THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, December 30, 1995 TAG: 9512280220
SECTION: REAL ESTATE WEEKLY PAGE: 02 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY JEANNE MOONEY, SPECIAL TO REAL ESTATE WEEKLY
LENGTH: Long : 123 lines
In the wispy haze of their crystal balls, they see a build-up at Oceana Naval Air Station, a Coast Guard posting in Norfolk and a sound job market in Hampton Roads in 1996.
They also see interest rates on mortgages sitting pretty.
And they see first-time home buyers as well as the so-called ``move-up market'' fueling sales.
In broad terms, 1996 will be a favorable year for home buyers and sellers, predict four leaders of local home building, selling and mortgage lending associations.
``The conditions are set for a reasonable growth market, but not anything that looks overly spectacular,'' says Ronald C. Ripley, president of the Tidewater Association of Realtors Inc., a group with 2,700 members in Virginia Beach, Norfolk and Chesapeake.
``It's definitely not '93, but we're looking for a very positive year,'' says Sarah B. Stedfast, president of the 60-member Tidewater Mortgage Bankers Association.
In 1993, mortgage rates fell below 7 percent and home buyers mortgaged $1.1 trillion nationwide, Stedfast says. In 1995, with interest rates hovering around 7.5 percent, consumers mortgaged about $680 billion. In 1996, consumers are expected to mortgage about $750 billion.
Locally, home buyers may go west to Suffolk to plunk down their fortunes in the new year. They did in 1995.
According to Metro Multiple Listing Service Inc., the volume of sales of single-family homes reported to MLS grew 30 percent in Suffolk in the first nine months of 1995 over the same period in 1994.
Sales dropped 22 percent in Chesapeake, 16 percent in Virginia Beach, 9 percent in Portsmouth and 5 percent in Norfolk for the same period, according to MLS. Combined, Smithfield, Franklin and Isle of Wight saw a 23 percent increase in single-family home sales, according to MLS.
Albie Viola, president of the Tidewater Builders Association, says Suffolk is poised for another boom year.
Land is inexpensive there, Viola says. A 1,500 square-foot lot in Suffolk sells for about $30,000, while a similar size lot in Virginia Beach goes for $50,000 on up, he says.
And Suffolk is not saddled with a water shortage, as Virginia Beach is, or with salty water, as neighborhoods of Chesapeake have been, Viola says.
``If Suffolk can handle it, that's where the growth is going to be,'' Viola says.
In Virginia Beach, meanwhile, builders cannot tie new subdivisions into city water. That means they must sink wells, and depending on the water quality, provide treatment for the water. That can discourage builders, Viola says.
``There's not a lot of new subdivisions being put in,'' Ripley says. ``You're not going to see any significant subdivisions because of the water problem.''
Yet Virginia Beach is still growing. For instance, Ripley says, the city issued 1,132 building permits for single-family homes in the first nine months of 1995, 10 percent more than the 1,029 permits issued in the first nine months of 1994.
In Chesapeake, levels of chloride and sodium found in the drinking water for the Great Bridge and Greenbrier neighborhoods increased this summer, giving the water a nasty taste. Many residents opted for bottled water.
``There's a great concern with Chesapeake's water quality,'' Viola says. He predicts that home buyers will steer from the affected neighborhoods and buy elsewhere, perhaps in the Western Branch or Deep Creek neighborhoods of Chesapeake, where the water isn't questionable.
``I've already seen a little of that,'' Viola says.
Fred Helm is incoming president of the Hampton Roads Realtors Association, a newly merged group comprising the Portsmouth/Chesapeake Association of Realtors and the Suffolk/Franklin Association of Realtors.
Helm says Chesapeake's water quality has improved greatly since the summer, when the chloride and sodium levels soared.
``It's a world of difference,'' he says.
So far, Helm hasn't met anyone who has refused to buy a home in Chesapeake because of the city's water quality. And he hasn't seen an exodus from the city, either.
``I don't believe it's going to become a major factor'' among buyers, Helm says of the water quality.
The cost of a home and the quality of the local schools are the biggest influences determining where someone buys, Helm says. Water quality falls into the mix of other considerations, he says.
Ripley says the home shopper of 1996 will want to buy new, but may settle instead for an existing home because new homes are limited in supply. Next year's home shopper also will be more frugal and press for quality, perhaps in the form of brick on the house or in landscaping, Ripley says.
Sellers trying to woo this buyer should heed some timeless advice: ``Get your home in the very best condition you can,'' Ripley says.
Viola says the new-home buyer will want some trendy features. Among them: a master bedroom on the first floor; a study or computer room rather than a living room; high ceilings; more efficient heating and cooling systems; and in the more expensive homes, hardwood floors in even the kitchen and bathrooms.
And Stedfast says home buyers-to-be will need some educating in 1996, if only to teach them that unlike the federal government, homeowners can't run a budget deficit.
Too often home buyers purchase a home with the minimum down and have no savings to fall back on when a crisis occurs, such as when they are furloughed during a government shutdown, she says.
The less money they have saved, the greater their chance of foreclosure, Stedfast says. ``We need to set a trend and get people to save some money.'' In late January, Stedfast's association plans to sponsor a course for first-time home buyers about the rigors of budgeting, saving and home-owning. ILLUSTRATION: REAL ESTATE FORECAST '96
[Cover, Color photo]
MOTOYA NAKAMURA
The Virginian-Pilot
Ronald C. Ripley
President, Tidewater Association of Realtors
Sarah Stedfast
President, Tidewater Mortgage Bankers Association
Abie Viola
President, Tidewater Builders Association
Fred Helm
President, Hampton Roads Realtors Association
by CNB