Sometimes, spending $1,000 on improvements to your home can be extraordinarily worthwhile -- providing you with $3,000 more in an eventual sales price!

This isn't a formula for turning $1K into $3K for every would-be home seller -- but hopefully it's enough to get some helpful discussions started.

Here are three types of improvements that can be very financially helpful to make to your home before listing it for sale...

Renewing Improvements - Sometimes an improvement, such as pressure washing and staining a deck, can breathe new life into an outdoor space -- eliminating a buyer's concern that they will have to completely replace an element of a house.  Another example of this would be gutters that are sagging and have peeling paint -- an easy fix (nails, sanding, paint) to breathe new life into them.  These types of improvements can make a buyer more comfortable paying more for your home.

Complicated Improvements - Some improvements or repairs to a home can seem overwhelming to a buyer, such as repairing a half dozen pieces of exterior siding on a variety of sides of a home.  To a buyer, this seems complicated -- where will I get the siding, what if it doesn't match, how do I just replace one piece, etc., etc.  If, before you list your home for sale, you hire a professional to take care of what is a relatively easy and inexpensive repair, you'll provide some relief to would be buyers - and they're likely to be willing to pay more for your home.

Elevating Improvements - If you have a house that was built 30 years ago you might still have the original light fixtures (likely brass) throughout your home.  You might be able to replace all of those fixtures with something more modern (brushed nickel, for example) and completely change the class or category or feel of your home.  This type of improvement can elevate the feel of your home to make it feel younger, more modern, and potentially result in a higher sales price.

There is not "one size fits all here" -- it starts with a conversation about which potential improvements to your home do and do not make sense to pursue.  Let me know if you'd like to chat.

  

Should All Possible Improvements Be Made To A House Before Listing It For Sale?

Maybe, maybe not.

Selling a house (from an over-simplified perspective) comes down to price, condition and marketing. 

When we first meet to discuss your house, one of the things we'll discuss is the current condition of your house and whether there are improvements, repairs or upgrades that could be made to better position your house to sell in the current market.

So -- should you, as a seller, make ALL of the possible improvements to your house before we then list it for sale?  It depends.

Here are a few types of repairs that probably won't make sense to make...

Slow Improvements -- If it will take 60 days to accomplish some of the items, it may not make sense to wait that long to list your home, depending on the current time of year, and what the particularly slow improvement is.

Elective Improvements -- If some buyers will find a particular improvement or repair to be essential, but others could care less, then we probably won't want to spend the money (and time) to make that change to your house.

Net Loss Improvements - Sometimes you can spend $500 to make a repair or improvement to your house to result in selling it for $2000 more.  Sometimes a $500 repair or improvement won't increase the likely sales priced at all.  Thus, many of these net loss improvements (cost more than the value increase they provide) will not make sense to pursue.

In the end, it's complicated -- and it depends on the time of year, market dynamics in your price range, and many other factors.

If you're getting ready to put your house on the market, don't slow down and blindly make ALL possible improvements, but also, don't expect that you won't have to make any.

Let's meet to develop a game plan that makes sense in the current market and given your circumstances and priorities.

 

It seems it would be an understatement to say that there are a LOT of buyers looking to buy homes in the City of Harrisonburg.

Thus far in 2019 buyers have contracted to buy 99 homes in the City of Harrisonburg.  Here's how fast they did so...

   view larger image

Take a close look at the updated Urban Development Area map for updates on current and proposed developments in Rockingham County's "Urban Development Area" just southeast of the City of Harrisonburg.

Just like that - the year is already more than 25% behind us.  Looking back over home sales activity during the first quarter we find a mixed bag of market indicators. 

Before we delve in, two quick links...

Now, on to the data...

As shown above...

The green rows above are showing sales activity for detached ("single family") properties.  The orange rows are for attached properties - which includes duplexes, townhouses and condos.

Here (above) is a visual of the not-so-exciting way that this year has begun when we look at monthly home sales compared to the same months in recent years.  February home sales were the slowest out of the past four years - and January and March were the second slowest.  So - clearly - a slow start to the year - but keep on reading for some news on contract activity.

