Looking back at sales in recent months we find that....

Sales during 4 out of the last 5 months exceeded sales in the same month from the prior year, with January 2015 being even with January 2014.

The current month, however, has thus far not been as exciting. We'll need to see quite a few more sales recorded in the MLS over the next few days (that closed in February) in order to come up on par with last February.

Stay tuned for my monthly market report, or feel free to catch up by reviewing last months' market report.

 

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Yesterday I ran an analysis on single family home values -- which suggested that home buyers from 2006 may have to wait until 2020 to see their home value return to the original purchase price.

Today, we're answering a similar question for townhouses....

So, let's say one bought a townhouse in 2008or any of the other "red" years above. What's the thought on a reasonable expectation for a townhouse to at least recover the value to the purchase price (and then, of course, hopefully, higher)?

OK, so, first of all -- the values in the middle (red and green) column above are showing the potential current value of your townhouse depending on when in the past 15 years you purchased the home.  Basically, those folks who purchased before (2000-2005) the real estate boom have higher home values now than when they purchased their townhouse -- and people who bought between 2006 and 2010 have a lower home value today.  Townhouse buyers in recent years (2011-2013) are doing just fine.

So, back to the question at hand -- how long it will take townhouses to return to the value that they had when they were purchased.  As shown above in the right (grey and yellow) column, we can sort of guess as what that time frame will look like if we assume that home values will increase 3% per year over the next five (etc.) years.  This analysis shows that....

• Buyers from 2000 - 2005 as well as 2011 - 2013 are good to go -- their home values are likely already higher than they were when they purchased their townhouses.
  
  
• Buyers from 2010 are likely to see a return to their original home value in 2015.
   
• Buyers from 2006 are likely to see a return to their original home value in 2016.
   
  
• Buyers from 2007 - 2009 are likely to see a return to their original home value somewhere between 2017 and 2018.  See the chart for details.

And, as usual, a few disclaimers....

• The data above is analyzing changes in the median sales price of all townhouses - thus, your townhouse's value is likely to follow these general trends, but this is not an absolute guide.
   
• Certainly, if we don't see 3% per-year increases in the median values of townhouses over the next five (etc.) years, then this analysis will not be accurate.

Hopefully this is a helpful look at the implications of shifting market values over time.  If you have a question about the value of your townhouses, please let me know.  I'd be happy to meet with you to give you some specific feedback pertinent to your home -- as compared to the generalities referenced above.

And, for the data lovers out there, feel free to peruse lots of market indicators and graphs at HarrisonburgHousingMarket.com.

   

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OK, my apologies in advance for the slightly depressing nature of this blog post.  This is the third in a series of three -- and I'm only going here because someone (Brad!?!) asked the question, so I thought I'd run the analysis to shed some light on his inquiry.

Brad's question....

So, let's say one bought a house in 2009 (hypothetically, of course, right?!)... Or any of the other "red" years above. What's the thought on a reasonable expectation for a house to at least recover the value to the purchase price (and then, of course, hopefully, higher)? Not that you have a crystal ball, but in general?

OK, so, first of all -- the values in the middle (red and green) column above are showing the potential current value of your home depending on when in the past 15 years you purchased the home.  Basically, those folks who purchased before (2000-2004) the real estate boom have higher home values now than when they purchased their home -- and most people who bought since then do not have a higher home value today.  That is because after single family home values peaked in 2006, they have been slowly (slowly!!) drifting downward since that time.  (details here)

So, back to Brad, he is wondering how long it will take homes to return to the value that they had when they were purchased.  As shown above in the right (grey and yellow) column, we can sort of guess as what that time frame will look like if we assume that home values will increase 3% per year over the next five (etc.) years.  Working our ways sort of backwards, this analysis shows that....

• Buyers from 2011 are good to go -- their home values are likely already higher than they were when they purchased their home.
  
  
• Buyers from 2012 and 2013 are likely to see a return to their original home value in 2015.
   
• Buyers from 2009 and 2010 are likely to see a return to their original home value in 2016.
   
  
• Buyers from 2005 - 2008 are likely to see a return to their original home value somewhere between 2017 and 2020.  See the chart for details.
  

