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The mid sized homes that ARE being built |
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 Last week I spent some time discussing the market need that I perceive for mid sized detached homes in or near the City of Harrisonburg. I went further, to suggest that these might be 1750 - 2150 SF homes for less than $300K. Thinking further about it over the weekend, I think it is important to note that there are actually SOME homes being built that meet these criteria. Below are the three homes that sold with these specs thus far in 2017....  1240 Cottage Lane (just outside Harrisonburg) 3 BR / 2.5 BA / 2336 SF / $275,230  246 Dylan Circle (Bridgewater) 4 BR / 2.5 BA / 1818 SF / $247,000 [no photo available] 395 Acme Company Street (Broadway) 3 BR / 2.5 BA / 2257 SF / $277,000 And if we relax the criteria a bit, down to 1600 SF, we pick up a few more....  365 Coyote Run (Broadway) 3 BR / 2 BA / 1600 SF / $$222,500  2587 Calico Drive (Broadway) 3 BR / 2.5 BA / 1639 SF / 5 Acres / $249,100  190 Grouse Drive (Massanutten) 3 BR / 2 BA / 1700 SF / $287,500 So, clearly, none in Harrisonburg proper, and most quite a ways from Harrisonburg -- and most importantly, VERY FEW homes at all that are being built and sold in this price range (under $300K) with these specs (1600+ or 1750+ SF). Switching, then, to what is currently available -- we find three options under $300K with 1750+ SF for buyers currently in the market....  265 Dylan Circle (Bridgewater) 4 BR / 2.5 BA / 1808 SF / $246,900  4150 Tanners Court (just outside Harrisonburg) 3 BR / 2 BA / 1830 SF / $279,900  1250 Cottage Lane (just outside Harrisonburg) 4 BR / 2.5 BA / 2266 SF / $299,400 So, indeed, extremely limited options for new homes under $300K with 1750+ square feet in or near Harrisonburg. This brings me back to my same conclusions as I mentioned last week, and I'll mention again here....
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Can New Homes Be Built That Buyers Will Want and Can Afford? |
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 OK -- lots of great thoughts from folks over on Facebook yesterday, and in person as I talked to people around town yesterday, after I suggested that our market needs lots of mid size detached homes to be built. I'm going to think aloud about all of that by capturing a bit of that conversation here.... --- WHAT TYPES OF HOUSES? I had suggested that homes along these lines were needed for current townhouse owners that want to buy their first detached home....
These types of homes have not been built in large quantity over the past ten years, and I believe there are plenty of buyers who would love to buy this type/size of home. --- COSTS ARE HIGH BEFORE THE ACTUAL CONSTRUCTIONAs Jim, Jerry and Keith pointed out, It is expensive (!!!) to create a developed lot. The cost of building roads, installing water an sewer lines, utility hook up fees, etc. all add up to make the costs quite high even before construction (pouring the foundation, framing the home) begins. And as Nate points out -- if the land cannot be purchased by a builder at an affordable price, the rest of the equation downstream won't work out. High costs for land, plus development costs, plus building costs, will result in unrealistically high prices for homes, that then won't be affordable (or desirable at that price point) to buyers. Nate then ponders whether larger, regional builders can do better than local builders in this regard based on economies of scale. I'm not sure if the savings would be in buying a larger tract of land, lower development (infrastructure costs), or lower building costs -- but I wonder the same. Gary and Renee also point out that some of these "costs before you even start building" are high because of utility connection fees, requirements for stormwater management, proffers, etc., that are coming from government regulations and development requirements. Ginny points out that the final cost of a house is largely dependent on the initial land and development costs. Thus, to have smaller single family homes built, we may need to see smaller lots, to keep those initial costs down. --- DEMAND NEEDS TO DISCUSSED WITHIN THE CONTEXT OF PRICE As Jim succinctly puts it, "If I want something I can't afford then it isn't really demand." An excellent point -- which means that we need to think about (and talk about) the demand for the homes I outlined above (for example) within the context of the price for bringing such a home to market. If the houses I described (1750 / 1950 / 2150 square feet) were