Archive for June 2019
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Extra Three Day Tickets to Red Wing Roots Music Festival |
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 One of my favorite weekends of summer is coming up - the Red Wing Roots Music Festival, where more than 40 musical groups (folk, Americana, roots music) will be performing at Natural Chimneys Park in Mount Solon, VA. Other fun activities at Red Wing include camping, great food, hiking, biking, swimming, running and more. The music festival is hosted by The Steel Wheels and is an extraordinarily relaxed family-friendly environment. So, what are you doing July 12th, 13th and 14th? Maybe I'll see you at Red Wing? Extra Three Day Tickets To Red Wing... I have a few extra 3-day tickets that I won't be using. If you or your family would like to go, but haven't bought tickets, drop me an email at scott@HarrisonburgHousingToday.com to see if I still have any remaining. | |
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The Buyers Did Not Like The Layout Of Your Home |
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 If a buyer is buying over $400K, or even over $300K, the layout of the home becomes very important to them. That is not to say that it is unimportant for a $200K buyer -- but someone buying a more expensive home oftentimes plans to stay in it for a longer time frame. If not the #1 feedback, then perhaps the #2 feedback I receive from showings of homes priced over $400K is that the layout just didn't work for the buyers....
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Should I Be Worried If A House Is Being Sold In AS IS CONDITION? |
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 Sometimes a seller is stating this as soon as they list a property: All inspections are for informational purposes only. or This house is being sold in "as is" condition. Here are the top three innocent reasons why a seller would want a home inspection to be for informational purposes only....
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Concept Plan of New Harrisonburg High School |
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 Click on the links below to check out a concept plan dated May 31, 2019 for the new Harrisonburg High School, which seems to feature:
Follow updates on this new high school here. | |
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Property Transfers in Harrisonburg, Rockingham County |
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 Looking for information about recent property transfers in Harrisonburg and Rockingham County? Be sure to check out HarrisonburgPropertyTransfers.com. Of note...
You can also subscribe to receive these updates by email. Just complete the form at the top of HarrisonburgPropertyTransfers.com. | |
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Comparing Monthly Property Tax Bills Between Harrisonburg and Rockingham County |
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 Getting a bit further into this topic -- yesterday I was looking only at the changes in the property tax rates in the City and County -- as shown here. Today (thanks for the idea, Mike) I looked at how a monthly property tax bill has changed over the past decade for a median priced home in the City and County. To be clear, this analysis uses:
As shown above, it has become more expensive (16%) to pay property taxes on a home in the City of Harrisonburg as compared to a similarly priced (assessed) home in Rockingham County. Now -- does this cause anyone to move from the City to the County? Or does it cause anyone new to the area to buy in the County instead of the City? Not necessarily - or at least that has not been my experience in working with buyers and sellers in the past ten (+) years. | |
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Real Estate Tax Rates Finalized in Harrisonburg, Rockingham County |
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 The real estate tax rates have been finalized for the 2019-20 fiscal year...
For some context...
For an even broader context...
And to translate it into monthly costs...
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Thoughts and Questions on Short Term Rentals in the City of Harrisonburg |
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 More great reporting over at The Citizen about short term rentals...
And a few prior articles...
