All of the attention that the media has given the housing market has caused me to reflect on our market in general. In looking back at 2006 it strikes me as quite an exciting, out of the ordinary year. Even though the housing market began to “rightfully” correct, we still can chalk it up to being one of the best years in real estate history. Okay, it wasn’t the best ever but hey, I’ll take 3rd or 4th best year nationally anytime! Locally in Hampton Roads, 2006 was probably the second best year ever in our real estate history based upon total closed sales volume in the Real Estate Information Network (REIN).
Many consumers opt to buy new and in Hampton Roads currently that is around 13-15% as evidenced in our subdivisions as sales and qualified traffic have been strong. New homes are priced very competitively. And while there is increased new construction inventory in our market, it offers buyers a marvelous selection to choose from and many attractive incentives to go along with them. We are probably nearing the end of incentives and property prices will become more stabilized. Now is the time for home buyers to recognize their opportunity to make an incredible investment and thus turn this market around quicker. Many of them, I believe, have delayed because they may not be able to sell their current home for the same price their neighbor sold for a year ago. However, the theoretical “loss” is more than offset by the reduction in the prices of the home they are considering for purchase. It’s now up to our re-sale agents to educate Sellers on the need to realistically price their properties so that some of our inventory can be absorbed thus doing their part in turning things around as well.
I am also of the opinion that we have been victim of a “media recession” in that just as the media helped feed the frenzy when the market was reporting record level highs, they may now be overstating the current market conditions, particularly here in Hampton Roads. Recently new construction housing starts were down and that received quite a bit of “negative” press. To me, dropped housing starts are a sign that the builders recognize that we must absorb some inventory before we saturate the market with more and that’s a good thing. Our market has always enjoyed a steady pace of growth and has not experienced the sharp “spikes” of other national markets. Provided our economy remains steady, interest rates stay close to their current rate, and sellers continue to recognize their need to adjust prices to fit the new “reality”, there is no reason to think that we won’t resume our normal upward movement by the beginning of 2008.