able to be sold for $150K, $175K and $200K (obviously not realistic) then clearly, there would be a ridiculously high demand for them. I believe that if the houses I described could be sold for $250K, $275K and $300K there would still be a strong demand for them. But, clearly, if the homes could not be sold for any less than (I'm exaggerating again) $400K, $425K and $450K then likely NOBODY would want want to buy them. So, yes, when we talk about demand for a particular type of housing, it likely should be -- as best as possible -- set within a context of price. That price-based demand can then be compared to development and building costs to see if developer and builders can bring such a product to market at a price that it will sell. --- WHAT SHOULD WE BE ADDING TO OUR HOUSING STOCK? As Jim also points out, the high demand and low supply environment we're in right now COULD cause a large quantity of under-qualified builders to start building homes. This doesn't help, in the long-term, as it is adding lower quality homes to our housing stock, which I do not believe helps our community in the long-term. Jim goes on to suggest that we should be ensuring that we are adding quality homes to our housing stock. I agree -- though I do think that we need to find a balance. If the quality of materials and finishes is too high, we're pricing ourselves out of the ability to meet the demand we're discussing. Michael takes us in a different direction when considering what should be built. He points out that even beyond building for all of those townhouse buyers (the original reason for my suggestion that we need to build mid sized detached homes) that he believes there is also a significant demand for affordable housing for the elderly in our community. He points out that retirement communities are not affordable for everyone, and plenty of older adults in our community would love to move into an affordable, (one-level), wheelchair accessible home. Again -- another market segment where we are not seeing much new construction. --- WHAT ARE PEOPLE GOING TO DO IF WE DON'T BUILD THESE HOMES? Ginny suggests that homeownership may be delayed for some families. A good point -- if the homes they want aren't available at the prices they can afford, perhaps they'll keep renting or keep living in the townhome they purchased. Ginny also suggests that we'll see more remodeling or upgrading of current homes to accommodate growing families, which also makes sense. Keith suggests that people will just have to move to some of the more affordable towns surrounding Harrisonburg. There are more affordable detached housing options when you look to Broadway, Timberville, Elkton and Grottoes. So, perhaps the townhome owners will just have to settle for a bit of a commute in order to buy a mid sized detached home that fits their budget. Jim suggests that maybe higher costs for new homes means that it will take much longer for families to be able to buy a home -- and perhaps they will have to stay in one home for a lifetime, instead of moving every 5 - 7 years. Gary concludes that many in our community may simply have to rent, or keep living in a townhouse, because of the cost of building new homes. --- CONCLUSIONS There were many other great points made, and discussions beginning, so thanks to all who engaged in this topic. A few big picture thoughts that come to mind for me....
Keep the conversations going, folks, on Facebook, with me, with each other. As Jim points out, "we're going to have to do housing differently than it has been built in the past 30 years if we are going to provide sustainable, affordable housing." | |
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We need mid sized detached homes, and lots of them, soon! |
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 Between 2000 and 2012, three centrally located townhouse developments were built in Harrisonburg:
Some of these townhomes were purchased by investors. Some were purchased by folks who have since sold and left the area. Some were purchased by folks who have since sold and bought a new, larger home, in or near Harrisonburg But I believe a lot of the original (or second) owners of these 614 townhouses are now looking around Harrisonburg wondering where they will, where they can go next. I believe our market desperately needs mid sized detached homes to be built, as these many townhouse owners are now older, often have started a family, and are looking for more space -- but can't jump up to buying a $350K to $400K home. What might these mid sized detached homes look like? Perhaps....
