Much has changed in our local real estate market over the past threeyears, and yet, much has not changed at all.  Let's examine today'smarket from the context of just three years ago.  Back in November2006, my column in the Shenandoah Valley Business Journal includedthese excerpts:


In today's market we find that nearly everyarea of the Shenandoah Valley, in every price range, is experiencing abuyer's market.  The supply of homes far exceeds the demand, providingbuyers with plenty of choices and negotiating ability when purchasing ahome.


Today'srates are as low as 4.75%, with most buyer's rates hovering around 5%depending on their loan program and credit scores.  It is indeedremarkable that the low interest rates from just three years ago arenow more than 1.5% lower today.


Inmost cases, houses are now staying on the market even longer than theywere three years ago, providing even more choices for buyers.  Thissupply has not yet shown signs of declining, though the sales pace maybe solidifying after several years of declining numbers of home sales.


Thisstatement was in the context of sellers being willing to pay closingcosts, or to offer other incentives.  There certainly wouldn't havebeen too many people, three years ago, who would have imagined that thefederal government would be offering an $8,000 tax credit to first timebuyers, and a $6,500 tax credit to long term owners of principalresidences.  This statement from the past is true yet again, but in anew context – buyers have yet more unprecedented assistance in today'smarket!


Three years later, we aren't yetseeing higher prices, or higher interest rates, or fewer choices, orfewer buyer incentives.  Thus, there are still great opportunities forbuyers in today's local real estate market --- but with one significantcaveat.  Over the past three years, prices haven't fallen, which iswonderful, but they also haven't increased.  Today's buyers, therefore,should only consider a purchase if they will stay in their home forthree or more (or five or more) years.  The days of recent past when abuyer could sell a year later for a profit are certainly no longer areality.

As always, in real estate, context is of utmost importance. Over the past three years, median home prices in Harrisonburg andRockingham have fallen by 1.5%.  In a vacuum, this isn't overlyexciting or depressing.  Consider that most other areas in the countryhave seen value declines of 20% in the same time period, and it's a bitmore exciting.  Consider that our local home values increased by 51% inthe preceding three years (2003-2006), and it's even more exciting!

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Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com