And to follow that recap, some thoughts and questions... Does approving a Short Term Rental remove a property from the local housing stock? Not really - or not most of the time? Most of the Short Term Rental applications have been from owners who live in their home and want to offer a portion of their home as a short term rental option. So - those properties aren't being removed from the local housing stock - the owners still live there. Further, the approval of a non owner occupied property as a Short Term Rental wouldn't remove a property from the "purchasable housing stock" since the owner is presumably currently renting it to a long term tenant. Technically, a property owner could decide to stop renting a house to long term tenants and start renting it only to short term tenants -- thus making it such that most occupants of the house would not be local residents, but just those passing through. In that situation it would, in some ways, be moving the property from the local housing stock to the "local hotel stock" - if that were a thing. This (converting a home from being occupied by the owner or a long term tenant to being occupied only by short term tenants) doesn't seem to be the majority of what is being proposed or considered - and my general sense (not scientific or data driven, I know) is that there is only so much of a market of would-be tenants for short term rental properties. If one hundred local property owners moved out of their homes, were approved to use them as short term rentals, and listed them on AirBNB, I don't think that all, or most or would be pleased with the rental demand from short term tenants. If one Short Term Rental is approved on a street or in a neighborhood will lots of other property owners follow suit and apply to become short rentals? Not really - or not most of the time? I think most folks who own and live in their homes in Harrisonburg enjoy living in their homes, probably by themselves. I don't think that the ability of one home out of 50 (in a hypothetical neighborhood) is going to cause more and more property owners to either take in short tenants to live with them, or to move out of their homes and start renting them to short term tenants. Will investors start buying up properties in Harrisonburg as short term rentals? Probably not, or not in large numbers? I don't think there is an untapped demand by short term tenants that would reward those investors with frequently rented short term rental properties. Yes, it is technically true that renting a property to 100 tenants for short terms instead of one tenant for the entire year is almost certainly going to be more profitable - but I just don't think there is that much demand by short term tenants. As a side note - there are plenty of localities where ordinances limiting short term rentals do not exist. I tend to think that investors would be more likely to invest in a property where short term rentals are not regulated before they'd invest in a community where there are somewhat restrictive regulations in place. Will the City's new Short Term Rental policy increase or decrease the number of City properties that are being used as short term rentals? To me, this is one of the more interesting questions. Property owners in the City have been operating short term rentals in the City for quite some time now (5+ years?) without actually having the legal ability to do so. Most of the concerns above seem to be regarding the hypothetical possibility that more and more and more properties will be come short term rentals. I tend to think that we won't see a large shift in the number of properties being used as short term rentals when comparing (for example) 2018 and 2020. Of the folks using their homes as short term rentals prior to these regulations:
Those four (non-exact, non-numerical) changes above would seem likely to result in a net decline in the number of short term rentals -- and moving forward, property owners would seem to be less likely to want to use their property as a short-term rental as there is now a higher barrier to entry in the form of an application fee and several months of processes and meetings. Should most Short Term Rental applications be approved? Not necessarily? City Staff, Planning Commission and City Council are looking at each application through many lenses to understand how each property being used as a short term rental would affect surrounding property owners, the neighborhood, etc. I think all of those property-specific perspectives are valuable and I am glad to see the thoughtful process being used for deciding whether to approve short term rentals. The broader thoughts of "maybe we shouldn't approve any or many short term rentals because of how it could have a large impact on our local housing market and housing stock" (my summary, not a quote) are a bit more difficult for me to agree with - at least given my understanding of the short term rental market as of today. Am I completely wrong to not be overly concerned about unintended consequences of approving many or most applications for short term rentals? Quite possibly! If lots of property owners decide they want to pursue using their property as a short term rental AND the City approves many or most or all of them AND there is an unexpectedly high demand from short term tenants -- then it is possible that there would be widespread negative unintended consequences. I'm not thinking this is likely - but I could be wrong. What are your thoughts? | |
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Rockingham County Considers Creating Lake Shenandoah Stormwater Control Authority |
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 Rockingham County is proposing that a Stormwater Control Authority be created in the area shown above in blue. Learn more here. The link above takes us to some great FAQ's, which explain that...