The graph above explores long term (rolling 12 month periods) trends in home sales and prices.  Over the past year we have seen sales start to trend slightly downward - while prices have trended slightly upwards.  Nothing drastic in either direction, really, but  those are the general directions we're seeing the market move.  Of note - the rising prices shown above have more to do with a change in the mix of what properties are selling (more higher priced detached homes and fewer lower priced attached homes) more than an actual increase in values.  As shown a bit ago (scroll up) the median sales price of detached homes has remained flat over the past year.

Here's a slightly more depressing view of value trends for detached homes.  Over the past few years the increase in sales prices has been decreasing (+7%, +5%, +2%) and with data only from the first quarter of 2019, the median sales price has actually declined.  I am guessing that we'll actually end up with a net gain in median sales price once all 2019 data is in the books, but for now, prices are appearing slightly soft when just viewing first quarter data.

But if you're selling an attached (duplex, townhouse, condo) property - the state of the market is looking promising!  As shown above, the prices they just keep on rising.  Part of this is likely a result of constrained supply (not enough new townhouses being built) amidst increasing demand.  This is keeping sales prices on the rise and that doesn't show signs of stopping in the near term.

OK - hopefully you read this far - because here is the silver lining of the first quarter of our local housing market.  Despite slower sales in the first quarter, contract activity was STRONG in March 2019.  In fact -- it was the second strongest month of contract activity in the past 21 months!  This should lead to strong months of closed sales in April and May, and hopefully this is just the beginning of a strong Spring and Summer of contracts being signed.

For the past few years I kept saying I didn't think inventory levels could drop any further.  Well, they did, they have, and somehow the market keeps on moving.  As shown above, despite a monthly increase in inventory levels between the end of February and end of March, we have seen another year-over-year decline in the number of homes on the market.  Unless we see a significant growth in new construction in this area, these low inventory levels are likely to remain the norm for the next few years.

And here's a bit of trivia for you -- the fastest growing price segment of our local housing market is --> the $200K - $300K price range.  There has been a 19% increase in sales of homes between $200K and $300K, which is the largest increase of any of the price categories shown above.

What brought on the strong surge of contract activity in March 2019?  Could it be the sudden drop in mortgage interest rates, down to an average of 4.06%?  Probably not just that -- it was likely also a surge in new listings combined with anxious buyers who had seen very few options over the winter months.  But the low mortgage interest rates likely helped and were an added bonus to anyone making a decision to commit to a home purchase during March 2019.

Well, folks, that's a wrap.  You read to the end of my overview of our local housing market.  You can delve into even more details by downloading a PDF of the full report here.  And as always, if you have questions about our local housing market feel free to be in touch.

My guidance to local soon-to-be home buyers and sellers remains consistent...

 

The City of Harrisonburg and Rockingham County are going through their annual budget process and while Rockingham County has proposed a budget that does not include any changes to the real estate tax rate, the City of Harrisonburg's proposed budget for next fiscal year requires a $0.01 increase in the real estate tax rate.

Read more about the City's forthcoming budget via...

 

As described yesterday, sometimes you might have to think about whether you are willing to move twice.

If you'd really rather not move twice -- but you need to sell in order to buy -- and it will be harder to find something to buy than it will be to sell -- so you don't want to list your current home for sale until your future home appears...

Then maybe, just maybe, we need to think about timing and sequencing a bit differently.

Instead of this...

Maybe it needs to be this...

If you're looking to buy a home between $250K and $300K expect to have LOTS of competition from other buyers.  Houses that are prepared well, priced well and marketed well, are going under contract quickly -- sometimes with multiple offers.

Which then (eventually) leads us to the question at hand -- are you willing to move twice?

If you're buying a home between $250K and $300K, there is a decent chance that you own your current home, and that you'll need to sell it in order to buy the next house.

And given that there are so few options for you to buy right now, you probably haven't listed your current home for sale yet -- because you're waiting until you see something that you want to buy.