And, as usual, a few disclaimers....

• The data above is analyzing changes in the median sales price of single family homes - thus, your house's value is likely to follow these general trends, but this is not an absolute guide.
   
• Certainly, if we don't see 3% per-year increases in the median values of single family homes over the next five (etc.) years, then this analysis will not be accurate.

And.... before you get totally depressed, realize that this does not (necessarily) mean that almost every home buyers since 2005 should be crying since they wouldn't be able to sell their homes because of a decline in its value.  Here's why....

• Plenty of people put down a small (or large) down payment when purchasing.  This, thus, gives them the flexibility to be able to sell in the future even if their home value has shifted downwards a bit.
   
  
• When you pay your mortgage each month, you are reducing the principal balance, again, giving you further flexibility to sell in the future even if your home value has shifted downwards a bit.
   
• Fluctuations in market value over time are cancelled out (in some ways) if you are selling and buying at the same time.  Sad that your used-to-be-$300K home is selling for $280K?  Don't be.  You're buying a used-to-be-$350K home for $325K.

OK, enough for now.  Hopefully this is a helpful look at the implications of shifting market values over time.  If you have a question about the value of your home, please let me know.  I'd be happy to meet with you to give you some specific feedback pertinent to your home -- as compared to the generalities referenced above.

And, for the data lovers out there, feel free to peruse lots of market indicators and graphs at HarrisonburgHousingMarket.com.

P.S.  Don't like the harsh realities presented herein?  Complain to Brad.  :) 

 

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As a continuation of yesterday's analysis, it is worth pointing out that townhouse buyers over the past three years (2011-2013) should be quite pleased with their purchase.  Their townhouse is likely to be worth 6% - 13% more than when they bought it -- based on overall increases we have seen in the median sales price of attached dwellings over the past several years.

As noted yesterday, the chart above is calculated based on comparing the median sales price in 2014 to the median sales price in each of the prior 14 years.

Of course, your townhouse may have performed (from a value perspective) differently than this chart would suggest.  These calculations are based on median sales prices during the given time periods.
  

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The chart above is calculated based on comparing the median sales price in 2014 to the median sales price in each of the prior 14 years.

Several key points to take away from this chart....

• For many, many home owners, this chart may have very little pertinence to the value of your home.  These calculations are based on median sales prices, and your home (and/or neighborhood) may have performed VERY differently during any of these time periods.
   
  
• If you bought your house between 2006 and 2008, it's still not necessarily an exciting time to sell -- though hopefully that is not news to anyone.
   
  
• Home values are still (barely, slightly) declining (year-over-year), so despite today's buyers getting great deals on their houses, they still need to plan to be in them for at least five years to be sure to see gains in their home value.
      
• If you bought in 2004 or prior, you should do just fine if you are selling today.

But again, the most important point is that while this might provide a general guide to what has happened with home values over the last decade (+), every home and neighborhood is unique.  Let's chat about your specific house if you want to know what it is worth in today's market.
  

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The Harrisonburg-Rockingham Metropolitan Planning Organization (HRMPO) is studying potential interchange modifications on Interstate 81 at Exit 245 (State Route 253/Port Republic Road) and Exit 247 (U.S. Route 33/East Market Street).

Read all about the potential changes and access fun maps like that above (and below) at this link....

I-81 Exits 245 & 247 Interchange Alternatives Analysis Study

Here is one proposal for a reconstructed Exit 245....



 

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It is (ridiculously) cold out there!  Here are some quick tips from Harrisonburg's Public Utilities Department....

Ways to Prevent Pipes from Freezing:

• Keep garage doors closed if there are water supply lines in the garage.
• Open kitchen and bathroom cabinet doors to allow warmer air to circulate around the plumbing.
• When the weather is very cold outside, let the cold water drip from the faucet served by exposed pipes. Running water through the pipe, even at a trickle, helps prevent pipes from freezing.
• If you will be going away during cold weather, leave the heat on in your home, set to a temperature no lower than 55 degrees.
• Remove, drain, and store hoses used outdoors. Close inside valves supplying outdoor hose bibs. Open the outside hose bibs to allow water to drain.
• Check around the home for other areas where water supply lines are located in unheated areas. Look in the basement, crawl space, attic, garage, and under the kitchen and bathroom cabinets.
• Consider installing specific products made to insulate water pipes like a pipe sleeve or installing UL-listed heat tape, heat cable, or similar materials on exposed water pipes.

