1. The other home was, indeed, just "a few streets over" but that also put it on the edge of the neighborhood, on a busy road, with a front yard that parents wouldn't let their children plan in for fear of them running into the road where cars often travel past at 45 miles an hour. 
    
   
2. The other home was, indeed, larger -- but the entire house needed to be updated, as it had wallpaper, a dated kitchen, dated flooring, etc.
     
   
3. The other home had a basement one-car garage instead of a main level two-car garage. 
   

Furthermore, aside from all of these differences in the two houses --- the other ($300K) house is not available any longer --- and there aren't three other houses just like it that the buyer can decide to buy. 

In this case, by focusing on this one not-actually-that-similar sale, the buyer has put themselves in a situation where they might miss out on purchasing a great home because of how they are viewing the market based on one comparable sale.

THE SELLER'S STATED PERSPECTIVE

I am confident that I can sell my house for $250K.  After all, my friend owned a very similar house and he just sold it in a week, with multiple offers, for $260K!

THE LARGER CONTEXT

Just a few items...

1. Your friend's house was in a highly desirable neighborhood within walking distance to downtown Harrisonburg -- while your home is on a busy road and has train tracks directly behind it.
    
   
2. Three homes nearly identical to your home, on your street, even facing the same direction as your home, built within two years of your home, updated at the same time as your home, sold in the past three months for $220K, $225K and $230K.
    
3. You have lived a busy life over the past few years, with work, family, and other commitments and you haven't had a chance to tackle the many small maintenance and upkeep items that a home often requires.  Your friend is a retired general contractor and has spent all of his free time over the past two years fixing, replacing, and improving countless aspects of his home's interior, exterior and grounds. 
   

Again, by focusing on this one not-actually-that-similar sale, the seller has put themselves in a situation where they might miss out on selling their home because of how they are viewing the market based on one comparable sale.

So -- as a buyer or as a seller -- don't focus on just one comparable sale when deciding on a reasonable price to pay or to ask -- look for the larger context!

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• "Bluestone is meant to alleviate overcrowding within the division, especially at Skyline and Thomas Harrison middle schools."
   
  
• "Once the school opens in fall 2017, Kizner said that fifth-graders will no longer attend the middle schools and will instead continue attending their respective elementary schools."
   
  
• "The $25.9 million facility will sit on 10.8 acres across the street from Harrisonburg High School and adjacent to Heritage Oaks Golf Course. It will be 112,000-square-feet and consist of three floors."
  

• Harrisonburg High School is filled beyond capacity.
• The school-aged population in the City of Harrisonburg is continuing to grow.
• The high school needs to be expanded or a new high school built.
• Any such expansion or new build will be very expensive.
• This large expense is likely to be paid for primarily via an increase in real estate taxes.
  

• The owner of a $150K property paying $22 more per month.
• The owner of a $250K property paying $36 more per month.
• The owner of a $350K property paying $51 more per month.
• The owner of a $500K property paying $73 more per month.

So -- yes -- this would be a drastic increase (20.5%) one-year increase in the real estate tax rate.  But when broken down to the actual increased cost per month, it does not seem quite as overwhelming.

Further reading from the Daily News Record:

• 5/18: Second High School Option Gets Pushback
  
• 5/17: Board Gets Estimate On New School
• 5/15: School Board To Get New Building Cost

1. Home sales declined (slightly) in April to 98 home sales, as compared to 101 a year ago.  This is not a huge deal, as our year-to-date sales figures still show that we're 2.49% ahead of where we were a year ago.  But, still, a slightly slower month of sales in April.  Perhaps dues to lower inventory levels?  More on that later.
    
2. Median prices are down about 5.24% thus far in 2017 -- but with only four months of data, that is likely related to what actually sold, as opposed to home values declining.  The median sales price over the past year ($190K) is still 2.15% higher than it was ($186K) during the previous 12 months.
    
3. Homes are selling fast (fast, fast, super fast) this year - with a median "days on market" of 54 days, as compared to 73 days during the same timeframe last year.

Now, let's take a closer look at how these sales are coming together, via contract activity....

As shown above -- April 2017 was another active month of buying activity -- following closely after March's 140 contracts with 137 in April.  Again, though, this does not quite stack up against the 158 contracts signed last April.  The next few months could be even stronger (see 2015) or even slower (see 2016) -- and some of that may relate to how many choices buyers have from an inventory perspective.

OK -- inventory, inventory, inventory -- let's get down to it....

As shown above, today's buyers have significantly fewer homes to choose from -- with a 29% decline in the number of homes for sale in Harrisonburg and Rockingham County.  That said, it gets even more striking in some price ranges....

