't have a bias. They definitely do, they want a sale... they want the commission. At the same time, a good (or should I say smart) agent always puts their clients first and their commission second.
Web Reference:
0 votes Thank Flag Link Fri Oct 31, 2008
..doubled from 01 to 05. Not as much from 05 to now, but more than market average, for sure. Dan is correct about there being houses that should not be on the market. I just had the 'saturation' conversation with another agent this morning. On the other hand, I just listed a property in NN that had multiple offers and was under contract by the third day. I'm not saying that all homes I list will do that, but there is that magic combination of a seller that can afford to price their house correctly, the condition being what it should be and buyers who were ready and understood the value. Sales are down, prices are adjusting and the market has cooled BUT just because the market isn't what it was from 03-07 doesn't mean that it's dead. A market is a market. Houses will always sell for what buyers are willing to pay for them. I have turned down listings and I have advised some buyers to wait. If you have no faith in the market and no faith in your judgement or or agents judgement and/or advice, you should not enter into a real estate transaction. At the risk of being slammed, I don't think that prices are that out of wack with income. What's out of wack is the expectation of what 'we deserve'. If you're making 60k a year, you shouldn't buy a home that carries a mortgage that is higher than you can afford. Some people shouldn't spend over 20% on a mortgage, it depends on your handling of your financing. If you are looking at a $200k townhome and putting 20% down, the remaining payment with tax and insurance could be around 25% of your income. For many, that's very affordable. Who said that people need to buy a 2500-3000 sq ft home?
0 votes Thank Flag Link Fri Oct 31, 2008
Gosh, used car dealers get a bad rap. We've bought three used cars in Hampton Roads and been very happy with the terms and service. We bought a Mazda from Williams Auto Mart in Smithfield (think the guys' name was Draper) and a Mitsubishi from Pomoco in Hampton (forget the guys' name but can find it) and a Toyota from Denbigh Toyota (from Lonnie or Lennie??). Happy with all three cars. Negotiated a good deal, they all ran great...still do except for the Toyota. One of our children was hit by a commercial truck last year and it totalled the Toyota. That beater protected her the way it should have. When we bought the car, we were looking at several used cars on the lot. Lonnie held off and had us look at another car and said that, if he were buying something for his kid at that price range, that would be the car he picked. We agreed. We would still recommend each person, and buy from them again, if needed, depending on what type of vehicle we needed. I know this doesn't answer Mindy's question but for those people that always bash other people and are always getting 'screwed over' there may be a common denominator in the picture and it may not be us 'cheesy' salespeople.
0 votes Thank Flag Link Fri Oct 31, 2008
MarketReality, Ox, and NonRealtor,
I've seen a few of your posts and they are very negative towards Realtors. I value your ability to share your opinion (and am not a fan of used car dealers myself), but I'm curious to what caused this opinion? Did you have a bad experience with a Realtor or would you rather just not pay the commission? I understand your position and can even relate to it in some instances. Plus, you're correct in saying that it is possible to take a class online and pass the license exam and and pay for MLS and be a real estate agent with very little knowledge. However, to become a Realtor or Graduate of the Realtor Institute or Accredited Buyer Representation or Certified Residential Specialist (several professional designations) it take much more than just an online class... there are ethics training and strict standards and college level courses (in classrooms) and minimum transaction requirements (just to name a few) to qualify for many of these. And, yes, I can understand your point-of-view on the bias aspect of a Realtor here in these forums. However, a buyer using an agent to purchase is free (sellers agree to pay the commission) and public perception of for sale by owner properties is negative (all they see is "SALE") so why would you want to turn down the advice of an expert when in both cases they can save you money and get professional advice and support? I agree that you should always pick a great agent, but I disagree that all agents are dirty old salesmen.
Web Reference:
0 votes Thank Flag Link Fri Oct 31, 2008
Dan ,I have a closing scheduled for 3 pm Fri. The address is 4004 Cedar Lane Ports. The neighbohood is Merrifields .This is a 7 room house with 3 br 1.5 bths,1451 square ft. It has the typical master br,dining rm,Kit., Family rm & living rm.It is on crawl W central Air.Fenced in back yard. this is a short sale ,my client pd 149,000. & received 7,500 . in closing costs assistance and prepays. The city assessment is $167,800. Oh, its brick. I can e-mail you properties that are under the cities assessed value. call me if you are serious.757-409-0664
0 votes Thank Flag Link Thu Oct 30, 2008
Ox, I notice a pattern in your responses. But I wouldn't dare call it negligence.

Also looking at the question again...there really isn't a time frame put. But to assume it's talking about the here and now, my crystal ball says no. Unless we have a huge financial crisis and income falls by 50%, we won't see those prices here locally ever again. Just imagine if we did, people would buy up property so quickly and it would increase the prices right back up, simple economics 101 as I hear it put...
0 votes Thank Flag Link Wed Oct 29, 2008

You’re certainly getting some bang for the buck here! Lots of good points and non realtor is making me accountable for my earlier statements and assumptions…which is a good thing!

First you asked about Virginia Beach market values…Hampton Roads and Virginia Beach are not one and the same. Hampton Roads contains the 7 cities, Norfolk, Portsmouth, Chesapeake, Suffolk, Hampton, Newport News and Virginia Beach. Today on the local MLS, Virginia Beach had a total of 3,642 active listings, not 15,000! Also…go to CNNMoney at for the real numbers on our area and there you will find the median income to be close to $70k and the median home value to be just under $250k. As far income being relative to how much one can afford, that can only be determined by the amount of debt one has not the income alone.