To Thaw Frozen Pipes:

• If you turn on a faucet and only a trickle comes out, suspect a frozen pipe. Places likely for frozen pipes include against exterior walls or where your water service enters your home through the foundation.
• Keep the faucet open. As you treat the frozen pipe and the frozen area begins to melt, water will begin to flow through the frozen area. Running water through the pipe will help melt ice in the pipe.
• Apply heat to the section of pipe using an electric heating pad wrapped around the pipe, an electric hair dryer, a portable space heater (kept away from flammable materials), or by wrapping pipes with towels soaked in hot water. Do not use a blowtorch, kerosene or propane heater, charcoal stove, or other open flame device.
• Apply heat until full water pressure is restored. If you are unable to locate the frozen area, if the frozen area is not accessible, or if you can not thaw the pipe, call a licensed plumber.

To learn more tips from the City of Harrisonburg on ways to protect yourself and your home during the cold winter months, visit www.HarrisonburgVA.gov/winter-safety.
  

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Emily and I went to see Paddington yesterday - quite a fun movie.  Mr. Brown wisely calls his hazard insurance company to make sure that his policy will provide coverage for any damage caused by his overnight guest, Paddington.  It is not entirely clear whether he is successful in adding "talking-bear-as-an-overnight-guest" coverage to his policy before Paddington sleds down the spiral staircase in the bathtub.  :)

So, if Paddington is staying at your house overnight, please call your insurance company first - and then call me - Emily and I would like to stop by to say hello.

While you're waiting for Paddington to arrive (perhaps eating a marmalade sandwich?) here are some answers to a few common questions about homeowners insurance (hazard insurance)....

My lender's Good Faith Estimate includes a price for hazard insurance - will I be obtaining insurance from my mortgage company?

• No.  The Good Faith Estimate includes all of the closing costs related to your home purchase.  Some of those fees are paid to your mortgage company, but many are not.  You will be able to decide which insurance company you want to work with for your homeowners insurance policy.

Why do I have to pay for an entire year of homeowners insurance at closing when I purchase my home?

• Insurance companies require that your homeowners insurance premiums be paid a year at a time, in full, in advance of that year of coverage.  Thus, one of your closing costs will be to pay for a full year of homeowners insurance coverage.

OK, but then, why does my Good Faith Estimate indicate I'm paying for another three months of insurance even beyond the first year's premium??

• About 10 or 11 months after you purchase your home, your mortgage company will need to send a full year's payment of your homeowners insurance premiums to your insurance company to pay (in full, in advance) for the second year of homeowners insurance coverage for your house.  Since your mortgage company will be collecting 1/12th of the annual cost of insurance from you each month as a part of your mortgage payment, they also need to fund your escrow account with a few months of the insurance costs at closing so that they will have enough funds to pay for a full year of insurance after 10 or 11 months when that payment comes dues.

What happens to all of this money I'm paying in advance when I sell my house?

• The escrow account that your lender sets up for you will always have quite a bit of your money in it - to allow your lender to pay the insurance premiums and property taxes on your behalf.  When you sell your house, any excess funds remaining in your escrow account will be returned to you after closing.

Why does my lender escrow funds for taxes and insurance, anyhow?

• Your lender has a vested interest in making sure you are paying your property taxes and homeowners insurance -- they often are on the hook for 50%, 70%, 80%, 90% or even more of your home value.  As such, they require you to pay 1/12th of the insurance and property tax costs to them (the lender) each month so that they can ensure that the payments are made to your locality (taxes) and your insurance company.
  

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This snowfall has nothing on last year's bitter, winter cold temperatures -- at least as far as home sales go.  As noted above, there were significantly fewer contracts signed between the first 45 days of the year in 2014 (86 contracts) as compared to the previous year (101 contracts) and as compared to this year (122 contracts).
 

