Market is slowing down

What went up has come down and vice versa; Lower prices, longer waits in real estate
BY JEREMIAH MCWILLIAMS THE VIRGINIAN-PILOT

The South Hampton Roads real estate market has enjoyed several years of muscular growth, with sellers reaping huge returns and buyers snapping up available properties. But the most recent regionwide data reveal signs of a slowdown.

Properties selling in South Hampton Roads stayed on the market for an average of 33 days in October, the longest since February, according to Real Estate Information Network Inc., which controls the region’s Multiple Listing Service. Median sale prices

rose nearly $48,000 between January and July, hitting this year’s high of $235,500, but prices have fallen $10,000 since.

In Virginia Beach, which represents nearly 40 percent of the region’s sales, median sale prices fell to $230,000 in October, a six-month low.

“It used to be people could put their houses on the market at pretty much any price and in pretty much any condition, and it would sell,” said Dave Macklin, a partner with The Butler Team, which is affiliated with RE/MAX Allegiance in Virginia Beach. “We don’t want to say it’s reversing or people are losing, because that’s not true. Instead of getting 18 or 20 percent returns, they may get 5 or 6 percent. It’s going to be a more realistic market for everybody.”

Properties sold in Norfolk in October spent an average of 35 days on the market, the longest stretch since March. In Virginia Beach, properties lingered for 29 days, a full week longer than in September.

“We’ve have seen some slowdown throughout all the markets, including Hampton Roads,” said Bob Blount, chief executive officer of RE/MAX Allegiance, which has offices in Virginia, Maryland and Washington, D.C. “I think it’s just a matter of the market returning to a more normal market – 60 to 90 days to sell a home, rather than multiple offers within hours.”

Nationwide, housing starts cooled in October, dropping 5.6 percent from September to a 2.014 million-unit annual rate, the U.S. Census Bureau and the Department of Housing and Urban Development reported last week. Single-family home construction slipped 3.7 percent.

“We are well aware that some slowing of demand is inevitable after the recordbreaking sales activity that has prevailed recently,” Dave Wilson, president of the National Association of Home Builders, said in a statement. The group’s November survey of single-family home builders “showed a significant slowdown of sales activity,” he said.

There are indications of resilience in Hampton Roads. Prices in Chesapeake and Norfolk remain high, with average Norfolk properties selling for $184,000 in October, just $750 less than July’s peak prices. In Chesapeake, prices jumped about $19,000 from September to October, hitting $269,000 .

Average prices for all categories of real estate in South Hampton Roads were 24.4 percent, or $44,250, higher than the same month last year, according to the Real Estate Information Network.

Median prices for existing single-family homes in Hampton Roads, including the peninsula and slivers of North Carolina, were $208,600 in the third quarter of 2005, up 14.5 percent from the same period a year ago, according to the National Association of Realtors.

Median sale prices in Portsmouth were $150,000 in October, up $37,000 from January. In Suffolk, prices have risen about $27,400 this year and were about $260,000 in October.

“Hampton Roads is still a vibrant market,” said Porter McNeill, a Realtor with Coldwell Banker Professional Realtors in Chesapeake. “It may be slowing a little bit, but it’s still vibrant.”

Any apparent cooling in the real estate market should be kept in perspective, real estate professionals said. Markets typically slow down in the fall and winter as consumers focus on the holidays.

“The spring will tell us a lot,” said Lee Halyard, broker-owner at Lee S. Halyard & Associates Realtors in Chesapeake. “Will we see the normal surge in interest, or will we see these extended market times?”

According to Realtor KK German of Rose & Womble Realty Co., “Everyone is kind of holding their breath and waiting to see what January brings.”