Home prices skyrocketed in the Virginia Beach area from 2002 through 2006, according to Vinod Agarwal, an economics professor at Old Dominion University. And, there was a spike in the use of exotic mortgage products among area homebuyers.
"Even active-duty servicemen and discharging veterans with access to government financing were using non-traditional loans," he said.
The result was an increase in defaults that mirrored bubble markets in California, Florida, Arizona and Nevada. But the trend came later and were less severe than in the Sand States, Agarwal said. In fact, home prices never rose as high as in bubble cities -- the median never got much past $250,000 -- and have not fallen as fast.
The area generally does lag the nation as a whole, insulated a bit by its heavy reliance on the armed services facilities. The unemployment rate deteriorated a bit during 2010, going to a still reasonable 7.2% from 6.8%, but Agarwal said that's turning around. He expects the metro area to record a net gain of about 10,000 jobs in 2011.
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