• $200K - $300K = 24% decline in homes for sale
• Under $200K = 51% decline in homes for sale

That last one is shocking, and perhaps problematic -- our most active price range (average of 60 sales per month) has seen a significant drop in the number of home available to buyers.  One year ago, these buyers could have selected from 256 homes -- today, only 125!

OK -- there is a pile of additional information bout our local housing market in my monthly market report.  If you are interested in more, feel free to  download the entire thing as a PDF, or read it online. 

And, my reminders for buyers and sellers last month still apply....

SELLERS -- even though it is somewhat of a seller's market in many price ranges right now, you must still focus on price, condition and marketing.

For further reading on buying or selling in this area, check out....

• BuyingAHomeInHarrisonburg.com


• SellingAHomeInHarrisonburg.com

• The proposed mixed use building would have (22) one-bedroom apartments and commercial space - potentially a fast food restaurant.
   
  
• The properties would need to be rezoned from R-1 (Single Family Residential) and R-3 (Medium Density Residential) to R-5C (High Density Residential District Conditional) in order for this project to be constructed.
   
• The developer also needs to be approved for a special use permit for an apartment building with more than 12 units, and a special use permit to allow for the commercial use.
   
• If approved, the developer would raze (tear down) four existing buildings in order to build the mixed-use building.
   
  
• City staff does not think that low density residential uses facing South Main Street (a five-lane roadway with a 35 mph speed limit) are likely or practical.
   
• City staff is recommending approval of the requests for amending the Comprehensive Plan, rezoning the properties and issuing the special use permits.
  

The bottom line here seems to be that the property (properties) in question have high traffic count road frontage, yet also adjoin a low density residential neighborhood in the back.  Should the use of these properties continue to be low/medium density residential use as currently approved?  Or should the City allow the property owner to rezone them to allow for a much denser use of the land?

You can read the entire packet of information to be reviewed and considered by the Planning Commission here.

1. If you're looking for a 4500 SF home, built in the past five years, on an acre, with five bedrooms and upscale features -- you're going to care whether the average size of the ten closest homes is 4500 SF or 1500 SF.
    
   
2. A restored circa 1900 home in Old Town Harrisonburg is going to be more sought after than the identical home in downtown Elkton.
    
3. A new, low maintenance, one-level home home might be perfect for a retiree if it is within a neighborhood of similar homes -- and less so if it is directly on a busy road and surrounded by commercial uses.
    
4. My wife's parents and sister both live in our neighborhood, and  both of my sisters and my dad are within a short drive.  Thus, our home is perfectly situated for the family relationships that we value -- and we wouldn't really ever consider moving across town.

So, as we consider houses you might purchase -- let's think about what location, setting or context will be the most meaningful and desirable for you, both in the short and long term.

P.S.  The home pictured above, on a large, private lot, is somehow still just moments from Sentara RMH Medical Center and everything Harrisonburg has to offer.  This property will be hitting the market this week!

Purchase Price:  $150,000
Down Payment:  20%  ($30,000)
Interest Rate on 30 year Mortgage:  4.5%
Monthly Payment:  $740 (principal, interest, taxes, insurance)

Rental Income:  $1050
Property Management:  -$105
Association Dues:  -$50
Mortgage Payment: -$740
Net Cash Flow: +$155

• $150K purchase price
  
• Assumption of 2% per year appreciation
  
• 80% financed at 4.5% over 30 years
  
• $1,050/month rental income with half a month of vacancy per year
  
• $500/year in repairs
  
• $50/month in association dues
  
• 10% management fees
  

In the first year, this investment would potentially result in....

• Positive Cash flow of $818 (benefit seen immediately)
• Tenants paying down the mortgage by $1936 (benefit seen later)
• Tax savings of $747 assuming 25% tax bracket (benefit seen annually)
• Appreciation of $3000
• Thus, a benefit of $6,501 in year one.

Over the first five years, this would potentially result in....

• Positive Cash flow of $6,600 (benefit seen immediately)
  
• Tenants paying down the mortgage by $10,610 (benefit seen later)
  
• Tax savings of $2,875 assuming 25% tax bracket (benefit seen annually)
  
• Appreciation of $15,612
  
• Thus, a benefit of $35,698 over the first five years
  

Let me know if you have questions about any or all of this, as each investor and investment scenario will look a bit different.  All that said, I believe there is a reasonable opportunity for a solid return when buying an investment property in Harrisonburg -- and I'd be happy to help you with that process if you are interested.