So -- who is going to build them? And where can the be built? In many conversations I have had lately, one of the main challenges is finding land that can be purchased at a price that will allow for the development and construction of this type of housing without making them $350K homes. | |
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What is being developed at the corner of Stone Spring Road and Spotswood Trail? |
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 download a larger version of this photo here Just driving by, you might not realize the extent of the mass grading that is currently underway on the corner of Stone Spring Road and Spotswood Trail. The photo above should put it into perspective. This is a LOT of land that is being leveled and prepared for development. But for what, you might ask? A good chunk of it will be used for apartments, it seems -- and the balance for future commercial development. Below is my understanding of the intended use of the space....  download a larger version of this photo here My understanding of this intended usage of this land is based on the Preston Lake master plan as shown below, updated as of December 2016....  The area that is currently being graded will include the area shown below surrounded by a dashed line. This will include 168 apartments in 12 buildings, as well as a clubhouse and pool.  Part of the land being graded in the aerial photo at the top of this post is intended to be used for future commercial development. So, who owns all of this land?
As it pertains to the 168 apartments.... "State Corporation Commission records list William Park of Charlottesville as the registered agent for Mid Town Square. Park is co-owner of Park Properties Management and president of Pinnacle Construction & Development Corp., which builds the apartments."The article went further to identify other complexes in this region that are owned and managed by Park's companies.... "Park's companies are behind two complexes in the area.Digging even further into my archives, I am finding that in the original packet for the proposed approval of the updated Preston Lake master plan (now approved) the engineer for the Preston Lake developer indicated that the apartment buildings are intended to be 2-stories in height. There are also quite a few additional details in that development packet as it pertains to proffers made by the developer when this updated master plan was approved. | |
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Introducing JustSoldInHarrisonburg.com |
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 If you like keeping up with everything happening in our local real estate market, I have just launched a new website that I think you'll enjoy. You can now visit JustSoldInHarrisonburg.com to keep track of every home being sold (via the MLS) in Harrisonburg and Rockingham County!  Now you can quickly scroll through the most recent home sales in Harrisonburg and Rockingham County, viewing all sorts of interesting details, such as:
 AND -- you can sign up to receive an email alert every time a home sells in Harrisonburg and Rockingham County. Click here to sign up for these email alerts.  AND -- if you're looking for a specific home sale, or for home sales on a particular street, or for home sales in a particular neighborhood -- you can search on this new website....  AND -- you can add the website to the home screen of your phone if you'd like, for quick and easy access....  So -- check out this new website, JustSoldInHarrisonburg.com, sign up for the email alerts if you'd like, and let me know how I can make this website even more helpful for you as you seek to better understand our local real estate market. | |
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Dangerous Conveniences, Part 2 |
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 OK, this one is going to be a bit of obscure of an issue (hopefully!!) than yesterday's review of why you should upgrade many of your flexible plumbing lines to be braided stainless steel lines. But some food (ha) for thought for you related to the gas grill you may have sitting just behind your house. Wouldn't it be great if you didn't have to run out from time to time to purchase a replacement propane tank to sit underneath your grill? My experience has always been that I run out of propane in that small tank just when I'm ready to start grilling. So, it would seem fantastic, then, if your grill was hooked up to the much larger propane tank that your home also uses for heating, your gas water heater, your gas stove, etc. That way, the propane company that regularly comes to re-fill that large propane tank for you will be effectively ensuring that you always have propane for your gas grill. How convenient! :) But wait -- Could there be a downside to having your gas grill connected to such a large supply of propane? I'm going to say yes -- from my own personal experience -- thanks to a squirrel. A few months ago, I came home after a week away, and when I walked out onto my back porch I was greeted by