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Average interest rates edged up last week (from 3.59% to 3.69%) but from a historical perspective, they are still ridiculously low....



Thus, the opportunity persists to lock in your housing costs at very, very low levels.  Looking for a referral for a great local lender?  Email me at scott@HarrisonburgHousingToday.com for several recommendations.
  

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Inventory levels are down 2.3% over this time last year.

There are currently 671 active and under contract listings in Harrisonburg and Rockingham County.  Let's take a closer look at the details of those homes for sale....



Search for New Listings in Harrisonburg and Rockingham County.

Or, browse houses with recent price reductions.
   

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Click here to pre-order this fantastic print created by Back The Burg, a company that was created "to bring all past and present residents of Harrisonburg unique products that build community pride and support our historic downtown."  All Back The Burg profits are donated to the Harrisonburg Downtown Renaissance.

Here is a description, from the artists, of this first product from Back The Burg....

"Sweet Harrisonburg" was our first product concept and we are so excited to share it with you! We wanted to create a screen print that embodied the Harrisonburg culture and was worthy to hang in any Harrisonburg lover's home. We brought on Matt and Jeff, two local designers, to put their skills to work on this idea and their concept came together very nicely. There are so many things that make Harrisonburg special and this print brings just about every one of those together.  This one-of-a-kind print is a two-color screen printed piece of art inked on a piece of 12″ X 18″ heavy construction paper. We only have a limited supply, so get yours before we run out!

Click here to pre-order your print today!
 

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Are you curious about the housing trends of yesteryear?

Explore my monthly market reports back through 2009 via DropBox....

Click here to access my archive of Monthly Market Reports on the Harrisonburg and Rockingham County Real Estate Market.
   

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For most of the last three years, the 12-month median sales price has been floating between $173K and $176K.  Over the past six months it has started to slowly rise.....

Finally -- it has hit $180,000.

Read quite a bit more about our local market in my entire February 2015 real estate market report online, or by downloading the PDF.
  

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Before we get to my monthly report the Harrisonburg and Rockingham County real estate market, I encourage you to check out WalkThroughThisHome.com - which highlights the fantastic new technology I am now using to market properties in this area.

OK, now, back to the housing market report.  As usual, you can jump to the full online market report, or download the PDF, or read on for highlights....



As shown above, home sales declined 10% in January 2015 as compared to last January, though the 47 home sales seen in Harrisonburg and Rockingham County during January 2015 was the same number we saw in January 2013 -- and more than in January 2012. 

The slightly slower start in January was accompanied by HUGE increases in the median and average sales price in January 2015 - which is exciting....until we look back at January 2013 and it becomes clear that the January 2014 median and average sales price figures were abnormally low. 



As shown above, the 47 home sales we saw in January 2015 fit in well with previous January sales trends.  We are likely to see 50 to 60 sales in February and March before things really start to take off in April.



As shown above, inventory levels have fallen over the past year -- so early sellers (listing now or soon) may still have the benefit of exposing their property to the current pool of buyers when those buyers do not have many other options of homes to purchase.  Inventory levels will likely stay relative low for the next 30 to 60 days.



As usual, quite a few (37%) homes that sell are doing so in 90 days or less.  This, again, emphasizes the importance of pricing your home appropriately for the market, preparing it well to sell, and marketing it thoroughly and professionally.

If you are buying or selling now, or will be soon, I encourage you to become a student of the housing market.  Learn what has been happening recently, what is happening now, and what is likely to happen next.  Being informed will allow you to make better real estate decisions.  You can continue your studies by reading the entire February 2015 market report online, or by downloading the PDF.

Also, as always, if you're interested in talking to me about buying a home in Harrisonburg or Rockingham County.....or if you are interested in selling your current home.....just drop me a line by email (scott@HarrisonburgHousingToday.com) or call me at 540-578-0102.
 

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If you are considering the purchase of a townhouse in Harrisonburg or Rockingham County, you'll likely want to know about all of the townhouse communities that might be of interest, as well as knowing recent sales prices in those communities, current availability, etc.

Find all of that information, and more, at HarrisonburgTownhouses.com.
  