But when the home you want to buy comes on the market, and you look at it on the first day and decide you are ready to make an offer - I'm going to tell you that we probably won't be successful in securing a contract to buy your new home unless you have your current house under contract.

So then we'll speedily get your house on the market. 

But by the time it is on the market, or by the time it is under contract, the chances are that the house you wanted to buy will then be under contract to another buyer.

Ugh.

So -- what is someone in this situation to do?

Option 1 - Do what is described above, and hope you get lucky.  Wait to list your home until you see something you really want to buy. Hope that nobody else wants to buy it, somehow.  List your home.  Get a contract in place on your home.  Make an offer on the house you want to buy.

But perhaps you'll try Option 1 a few times and fail - losing the house to another buyer, which leaves you with two other options...

Option 2 - Secure financing to buy a new home before having sold your current home.  This way you can commit to buying the new house before having a contract on your current home.

That isn't a possibility for all buyers, so you may also have to consider...

Option 3 - Be willing to move twice.  List your home for sale, when you get an offer, ask for a longer than normal closing timeline - perhaps 75 days instead of 45 - 60 days.  Then, hope that the house of your dream comes up for sale in the subsequent 30 days so that you can contract to buy the new home and close on them simultaneously - but be ready, willing and able to move twice if you need to do so.  You may, with this option, have to move out of the home that you own - because you sold it - before you have found and secured a contract on the new home you'll be buying.  This might mean moving in with family, and it might mean renting before buying the next home.

In the end, given how quickly the market is moving, you may have to decide if you are willing to move twice in order to make a transition to your next home. 

 

I'll publish my full monthly market report later this week, but wow, home buyers were busy in March!  After the usual slow start to the year with 84 contracts in January and 92 in February, things started to pop in March -- with a sharp uptick to 134 contracts.

For some context:

JANUARY:

This Year = 84 contracts

Last Year = 85 contracts

FEBRUARY:
This Year = 92 contracts

Last Year = 90 contracts

MARCH:
This Year = 134 contracts

Last Year = 128 contracts

So -- thus far it seems that this may be another robust year of home sales in Harrisonburg and Rockingham County.

 

The market is moving QUICKLY -- homes are often going under contract in a matter of days instead of weeks -- so it is essential that you know about new listings immediately when they hit the market.

Most of my clients use NewListingsInHarrisonburg.com to keep track of new properties coming on the market in Harrisonburg and Rockingham County.

You can quickly and easily scroll through the most recent residential listings in Harrisonburg and Rockingham County, view the pertinent details, all of the photographs of the home, an area map, and then quickly and easily share that new listing with a friend, your spouse, your Realtor, etc.

You can also sign up to receive an email alert every time there is a new listing....



Check it out, at NewListingsInHarrisonburg.com.

 

On one of my recent listings we received three offers within the first week.

On another, we -- again -- received three offers within the first week.

And on a third, we received seven (!!!) offers within the first two days.

These 13 buyers were all ready, willing and able buyers - anxious to buy a home.  They came to see the listings in the first day or two (or three) that they were on the market.  Most of them had already talked to a bank or mortgage company to become prequalified.  They made serious, reasonable offers - some with escalation clauses.

And yet -- only three of the 13 would-be buyers were successful at securing a contract to buy one of these homes.

My main conclusion - there are PLENTY of buyers, ready to act. I suspect we will continue to see homes go under contract quickly (often with more than one offer) when they are prepared well, priced well and marketed well.

To the other 10 buyers -- I only wish my clients had duplicates of their homes to sell to you -- and I feel for your plight.  Several of these would-be buyers had already made another offer on another house in the recent past and missed out on that one as well.

 

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 back splash, 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.

I don't play poker regularly - though I have played a few times over the years. Whenever I do, I can become caught up in my excitement to see a straight, a flush, or full house in my hand.  Wow!  This pot is mine!  I am bound to win this time!  And often, that might happen with a strong hand in poker -- but not always.  Sometimes, another player will have an even stronger hand, and I'll lose despite my strong hand.

Here are the rating of poker hands, in increasing strength...

And here are some generic types of offers that might exist on a house, in increasing strength, generally speaking...