Archive for November 2017
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Finding Multi Family Investment Properties in Harrisonburg, Rockingham County |
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 Multi Family Properties can be a means to more quickly and simply make a larger investment purchase. Whether it is a duplex, triplex, quad, or a small apartment building, you will often be able to purchase these properties at a lower price per unit, and more quickly increase your total rental income as compared to purchasing one individual property at a time. HOWEVER - there are very few multi-family properties that are offered for sale in Harrisonburg and Rockingham County. A few tools for you if you are potentially interested in purchasing a multi-family property in this area. This one has been around for a bit.... Current Multi-Family Listings - bookmark this page on HarrisonburgInvestmentProperties.com to come back and review current multi-family listings at any time. This is the new one.... Email Alerts for New Multi-Family Listings - sign up to receive an email alert every time a new multi-family property is listed for sale in Harrisonburg or Rockingham County via the HRAR MLS. Enjoy -- and let me know if you have questions about multi-family properties, or real estate investing in general. | |
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Most Contracts Result In Home Sales |
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 Most of the time, it seems, a contract will result in a closing. OF NOTE -- this is a very (very!) imprecise analysis. In some ways, it is most useful as an indicator of trends over time, but here goes nonetheless.... Per the data above, in 2016....
Does this mean that only 22 contracts fell through? Well, sort of....
But, despite that slight fuzziness, it seems that the success rate of contracts rose to a new high in 2016 -- and thus far in 2017 has been a bit slower than last year -- though on pace with 2015. | |
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Contracts slow in November 2017 within context of declining inventory |
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 In the first 21 days of November, this year, 61 buyers have signed contracts to purchase homes in Harrisonburg and Rockingham County. Compare that to last year, when 72 buyers had signed such contracts, and you'll note that there has been 15% decline in contract activity when examining this relatively small window of time. Why might this be happening? Perhaps it is because buyers have fewer and fewer options of homes to purchase. Also shown above, you'll note that in early November of this year, buyers had 356 listings from which to choose -- and last year they had 480 choices. This marks a 26% year over year decline in options for buyers. I am hopeful that we'll see this inventory situation turn around at some point, but until or unless it does, buyers are not likely to have very many options for homes to purchase. | |
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During which month are you least likely to sell your home? |
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 The graph above examines what percentage of active listings went under contract in each of the past12 months -- thus, accounting for both fluctuation in buyer activity as well as fluctuation in inventory levels. It seems you are least likely to sell your home (have it go under contract) in January or February -- when less than 1 in 5 homes goes under contract. That is in stark contrast to May through July where approximately 1 in 3 homes goes under contract each month. | |
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Do Not Fear the LOW Offer On Your Home |
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 Sellers are usually quite shocked, dismayed or disheartened to receive a low offer on their house, for example, an offer of $225K on a $275K listing. But it is important to remember that even that low offer really is a compliment!  If you have not yet had an offer on your house (that is listed at $275K) and you receive an offer of $225K, that doesn't necessarily mean your house is only worth $225K, nor does it necessarily mean that you should accept $225K or something close to it. It does, however, mean something quite exciting --- somebody wants to buy your house!!! Of course, negotiations won't always work out with low offers -- but recognize a low offer for what it is -- a buyer who wants to buy your house, and perhaps the first buyer who has declared as much through a written offer! If there is any way to put a deal together with those buyers, you ought to pursue it, as it's hard to know when the next buyer will work up the courage to tell you that they want to buy your house! | |
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Zillow counts bathrooms rather generously |
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 Zillow seems to be at least a somewhat frequently used reference for folks looking to buy homes in this area. Their data is usually (or at least "often") accurate -- though with some frequency there are some issues with their data. A funny one that I have only recently recognized is that the way they count bathrooms is a bit different than most buyers and sellers would count them. Basically, their main "4 Bedrooms, 4 Bathrooms" (for example) description does not necessarily mean that there are four full bathrooms. It could mean any of the following....
Right -- so -- when checking out homes on Zillow....