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   click here (PDF) to learn more about the EXPLORE MORE Community Education Center

Explore More Discovery Museum moved to its current location in downtown Harrisonburg in 2010. Expansion has always been part of the long-term plan and vision. With two upper floors available and ready for build-out, the time has come to start the climb.

The future 2nd floor Arts & Innovation area will offer eight new, interactive exhibit galleries! Climb in the quarry, fly the airplane, create movies, music and art! With a successful campaign, our kids will finally be able to enjoy their tree house... yes, it's time to climb!!

The 3rd Floor Community Education Center will provide greatly needed multi-purpose space for educational programs and special events. Two new classrooms and a kitchen facility will offer unique opportunities to expand enrichment offerings.

A generous donor has offered to match all contributions up to $250,000 if received by February 14, 2015. Show how much you love your community museum and consider a contribution today by clicking here.
  

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Significantly less of this house would be visible after the leaves come out.

If you're thinking of selling this Spring or Summer, and you have trees (especially large house-obscuring trees) we should discuss taking some exterior photos NOW rather than waiting until later when we can't see your house at all.
 

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   (don't worry -- this is not really one of my client's homes)

Preparing your home to go on the market can be challenging (and tiring), and often sellers-to-be need a second (or third) set of eyes to provide suggestions about where to focus their time and energy.  There are many different theories about how to best prepare your home to be on the market and viewed by buyers --- and ways of expressing those theories. 

• take a minimalistic approach, removing absolutely every knick knack in sight
• removing all family photos
• de-cluttering and get rid of extra "stuff"
• remove furniture to create an open feel
• stage the home with place settings on the dining table, and more
• always have fresh flowers in the home

There are countless other theories, ideas or suggestions -- all of which can be helpful to consider as you are preparing to put your house on the market.  Another perspective that I'd throw out there for your consideration is eliminating distractions and objections.

Distractions are the things that keep a prospective buyer from focusing on your house.  That might be knick knacks, or family photos, or refrigerator magnets, or an overflowing pantry, or fascinating artwork, or an abundance of indoor plants, or a strange odor, or brightly colored wall hangings.  Whatever it is --- if a buyer is focusing on one (or more) of these items, they're not focusing on your house.  They're reading all of the Far Side comics on the fridge instead of marveling at the granite countertops, tile backsplash, recessed lighting, and stainless steel appliances.  They're amazed at how you fit 234 board games into the coat closet instead of taking in the quality workmanship of the trim detail in the foyer, and the mountain views out the picture window in the family room.  As you prepare your home to go on the market, close your eyes for a few moments when standing at the entrance to each main living area.  Then, open your eyes, and take note of where your eyes are immediately drawn.  Or, walk slowly through the space (or ask a friend to help) seeing where your eyes (and your mind) linger.

Objections are those correctable physical characteristics of your home that give a buyer a reason to mark your home off their list, or to move it down a notch in their preferences.  Perhaps it is that the vinyl siding needs to be power washed, or that three bi-fold closet doors need to be adjusted, or that there is poor lighting in the kitchen, or that the deck needs staining.  There are oftentimes small home maintenance items that should be attended to before putting your home on the market.  There are two potential dangers of having these items unresolved --- first, a buyer might become too overwhelmed by the work that they need to do to the home once they move in, and second, a buyer might extrapolate from what they can see to imagine what they cannot.  A classic example of this is the dirty furnace filter that makes a buyer assume that the HVAC system has never been serviced, is in a terrible state of disrepair, and will need to be replaced immediately. 

As you're preparing your house to go on the market, I'm happy to provide you with another set of eyes and to give you some new perspectives on how to best prepare your home to be shown to buyers.  When you're ready, just give me a call (540-578-0102) or send me an e-mail (scott@HarrisonburgHousingToday.com).  Also, don't fret about having your home in perfect "show condition" before you call me --- I'm happy to give you some guidance and feedback while you're still in the process of preparing your home to go on the market.
 

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How did buyer activity and seller activity compare in January 2015?

• 73 buyers signed contracts to buy homes
• 97 sellers signed listing agreements to list their homes

And focusing in on those buyers, what exactly did they buy last month?

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