an overwhelming odor!?! I eventually figured out that it was propane. I eventually figured out that it was coming from the gas grill. I eventually figured out that it was actually coming from the gas line running to the gas grill. I eventually figured out that a squirrel had chewed through that line while I was out of town, and that propane had been leaking (billowing??) into my back yard for at least a few days. Thankfully, there weren't any explosions as a result of this squirrel's devious behavior -- but it caused me to (quickly!) reconsider whether I appreciated the convenience of having the gas grill hooked up to a large in ground propane tank. I concluded that the convenience of not having to go out and purchase a new small propane tank every so often was not worth the risk of having the exposed gas line running to the grill damaged, and having lots of propane leaking out of an enormous propane tank. That conclusion was significantly reinforced when the propane company next came to fill my in ground propane tank. I sort of wondered if they were surprised by how much propane I had used in the middle of the summer. I have yet to track down the squirrel to send him or her the bill for the propane.... | |
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Dangerous Conveniences, Part 1 |
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 Isn't it delightful to be able to walk over to your modern refrigerator and fill your glass with sparkling, cold water, or freshly cubed ice? But wait -- do you know of the danger that might be lurking behind your refrigerator?!? Any refrigerator with an ice maker or water dispenser has (clearly) a water line running to the refrigerator, and it may be in your best interest to carefully roll that refrigerator out to take a look at that water line. Many refrigerators will have a clear plastic line run to them -- which is certainly the most affordable, and flexible solution to use when running water line to a refrigerator -- but it is also the most dangerous. If you ask your co-workers, neighbors or friends if they have ever had a water leak at their home, a split line running to a refrigerator is likely to be a common experience. What, then, are you to do? Abandon that convenient source of fresh drinking water? Say it is not so! No, in fact, you do not have to give up this modern convenience, but you should consider replacing that plastic water line to the ice maker with a braided stainless steel line.  It is very difficult (unlikely) for a braided stainless steel line to leak -- and it is also not going to be accidentally split, cracked, punctured based on being moved around, or having temperature changes in the area where it runs. So -- to avoid a multi-month, inconvenient renovation to your home -- take the time, and make the minimal investment in upgrading the water line to your refrigerator! | |
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Who should decide how agreed repairs are completed after inspection negotiations |
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 One of my clients made an insightful comment recently, which was to point out that.... On home inspection repairs -- sellers usually have a short term fix mentality -- while buyers usually have a long term fix mentality. And, successfully negotiating agreed upon repairs after a home inspection can be a smoother process if we reflect on the difference in those perspectives. Inspector: Several roof shingles are missing, and the roof is past its life expectancy. Seller: Replace the shingles. Buyer: Replace the roof. Inspector: The air handler coils are dirty and the heat pump is reeaaallly old. Seller: Clean and service the heat pump and air handler. Buyer: Replace them both! These are a few extreme examples to start to show the differences in perspectives on repairs. Again, the important thing here is to recognize that a buyer and seller look at home inspection reports differently. A seller typically wants to minimize their repair costs while keeping the home sale on track. A buyer wants to make sure that any previously unknown property condition issues are addressed in a manner that is likely to prevent further near term maintenance needs in those areas. Both perspectives are reasonable, most of the time, depending on how it plays out related to specific deficiencies of a home. So, what is a buyer to do? A few thoughts....
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Housing Inventory Shortages in City of Harrisonburg Should Not Be Surprising |
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 If only we could have seen this coming. :-) Just kidding -- we have seen it coming. Knowing it was coming, though, didn't seem to inspire any actions to change the trajectory. As shown above, inventory levels have been steadily dropping in the City of Harrisonburg over the past five years -- or perhaps even longer -- I only have a record of the past five years. There have now been fewer than 100 homes for sale in the City of Harrisonburg for most of the past six months. How is this cured?
