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Rockingham County and New Home Sales Drive Surge in Area Housing Market |
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 Happy Friday morning, all! November is flying right along... with a rather entertaining overlap of the JMU football and basketball seasons (Go Dukes!)... plus one of my favorite holidays, Thanksgiving! Speaking of JMU Basketball... each month I offer a giveaway for readers of my market report. This month I'm giving away four tickets to the JMU Men's Basketball game on Saturday, December 7 at 4:00 PM. Click here to enter for a chance to win the tickets to cheer on the JMU Dukes! Now, on to the latest in our local housing market. First, some of the overall metrics...  Home sales slowed, a touch, in October 2024 with only 110 home sales as compared to 116 last October... but thus far this year we have seen 1,118 home sales, which is a 6% increase from the 1,050 seen in the same timeframe last year. So... 6% more home sales this year than last... and how about those prices... The median sales price in Harrisonburg and Rockingham County over the first ten months of 2024 has been $345,000 -- which is a 5% increase from the median sales price of $330,000 last year at this time. So... 6% more home sales, and 5% higher prices... how about the speed of those sales... Median days on market continues to (slowly) increase in 2024... which a current median of 7 days, up from 6 days a year ago, and 5 days the prior year. So... small increases in the speed at which home sales go under contract, but 6% more home sales and 5% higher prices. Now, let's take a quick look at only single family detached housing, which excludes townhouses, duplexes and condos...  In contrast to the market-wide 6% increase in the number of homes that are selling, we are only seeing a 2% increase in the number of detached homes that are selling. Also of note, two years ago we had seen 941 detached home sales in Harrisonburg and Rockingham County through the end of October, whereas we are only seeing 751 such sales thus far in 2024. When it comes to prices, we are seeing a stronger (12%) increases in the median sales price of detached homes as compared to the overall market-wide 5% increase in the median sales price. Furthermore, the median sales price of a single family detached home has increased from $327,000 to $390,900 over the past two years. Next up, let's take a peek just at the City of Harrisonburg...  While we are seeing increases in home sales in most portions of the market... and in the overall market... not so much in the City of Harrisonburg. There have only been 231 home sales in the City thus far in 2024 which is a 13% decline from last year, and a 39% decline from the 376 home sales seen in the first ten months of 2022. Meanwhile, in Rockingham County...  Mirroring the 13% decline in City sales in 2024, we are finding a 13% increase in Rockingham County home sales thus far in 2024. One reason we are seeing more of an increase in home sales in the County than in the City is a result of most new home developments currently being built in the County... and not the City. Here's a look at the number of new construction homes selling in recent years...  And as you might imagine... if we're seeing a 28% increase in new home sales in the first ten months of 2024, we probably aren't seeing much of an increase in existing home sales...  Indeed, we are seeing a tiny decline in existing home sales this year (793) compared to last year (796) though both are considerably below the 1,042 existing homes that sold two years ago in the first 10 months of 2022. Rolling over now into some graphs, let's see what else we can learn about our local housing market through the end of October 2024...  For five of the past six months we have seen more home sales this year than last year... the one exception being October. We could also generalize and say that the larger increases in monthly sales (larger little gold arrows) were on the first half of the past six months... while the smaller increases (smaller little gold arrows) were on the second half of the past six months. Looking ahead a bit on the graph above... it seems almost guaranteed that we will see more November home sales this year than last. Last year we saw monthly home sales drop from 116 in October to 72 in November. I don't think we will see that large of a decline this year. When we pile up each month of the year on top of the prior months, here's what we get over the past few years...  Home sales are on the rise this year... increasing from 1,049 to 1,1118 in the first ten months of the year... BUT... that is still a significant drop from the 1,389 home sales seen in the first 10 months of 2022! The biggest difference, as you likely know, is that we were still experiencing super low mortgage interest rates in 2022... which were no longer around in 2023 and 2024. On this next graph I'm trying to generalize the main two shifts I have seen in 2024...  