This proposed Stormwater Control Authority would include all or part of the following areas:
Again, learn more about this proposal and process here. | |
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Summer Has Not Started, But For Real Estate, Summer Is Nearly Over |
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 Technically, summer has not even started yet -- the first day of summer is June 21, 2019 - this Friday. I suppose then, that was why we had such pleasant temperatures over the past week or two -- it was really late Spring, not yet Summer. :-) But for real estate, summer is almost over, at least as a home seller. Home buyers that want to close on their home purchase before next school year are likely aiming to close on their purchase by around August 15, 2019. Most contracts take around 45 days (sometimes 30, sometimes 60, sometimes in between or longer or shorter) to get from a brand new contract to the settlement table. If you wanted to close on a home by August 15, and it was going to take 45 days to do so, you'd need to be under contract by July 1. So -- that leaves buyers with only about two weeks to get a house under contract if they want to close on their purchase and have a chance to move in prior to next school year. So, buyers, get ready to amp up your game and get that new house under contract! And sellers, if you want to sell your house this summer, you need to get it on the market soon, now, yesterday! | |
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First Three Short Term Rentals Approved in Harrisonburg |
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 The City of Harrisonburg now regulates short term rentals -- and the first wave of applications have now made their way through the review process (City Staff, Planning Commission, City Council) and three properties have been approved by the City as short term rentals:
As context:
You can read more about this topic as follows...
As per the last article above... "All three permits were approved with conditions, including that the properties be the primary residence of the owner-operator, the owner-operator be present while renting out the space, and the owner-operator file a form guaranteeing that the "accommodation spaces" meet certain safety requirements, such as a door or window for immediate emergency exit to the outside." There are a pile of additional applications that will be reviewed over the next few months as we move towards August 1 when the enforcement of this new Short-Term Rental ordinance begins. | |
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City Home Buyers Have Fewer and Fewer Choices (at any given time) |
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 If you are a home buyers (or would-be home buyer) in the City of Harrisonburg, it can be a frustrating time to try to find that "right home" given the extremely low inventory levels. With only 53 homes currently on the market (and only 33 of those being detached homes) you might be waiting longer than you'd like to find a home that can work for you. This is a recent phenomenon, however, as the current inventory levels are 38% lower than a year ago and 63% lower than three years ago. Sadly, I don't think we're likely to see a significant increase in City housing inventory levels unless we (unexpectedly) see new homes starting to be built in the City. So, as a City home buyer -- be prepared to be patient, and then act quickly when the right house comes on the market! Read more about our local housing market in my monthly market report. | |
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Local Home Sales Stable, Prices Rising in First Five Months of 2019 |
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 We're nearly halfway through the year and 2019 is shaping up to be a strong year of home sales, very similar to last year. But before we dive into the data, here are a few quick links...
Now, let's see what the data is showing us this month...  As shown above, we have seen a solid start to the year, now five months in...
 Breaking things down a bit further, as outlined above, we'll start with the green portions of the chart -- which are detached homes...
The orange section above represents attached homes -- including duplexes, townhouses and condominiums, where we find that...
 As you look at the graph above, find the dark red line and follow it from month to month from January through May to see how this year compares to previous years. What you'll find is that January, February and March were nothing special -- at all. They were slower or the slowest such months from the past few years. But once we hit April, things started to change -- we saw more home sales in April than any of the past three months of April -- and May home sales were also stronger than two of the past three months of May. So, as noted above -- April was surprisingly high, May was a pretty strong showing, but June, that might be where this year starts to slow down, comparatively. Last June we saw a surprising, historic, 174 home sales in a single month. It seems rather unlikely that we'd see that many home sales this June.  This tall, colorful, graph shows each month of home sales stacked on top of the prior month -- and you'll see that the first five months of this year have tracked pretty consistently with the first five months of each of the past two years. So, it seems reasonable to think we might end up somewhere around 1280 - 1300 home sales for the full year of 2019. Stay tuned as the year continues to develop.  This graph shows looooong term trends -- tracking a rolling twelve months of data when it comes to the quantity of home sales and the median price of those home sales. The highly technical 1300-ish red squiggle at the bottom of the graph represents the meandering annual pace of home sales as shown in orange. We've been somewhere around an annual pace of 1300 home sales for the past 12 months or so -- with the most recent (two month trend) heading us in a positive direction. The top, green, line is showing the long term trend for the median sales price of homes in Harrisonburg and Rockingham County. The median sales price keeps on climbing -- from $193K to $206K to $215K over the past two years.  