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Contract activity slightly stronger than expected in October 2017, but Winter is coming! |
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 Contract activity in July, August and September 2017 (295 contracts) was a good bit slower than last year when there were 348 contracts during that same timeframe. Some of this decline in the number of contracts being signed is certainly a result of lower inventory levels. Thus, it was somewhat of a surprise that contract activity in October 2017 (112 contracts) was slightly higher than last October when there were only 109 contracts signed. So -- a slight uptick in buyers being able to successfully negotiate deals with sellers -- BUT don't forget, Winter is coming! Over the past eight months there have been an average of 119 contracts signed per month. If last Winter (+/-) is any indication, that is likely to drop slightly in November, and then much more significantly in December, January and February. Last Dec-Feb, there were an average of 72 contracts signed per month -- a good bit less than the 119/month average from the past eight months. Read more about our overall housing market in my most recent monthly market report.... 
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Strong Sales Year for Duplexes, Townhouses, Condos |
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 As shown above, this has been a strong year for "attached home sales" -- which includes duplexes, townhomes and condominiums -- but does not include single family detached homes....
Stay tuned for the end-of-year results, but the sales trajectory in this property category is looking promising. Read more about our overall housing market in my most recent monthly market report....
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Local Home Prices Rise Despite Slightly Slower Sales Pace |
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Find out more about this new listing in Lakewood Estates shown above by clicking 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 or read the entire report with commentary online. Taking a look, first, at a high level overview of the market thus far in 2017....  As shown above....
So -- while slightly fewer (-5%) homes are selling this year, they are selling at higher (+2%) prices, and are selling much (+37%) more quickly!  As shown above, this year lost its momentum in August and September -- where monthly home sales (118, 105) were no match for last year (158, 129). Things leveled out, a bit, in October -- with just about the same number of home sales (96 vs. 97) this year as last year. Where things will go next month is anyone's guess -- looking at the past three years, November home sales have ranged from 68 all the way up to 113!  Above, visualized slightly differently, you can see that 2017 home sales were on par with (actually exceeding) last year up and through July before we then fell behind in August, September and now October. It seems certain that we'll finish out the year with fewer home sales this year than last, but more than in 2015. All that said -- as one of my clients pointed out -- maybe we shouldn't care if home sales slow down?  Indeed -- a slightly slower pace (-5%) of home sales might not be an negative indicator of market health -- that decline could be a result of declining inventory levels. Perhaps a better sign of a robust and improving local real estate market is the 7% increase in the median sales price of single family homes between 2015 and 2016, and the apparent 5% increase we seem likely to end up with in 2017.  Speaking of slowing sales possibly being a result of lower inventory levels -- yes -- inventory levels are still way (-26%) below where they were last year at this time. And -- no good news here -- it would seem that we will likely see a further seasonal decline in the number of homes on the market as we continue through November, December and January!? Home buyers will likely have a tough time finding options over the next few months -- depending on their price range, where they want to (or are willing to) buy, etc. Let's pause there for now -- though I will continue to explore the latest trend in our local housing market in the coming days on my blog. Until then -- feel free to download and read my full market report as a PDF, or read the entire report online. And if you will be preparing to sell your home soon, you might find these websites helpful.... | |
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Housing Inventory In Short Supply Under $200K, $300K |
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 No new news here -- I've been saying it for some time -- fewer and fewer options exist for buying a home in our city/county for less than $200K, and even under $300K. But this visualization (click here for a larger version) was inspired by a comment from Brad - thanks Brad! We know that housing inventory, overall, is at a 10+ year low right now, but Brad observed that not all price ranges are created equal. As (somewhat clearly) shown above, the $300K - $400K and $400K+ price ranges have maintained a relatively stable/healthy supply over the past ten years -- and the under $200K and $200K-$300K price ranges have been the most significant declines. | |
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Half of local home buyers spend less than $200K |
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 Looking at home sales in the past year we find that....
As such, yes, only 6% of our local market is comprised of home sales over $400K. Also, though not labeled on the graph -- 98% of home sales were under $500K. So, if you're intending to sell a home for over $500K, bear in mind that you're aiming for only 2% of the local market. And, here's all of the data for those who are interested....