The top line is tracking median sales prices. For several years we saw 10% per year annual increases in the median sales price... up to and including in 2023... but home prices seem to be increasing a bit more slowly in 2024... more in the neighborhood of a 5% increase instead of a 10% increase. The other main change we have seen in 2024 is that home sales are rising again... so as to say that more homes are selling. Through most of 2023 we saw steady declines in the number of homes that were selling, but that trend reversed itself (slowly) in 2024. Zooming out a bit, take a look at the change in home values for detached homes in Harrisonburg and Rockingham County over the past five years...  Indeed... you are reading that correctly... the median sales price of a detached home in Harrisonburg and Rockingham County has increased by $150,000 over the past five years... for a cumulative 62% increase! A few thoughts come to mind... 1. Anyone who has owned the same home for the past 5+ years likely has quite a bit of equity in their home. 2. It is a lot harder (financially) to consider buying a detached home now (median price of $391K) than it was five years ago (median price of $240K). 3. Changes in mortgage interest rates over the past five years haven't helped buyers either -- as the average rate on a 30 year mortgage was 3.75% five years ago, and is 6.78% today. Wowsa! Shifting gears a bit, let's zoom back in to the here and now, to see what recent contract activity might tell us about upcoming months of home sales...  Here (above) is the other reason why I don't think we'll see a decline in November home sales this year like we did last year... there was a drastic difference in October contract activity this year compared to last. The key thing to remember about last October is that it included the final climb to a peak average mortgage interest rate of 7.79%. That steady climb slowed and slowed and slowed down buyer activity last October (and November) as shown by the blue line above. Thus, even though mortgage interest rates are currently in the 6% - 6.75% range, we still saw many more buyers signing contracts to buy homes this October (138) as compared to last October (83). I expect we will continue to see stronger contract activity in November and December of this year compared to the same months last year. Which leads us to "pending sales" -- the number of homes that are under contract at any given time...  The red line (above) tracks how many homes are pending (under contract) per month in Harrisonburg and Rockingham County. As you can see from all the gold arrows, we had been seeing increases in pending sales for most of the months this year... through August, when 2024 fell below 2023... but things have picked back up again significantly in September and October. There are currently 291 homes under contract (pending) in Harrisonburg and Rockingham County as compared to only 234 a year ago at this time. And how about those inventory levels?  Look at the difference in the trajectory of the blue and red lines above. The blue line shows how inventory levels were steadily rising last year between July and October... in contrast to the red line that shows inventory levels mostly decreasing this year between July and October. Now in November, we see far fewer (163) homes for sale than at the same time last year when 230 homes were listed for sale and not yet under contract. A thread that runs through all of these charts are graphs is change in mortgage interest rates over time which is what we'll examine next...  Lots of arrows on this graph -- sorry, not sorry. A year ago we were seeing mortgage interest rates rise as we progressed from August (6.81%) to November (7.79%). We have seen an overall decline in rates over the past year (7.79% to 6.72%) but over the past month we have actually seen them start to increase a bit, rising from 6.08% at the end of September up to 6.72% at the end of October. Mortgage interest rates significantly impact the cost of housing and have played an oversized role in the the housing market (locally and beyond) over the past few years due to how quickly they have increased. So, if you've made it thus far, thanks for reading and for educating yourself on the state of our local housing market. The general, recent, local, trends I am seeing in our local market include:
If you will be buying or selling a home in the next three to six months, we should talk sooner rather than later about your hopes, goals, dreams and the best timing for your big move. Even if you don't know if you really will buy... or if you really will sell... I'm still happy to connect with you just the same to discuss your possible purchase/sale, to discuss the market, or to discuss life in general. Feel free to reach out anytime with questions or to set up a time to meet. You can contact me most easily by phone/text at 540-578-0102 or by email here. Until we chat next, I hope you have a wonderful Thanksgiving celebration and are able to enjoy bountiful, relaxing, refreshing and fulfilling time with your family, friends and other special people in your life. If you're running in the Rocktown Turkey Trot, I'll see you on Thanksgiving morning in downtown Harrisonburg! :-) Gobble, Gobble! Recent Articles:
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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Commonwealth of Virginia
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