Today's Virginian Pilot looks at the abysmal state of real estate in the Hampton Roads area of Virginia - an area that by many reports is relatively "stable" compared to housing markets in areas such as Florida, California, Arizona and Nevada, and where unemployment and job losses are not as severe as the national average. What's driving this trend? In my view it's very simple. The banks and financial houses that were bailed out with taxpayer money are not lending (even as obscene bonuses are being paid out to many of their personnel). Other than lower end homes - i.e., homes typically under $200,000 being purchased by first time home buyers - people cannot get mortgage financing. And as the price tag of homes goes up, so does the difficulty in securing financing. Indeed, the only larger loans we are seeing are refinances where the owners have huge amounts of equity. Things are equally bad in the commercial lending realm. Unless and until Obama and Congress get banks lending again, the economy will never recover. Here are some story highlights:*
New-home construction and sales in Hampton Roads last year fell to their lowest point in more than two decades despite a tax credit for first-time home-buyers and record low interest rates, according to a report released today.
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A similar trend was seen across the country. The number of building permits issued in 2009 fell 37 percent, according to figures released this week by the U.S. Commerce Department.
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The report also showed that less expensive new homes dominated the market. About 70 percent of the single-family detached homes sold in Hampton Roads last year cost less than $400,000.
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The Dragas Cos., which specializes in less expensive homes, led the region, selling 233 homes for $51 million in revenue. The company also led the region in sales in 2008. Helen E. Dragas, president and CEO of the builder, said in an e-mail that the market for homes costing less than $200,000 is likely to remain strong this year.
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New-home construction and sales in Hampton Roads last year fell to their lowest point in more than two decades despite a tax credit for first-time home-buyers and record low interest rates, according to a report released today.
*
A similar trend was seen across the country. The number of building permits issued in 2009 fell 37 percent, according to figures released this week by the U.S. Commerce Department.
*
The report also showed that less expensive new homes dominated the market. About 70 percent of the single-family detached homes sold in Hampton Roads last year cost less than $400,000.
*
The Dragas Cos., which specializes in less expensive homes, led the region, selling 233 homes for $51 million in revenue. The company also led the region in sales in 2008. Helen E. Dragas, president and CEO of the builder, said in an e-mail that the market for homes costing less than $200,000 is likely to remain strong this year.
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Housing powers a huge portion of the economy and until it revives, expect the recession to continue. Also, expect home prices to fall, leaving more borrowers "upside down" and owing more than they can sell their homes for in today's market.
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