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How Low Can Inventory Levels Possibly Go? |
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 Today, there are 364 homes for sale in Harrisonburg and Rockingham County. I have been tracking this data for almost 10 years now and there has never (NEVER) been a time when we have had this few homes for sale. Wow! | |
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Average 30 Year Mortgage Interest Rates Still Below Four Percent |
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 Mortgage interest rates are still below 4% -- after having spent November 2016 through May 2017 between 4% and 4.5%. Today's buyers are enjoying the opportunity to lock in their monthly housing costs at historically low rates. And -- let's look a bit further back -- at the past three years....  As you can see, above, mortgage interest rates have fluctuated between 3.5% (+/-) and 4.25% (+/-) over the past three years. If you were prequalified for a loan nine months ago (when rates were at 4.3%) you might want to request some updated potential payment scenarios from your lender with the current mortgage rates. | |
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New Building Lots Available in Preston Lake, Crossroads Farm |
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 Of interest -- two new types of building lots have hit the market in the past week or so.... PRESTON LAKE Previously, if you wanted to build at Preston Lake -- you had to work directly with the developer/builder, using one of their sets of floor plans, and having them build the home for you. Now, it appears you can purchase a building lot and bring your own builder. The lots that are now listed for sale are between 0.4 and 0.5 acres and are priced between $145K and $175K. Explore these building lots at Preston Lake here. CROSSROADS FARM The (new-ish) developer at Crossroads Farm has just recently listed some new "cottage lots" at Crossroads Farm, that are somewhat small -- only 0.2 acres. As marketed, these "smaller footprint lots offer less yard maintenance without sacrificing the elegance of Crossroads Farm." These lots are priced between $70K and $90K. Explore these building lots at Crossroads Farm here. | |
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Legality of Short Term Rentals in Harrisonburg, Rockingham County |
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 Stretching back a few weeks, Nolan Stout at the Daily News Record, wrote an informative article about short term rentals in this area. Bottom line -- and to answer a question many of my clients have asked me in recent years.... "The rentals, considered short-term rentals, are unregulated in Rockingham and illegal in Harrisonburg in residential zoning districts. That could change, however, as city and county officials consider taxing the property owners and creating zoning regulations to address neighbors' concerns." So, again....
A few other interesting snippets from the article....
Read the entire article here. | |
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Will housing inventory levels improve next year? |
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 Short Answer = I don't think so. Several buyers who I have been chatting with lately have expressed dismay at the low inventory levels, which results in very few options for them to consider in their home search. The question inevitably comes up as to whether inventory levels are likely to improve next year. The graph above shows that at inventory levels have been consistently declining over the past four years as measured by how many homes are on the market at the start of the main buying season, which I'm defining as April in the graph above. So -- after seeing a 24% decline in inventory levels between April 2016 and April 2017 -- are we likely to see inventory levels start increasing again in 2018? Again, I don't think so, and here's why.... To reverse this trends of declining inventory we would need one or more of the following to happen in our local market....
Again -- none of the changes above seem likely to happen at a scale that would allow inventory levels to see much, if any, of an increase next year. As such, I am expecting we'll see relatively similar inventory levels next Spring and Summer. Sorry to be the bearer of bad news -- as always, just trying to give folks realistic expectations for the future. | |
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Is it a good time to buy an investment property in Harrisonburg? |
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 I had an interesting conversation with a real estate investor who is considering the purchase of a rental property (or properties) in the City of Harrisonburg, and they asked whether Harrisonburg was a good market in which to buy such a property -- or, put differently, is now a good time to buy a rental property in Harrisonburg. After some discussion, and further processing since then, I think I'm sticking with my original "yes and no" answer.... Yes -- it is a great time to buy a rental property in Harrisonburg:
There are a variety of other factors that could be put on one of the lists above -- but at the end of the day, it is not a clear or obvious decision to buy or not to buy. Some of the factors that should likely weigh in as you think about this decision are:
Below, then, also are a variety of resources that might be helpful to you as you think about this decision and as you consider specific rental properties....
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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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