There is no easy way to turn this trend around -- and to have more options for City home buyers -- and until this does change, it can be quite challenging for buyers to find a home they want to purchase in the City. | |
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Mountaintop Retreat with Cabin, Canyon, River, on 46 Acres in Craigsville, VA |
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 I have spent many a fun filled weekend in this cabin located just under an hour south of Harrisonburg off of Route 42, in Craigsville, VA -- and now you have the opportunity to form your cherished family memories on this amazing property. This mountaintop retreat features a recently built two bedroom cabin with a finished loft on 46 wooded acres with a trail through the property to a canyon and river, both also on the property! Enjoy hunting, fishing, hiking, bird watching, and much more in a peaceful setting within an hour of Harrisonburg and Charlottesville. This custom built cabin features a great room with vaulted ceiling, two bedrooms, a full bathroom, a large loft area, a covered porch, and features hardwood floors and beautiful wood trim and finishes throughout the home. Enjoy fishing in Little Calf Pasture River on the lower section of the 46 acre tract, accessible by hiking down the property, or by driving in on an access maintained by the home owners association.  Can you spot the cabin in the photo above? It is toward the top of the wooded area shown above. This 46 acre parcel is mostly wooded, and not all of it is shown in the photo above.  Fishing anyone? This river runs along the bottom of the property, and is accessible via a trail down from the cabin, or along a separate road that runs along the bottom of this property. A short walk from this river, you'll find a beautiful rock face forming a canyon wall of sorts.  Can you picture the fun times had in this cabin featuring two bedrooms, a full bathroom plus an upper level loft?  You'll find plenty of space for relaxing on the covered front porch of this cabin, complete with swing. Find out more about this amazing property at CraigsvilleRetreat.com. | |
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Who cares if home sales are slowing down |
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 The pace of home sales is down 5% this year as compared to last year. But here's an interesting perspective offered up by one of my clients.... Who cares if home sales are slowing down!? As he points out -- the number of homes selling each month might be of more interest to the Realtor profession than the buying and selling public. What an interesting point! He then goes on to call out several data points that are much more important to him, and that he suspects (I agree) are more important to homeowners:
Indeed -- these three indicates are great benchmarks for the health of our local real estate market, and ultimately, he's right -- if prices are going up, inventory levels are low, and foreclosures are infrequent -- it doesn't matter quite so much whether home sales are slightly slower this year than last. So, chew on that for a bit. Home sales being higher than the previous year (at any given point) is not a necessary ingredient for a healthy real estate market. Read more about our local (slower-than-last-year) real estate market in my most recent monthly market report by clicking on the cover of the report below.... | |
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Townhouses (and duplexes and condos) finally increasing in value |
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 We've been waiting a few years for this. Attached homes -- townhouses, duplexes and condos -- have not seen much of a change in median sales price over the past three years. In fact, the median sales price declined slightly in 2016 after staying unchanged at $151,750 between 2014 and 2015. But now, we're seeing a (YTD) median sales price of $159,000 -- which is 6% higher than last year. This is a welcome sign of some price recovery in the "attached dwelling" category -- and in some ways it is just surprising that it took so long, as there has been a steadily increasing demand for these types of properties over the past six years. The number of these properties selling per year has increased from 179 in 2011 up to 331 last year -- which is an 85% increase. Read more about our local real estate market in my most recent monthly market report by clicking on the cover of the report below....  | |
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Low Inventory Levels Lead to Slowing Home Sales in September 2017 |
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Find out more about this beautiful Barrington home shown above here. I just published my most recent monthly market report, and as usual, you can read on for an overview, download the full report as a PDF, read the entire report with commentary online, or tune in to my monthly video overview of our local housing market...  OK -- now, let's break down a bit of this data....  As shown above....
In summary, I believe slower sales are a result of lower inventory levels, not a result of lower buyer interest. If buyer interest were waning, we would be seeing level or declining median sales prices, and increasing time on market, neither of which are happening in the current market.
As shown above -- we saw a LOT of home sales last August and September -- a total of 287 sales. This year, during the same two months, there have only been 221 home sales. This decline of 66 home sales (Aug/Sep to Aug/Sep) has put 2017 a good bit behind 2016 when it comes to year-to-date home sales -- and it does not seem likely that the final quarter of 2017 will somehow close that gap.
Above you will see what I'm referring to when I say that inventory levels are falling at a pace that is causing home sales to decline. Today's buyers have 26% fewer choices than buyers one year ago -- and 38% fewer choices than buyers to years ago. We knew that this would eventually cause sales to decline, as buyers won't just buy anything if it does not meet their needs now and into the future.
