ODU Experts Give Presentations at First Hampton Roads Residential Real Estate Market Review
The number of residential properties for sale in the Hampton Roads real estate market has dropped by nearly 20 percent in the past year, as prices have sunk to pre-2005 levels.
That's one of the key findings of the first-ever Hampton Roads Residential Real Estate Market Review, sponsored by Old Dominion University's E.V. Williams Center for Real Estate and Economic Development (CREED).
In a presentation Wednesday, Nov. 2, at ODU - to real estate leaders, consumers, academics and market analysts - Vinod Agarwal, professor of economics and director of the Economic Forecasting Project at ODU, showed that housing prices for 2011 have dropped by 10.7 percent through September. But Agarwal pointed out that the local real estate market saw giant surges in year-over-year price increases from 2003-06, increasing by more than 20 percent annually in 2004 and 2005.
In the Hampton Roads market, there are currently 11,597 residential properties for sale, a decline of more than 3,000 from 12 months ago. The drop in available properties is due to fewer resales and fewer new properties being constructed. Agarwal estimates that it will take 7.4 months for the market to absorb the current resale inventory, and six months to absorb the new-construction inventory.
The Nov. 2 event marked the first time CREED has hosted a market review aimed solely at the residential housing market. Every March for the past 16 years, the research of ODU academics and other market real estate experts has been featured in CREED's annual Hampton Roads Real Estate Market Review.
John Lombard, CREED director and an ODU professor, said the residential market review is designed to bring together public, private and academic experts to examine current issues and trends in residential real estate.
"By creating an annual event solely focused on residential real estate, CREED hopes to establish ongoing dialogue of residential real estate issues faced by our community," Lombard said. "In bad or good economic times, the housing market impacts nearly every family in Hampton Roads. There is a requisite need for the broad consumer audience to gain insight and understanding on important issues, such as bankruptcy and future market trends, in order to position Hamptons Roads residents to make strategic and sound economic choices in the residential real estate marketplace going forward."
The keynote speaker for the event was Michael Seiler, Robert M. Stanton Chair of Real Estate and Economic Development in ODU's College of Business and Public Administration.
Seiler, who is director of the recently formed Institute for Behavioral and Experimental Real Estate (IBERE) at ODU, gave his address on "Understanding Strategic Default: The Maven's Impact on the Recovery of Residential Real Estate."
His talk was based on a study he co-authored with Andy Collins, research assistant professor at ODU's Virginia Modeling, Analysis and Simulation Center, and Nina Fefferman, an assistant professor at Rutgers University. The study explores the role of market experts in both accelerating and slowing the rate in society that people who can afford to make mortgage payments make the strategic decision to walk away.
Studies such as the "Maven" comprise the bulk of the real estate research that will be conducted by IBERE. It was created to help real estate professionals understand key issues in the residential real estate market by becoming the leading behavioral and experimental real estate organization in the world.
IBERE researchers will focus on identifying and measuring flaws or biases in people's decision-making processes around real estate issues, suggesting ways to correct them, and help the market as a whole.
Other presentations at the Hampton Roads Residential Real Estate Market Review were made by Frank J. Santoro, U.S. bankruptcy judge, Eastern District of Virginia, and J. Van Rose Jr., president of Rose & Womble Realty Co.