Sometimes looking at a single month of data can throw us off -- getting us overly excited or overly depressed. Last May (2018) we could have been elated about the incredibly strong month of contracts -- though it followed two slower months in March and April. This year we saw strong months of contracts in both April and May -- even though neither reached the 171 contracts seen last May. But in the end, March-May contracts only added up to 427 contracts last year -- and 436 this year -- so, a net increase.  And so, as shown above, the sad story continues -- it is a tough time to be a buyer. Inventory levels might be rising and falling seasonally (rising, slightly, right now) but the overall trend over the past several years has been fewer and fewer homes for sale at any given time. This causes buyers to have fewer choices at any given moment -- and requires that they be able to act quickly and decisively when a house of interest comes on the market.  I'm not always convinced that month to month increases or decreases in mortgage interest rates can specifically spur on buyer activity (there has to be a house listed for sale that you actually want to buy) but the lower (and lower, and lower) mortgage interest rates of late certainly don't hurt! We haven't seen mortgage interest rates below 4% in over a year -- and right now many mortgage lenders are quoting rates of 3.875%, 3.95%, etc. An exciting time to lock in a fixed mortgage interest rate! Alright -- we'll wrap it up there for now, though keep in mind that there is a LOT more in my full market report, which you can download as a PDF here. And -- if you're getting ready to buy or sell -- here are some things to keep in mind... SELLERS -- even though it is a seller's market in just about every 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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Crunching the Numbers on Both Selling AND Buying a House |
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 If you will be selling your home to buy another, there are a lot of numbers floating around....
Above you will see a spreadsheet I put together to help you think about some of these numbers as you are evaluating if and when you will make a move to a new house. In yellow, are all of the inputs you will need to provide, or that you and I can determine together, such as your current payment, your home's current value, your mortgage payoff, whether you will be putting any additional money into the transaction, etc. In green, I have identified your potential future mortgage payment and the net change in your monthly payment. All of the numbers without a background color will automatically calculate for you. Click here to download this worksheet as an editable Excel file. | |
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Is All Showing Feedback Really About Price? |
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 Is All Showing Feedback Really About Price? Maybe. My house is needs many cosmetic updates, but all of the potential buyers (who did not make an offer on my house) didn't complain about price, they complained about the need for cosmetic updates. My house is next to the railroad tracks, but all of the potential buyers (who did not make an offer on my house) didn't complain about price, they complained about the railroad tracks. My house has an unbelievably steep driveway, but all of the potential buyers (who did not make an offer on my house) didn't complain about price, they complained about the steep driveway. Guess what --- unless you're going to flatten the driveway, move the railroad tracks (or the house), or make all of the cosmetic updates -- it really probably is an issue of price! If you're getting consistent feedback about your house that is unrelated to price, in almost all cases, you need to adjust the price to accommodate for that specific issue. If the price is lower then buyers might actually buy despite the specific issue that they were complaining about. | |
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Summer Home Buyers Will Love These Low Mortgage Interest Rates |
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 Interest rates climbed nearly all the way to 5% this past Fall -- and over the past year have been at an average of 4.5%. But since the first of the year, mortgage interest rates have been falling, falling, falling, further and further! They are now, unbelievably at 3.99% for a 30 year mortgage. So - if you're contracting to buy a house in the near future you may want to lock your interest rate in sooner rather than later. It's hard to imagine we'll stay under 4% for long. | |
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March thru May Contracts Strong, Again, in 2019 |
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 March, April and May are always VERY busy months of buyers (and sellers) signing contracts. This year was no exception. As you may recall from last year we had a record-breaking month of contracts in May -- with 171 contracts signed -- the highest number of contracts ever having been signed in any month, ever, in Harrisonburg and Rockingham County. And this May was certainly a bit slower -- with 143 contracts compared to last May's 171. But this April we saw an astonishing 158 contracts -- compared to last April's 128 contracts. So -- in the end, we came up just short of last year when looking at March through May contracts -- with 426 contracts signed compared to 433 last year. Despite low inventory levels, this year is shaping up to be just about as active of a year as last year for our local real estate market. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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