Not all homes are selling -- and not all homes are selling quickly -- but quite a few are selling quickly! The median days on market of homes sold in the past year has been 39 days! Furthermore, 45% of homes that have sold have gone under contract within 30 days! Yet another sign of strong buyer demand paired with low inventory levels. And -- one more time to drive home my point....
Above you will see that we are experiencing a strong seller's market right now -- with lots of buyers (having steadily increased over the past few years) and very few sellers (having steadily decreased over the past few years). There are now so few sellers that buying activity is starting to fade a bit in recent months. OK -- I'll stop there for now. I will continue to explore the latest trend in our local housing market in the coming days on my blog. And, my reminders for buyers and sellers last month still apply.... SELLERS -- even though it is 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.... | |
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Is It Too Late In The Year To List Your Home For Sale? |
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 I believe this question is best answered by evaluating when buyers make an actual buying decision -- which is when they sign a contract. The data above shows when buyers sign contracts -- calculated by averaging data from the three most recent years. As can be seen, the busiest buying season is March through August when an average of 125 buyers per month make a buying decision. The remaining six months of the year (September through February) show anywhere between 51% and 77% as many buyers as the average of 125 per month seen in the busiest six months of the year. So -- listing your home on November 1st (for example) is not a terrible idea -- we'll see 64% as many buyers signing contracts in November as compared to the average busy month. That said, in the following month (December) we're likely to only see half as many buyers as compared to the average month. | |
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A Ruff Breakdown of Why Millennials Are Buying Homes |
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 I'll say no real surprises here, on this analysis put together by SunTrust Mortgage of why millennials are buying homes....
Knowing why you are buying a home, and how long you think you will be in that home, are important things to be thinking about as you are preparing to embark upon the home buying process. Thanks to JoDee Lambert at SunTrust Mortgage for this fun infographic. | |
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Make your voice heard in the updated Comprehensive Plan for the City of Harrisonburg |
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 The City of Harrisonburg is in the midst of updating the Comprehensive Plan for the City. As per the City.... The Comprehensive Plan presents a vision of Harrisonburg's future. It identifies steps to move toward that vision by providing information about current conditions, long-term goals and objectives, and recommended implementation strategies. As described in the Code of Virginia, the Comprehensive Plan is general in nature. Harrisonburg's Plan addresses a wide range of issues including but not limited to: land use, housing, education, transportation, recreation, the preservation of historic and natural resources, and economic development. The plan serves as a long-term guide for the community, and it helps City leaders with setting policies and decision-making. So, basically, what do you want the City of Harrisonburg to be in 10 or 20 years? Discussions taking place and decisions being made right now will affect that future, and you have the opportunity to be a part of the conversation! Better yet -- there are several Public Workshops coming up that will allow you to chime in on topics near and dear to your heart.... Education; Arts, Culture, and Historic Resources; and Community Engagement & CollaborationSo, mark your calendars, and get involved in the discussions and decisions to help shape the future our our great City! Also of note.... Lots of Q&A's about the Comprehensive Plan update can be found here. General information about the Comprehensive Plan update can be found here. | |
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New Starbucks location (with drive thru) coming to Port Republic Road, 1250 feet from existing Starbucks |
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 Click here for a larger version of the map shown above. As reported in this past Saturday's Daily News Record -- a new Starbucks location will be constructed at the Intersection of Port Republic Road and Hunters Road, on a currently vacant lot. A variety of additional details and thoughts....
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Paired Homes Selling Quickly at The Glen at Cross Keys |
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 Sales are booming at The Glen at Cross Keys -- a paired home community, located just east of Harrisonburg. The main level of these homes feature an open floor plan, a cathedral ceiling in the great room, a master bedroom, the laundry room and a den / office on the main floor, plus two additional bedrooms and a full bathroom upstairs. Four homes are currently under construction (and under contract!) on lots 75, 76, 53 and 54 at The Glen at Cross Keys. Construction is about to begin on lots 51 (under contract) and 52, which will be followed by lots 33 and 34. You can find an overview of available homes here. And you can explore the most recently completed home in 3D here....  | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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