Regarding the declining market, we have been in the current shift since August 05 and according to my sources in the mortgage industry we have already seen the worst of the resetting loans here in fact I have been told that Fannie Mae and Freddie Mac have had VB off the “declining market” status for some time now!

Mindy non realtor is right, supply and demand does rule here too however we are starting to see strength in the low end of our market around $200k and below. In fact I recently crunched the numbers and Bank Owned properties in VB are selling at 98% of their list prices which I found to be amazing. Also…I recently listed a Bank Owned home for a major financial institution and sold it in 23 days with multiple offers turning away 5 contracts! I agree with Drew...the investors are back in our market and are buying in our market heavily...that's a great sign! I just talked to another buyer tonight that wants to buy a townhouse for his daugther at the beach...he's a sophistocated buyer and is eager to pull the trigger!

I guess the big lesson here is your going to get a lot of opinions online from interesting sources from a variety of places with a variety of agenda’s.…Know who you are getting your advice from…this is my market, I am trusted and respected in our community with lots of references available. We are not completely immune from the crisis at hand but real estate is a local business and there are many reasons why we are stronger here than elsewhere.
0 votes Thank Flag Link Tue Oct 28, 2008
While it is true there are a vast increase in the number of houses for sale doesn't constitute a drop in prices. It simply implies a longer period of time to sell your property. Price decreases only happen when situations arise that people need to sell their property more quickly and aren't willing to wait for that individual to come along that will pay market value, so they drop market value to find a buyer willing to buy faster. Then you start to see price decreases. We're simply seeing more people willing to wait for more realistic time frames to sell their property, 3-6 months vs 3-6 hours. When you're selling the house you live in, you have more flexibility than a builder selling a liability they need to get out from under.

While Realtors do maintain a positive outlook on the market at most times. I, on the other hand don't list other peoples homes for sale, I buy, renovate and sell my own properties. I'm still buying which means I'm comfortable at where the market is in certain price ranges. When I stop buying, there is a problem. Realtors will always sell property, but if investors leave the marketplace it's time to watch out. Markets like California, Nevada, Florida, investors have left the marketplace or turn into landlords, those are the indicators to watch out for. Just like the builders, we know what's going on before many homeowners and agents do. So just stay in an affordable range and you'll be okay. Stick to a good school zone, and nice neighborhood and you'll always win out in the long run, sometimes a longer run than you might want. This isn't get rich quick, it's gain wealth over time.

0 votes Thank Flag Link Tue Oct 28, 2008
As you can see from the realtors responses, they feel that Virginia Beach is immune from the crisis. San Francisco thinks they're immune too. 15,000+ houses listed for sale. If you looked at 10 each day, it would take you 1500 days to see them all (4.1 years). Be patient, supply and demand always rule a free market, and currently there is an oversupply, so prices drop. econ 101. Good Luck
0 votes Thank Flag Link Tue Oct 28, 2008
Do some research and be patient, this area just started declining. Currently, there are over 15,000 houses for sale in the Hampton Roads area. If the median income is 50K, the only way people could afford 300K-400K was with a funny loan. These loans will be resetting. IMHO, by 2012 Virginia Beach will be similar to Las Vegas, free falling prices. Good Luck, wait to buy, you will be happy you waited.
0 votes Thank Flag Link Tue Oct 28, 2008
Great question Mindy! That's a question we actually hear a lot! Prices have already come back quite a bit in most neighborhoods but the truth of the matter is that with lots of inventory, great interest rates and a stable local economy and real estate market locally. This is actually one of the best times to buy that I've seen in 21 years in the bz!

The smart money out there is taking advantage of this "move up" market and trading up! What do they say in the stock market "buy on the dips"...well...we've got a dip!

This is the time to buy what you want for the long term and take advantage of the "market of the moment".
0 votes Thank Flag Link Tue Oct 28, 2008
Absolutely not. The only way that would be possible would be a complete financial collapse of all the nations banks at once. The government came in and prevented a global collapse here. We're still not seeing prices of late 2005! At least it depends on what price range you are seeing. Under 250k, you're sitting pretty. I wouldn't say you'll have appreciation, but you'll be protected for the most part. More distressed sales will come up on the market, but those sales are typically not used in residential appraisals, for the reason they had to sell and discounted their price accordingly. The notion that 1 foreclosure in your neighborhood brings down prices is inaccurate (along with most other news reportings). Appraisers are told NOT to use foreclosures in their analysis because they don't reflect true value.

Got a house over $275k in Virginia beach and you will probably see a value decrease. Some dropping to 2005 prices, but financing is still low and more affordable housing is still in demand.

Hypothetically if you saw prices drop to 2001 levels while rents stayed high, you wouldn't see properties for sale, landlords would buy them all up, which would increase demand and inflate prices. So no we will not see 2001 prices, don't listen to Ethan or Bubbleboy locally!

Expect stability in affordable price ranges and wait and see what the economy does.

When investors stop buying houses, then be worried. But we're still buying houses, so things are okay. All the speculators are getting flushed out of the market right now.
0 votes Thank Flag Link Tue Oct 28, 2008
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