Archive for September 2019
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It Is OK If Your House Is Messy When I Visit For The First Time |
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 All tired out from cleaning your house up prior to meeting with me about possibly selling your house? Don't be! There are plenty of times when I will want your house to be absolutely spotless, 100% organized, de-cluttered, picked up, minimalized (probably not a word), etc. For example...
But did you notice what is not on that list?
Some sellers feel pressure to have their house in absolutely tip top shape before we set up our first time to meet at your house to discuss your house, the market, the selling process, etc. You do not need to feel that pressure. I can look past the way that you (and most people) live everyday life - which is just not quite as 100% polished and put together as when your house is on the market. So -- if you want to get your house all the way to the point where it is ready for photos and showings before you have me over to start a conversation about your potential home sale, that is just fine -- but it is not my expectation that you do so. Talking early and often about selling (When should we list? What should we do before listing? What price expectations should we have?) can be very helpful for most home sellers. | |
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Low Inventory Might Make Buyers Desperate But They Are Not Likely To Wildly Overpay |
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 Inventory levels are low in many price ranges. You have heard it for a while now -- buyers have very few choices under $200K, under $250K and under $300K. For example, in the City of Harrisonburg, here are current options for single family (detached) homes...
But -- just because buyers have very few options, and are sometimes DESPERATE to find a house to buy -- that does not necessarily mean they will wildly overpay. So -- if you have a house that is reasonably valued at $220K -- we should not look at the lack of options between $200K and $250K and decide to list it for $249K. And if you have a house that is reasonably valued at $160K -- we should not look at the lack of options under $200K and decide to list it for $199K. Hopefully you get the point here -- just because buyers don't have very many options of houses to buy that does not mean that they will pay ANY PRICE for a house in an under supplied price range. Your home's asking price still needs to be grounded in the reality of what buyers have recently paid for similar houses. | |
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When To Make An Offer On Your Dream Home If You Also Need To Sell Your House |
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 In summary - not yet. If you need to sell your house in order to buy a new house -- and if your house is not already under contract -- then even if you find your DREAM HOME -- resist the temptation -- do not make an offer yet! If you make an offer on a house with a home sale contingency without your house already being under contract...
So -- if you view your dream home and you are ready to make an offer but have to sell in order to buy -- don't make the offer yet -- instead...
This may sound/seem difficulty or slow or risky or uncertain -- welcome to the world of trying to sell and buy at the same time! :-) But it can be done and I regularly help folks with this. All of the advice above is generalized -- if you are in a situation where you want to buy but you have to sell -- let's chat more specifically about your situation and develop a game plan. | |
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Buying vs Building A Home Over $400K |
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 Most buyers looking to spend over $400K (or certainly those looking over $500K) will also be considering building a new home. Typically, the tension between buying vs building is one of: 1. Goals 2. Money 3. Timing If you build, you can get the house you want, but you'll pay more for it and it will take a lot of time and attention. 1. Goals = Win 2. Money = Lose 3. Timing = Lose If you buy an existing home, you won't get exactly what you want, but you will pay less for the house and the process will not be a drain on your time. 1. Goals = Lose 2. Money = Win 3. Timing = Win Don't let my oversimplification of this issue fool you -- this is something that buyers can get stuck debating for months, or even years, often while looking at resale homes to try to convince themselves to buy instead building. If you are stuck in this quagmire, I'd be happy to meet with you to talk through some of the pros and cons and try to help you come to a decision you'll be pleased with in the short and long term. | |
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Which Side of 81 Do You Live On? |
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 If you have lived in Harrisonburg for a while (more than a few years) which side of I-81 do you live on? The East or the West? Would you consider moving to the other side of I-81? Regardless of which side you are on now, I'm guessing most of you wouldn't flip-flop to the other side. Most people stay on one side of I-81 after they buy on that side -- because they get used to the patterns of life on that side of our community. Nothing is necessarily better or worse on one side or the other -- but they are different, that's for sure. EAST: Most of the residential development over the past 15 to 20 years has been on the East side of Harrisonburg, in the general vicinity of the new hospital. This makes it an exciting place to live -- for some people. There are many newer developments where homes have recently been built, and there are newer commercial destinations (Stone Port, Martin's grocery store, Target, etc) all on the East side of town. But this also makes it a bit more hectic for getting around. Of note, there is also plenty of outbound traffic East of town, towards Massanutten, Elkton, Charlottesville, etc. WEST: There hasn't been as much residential development West of Harrisonburg over the past 15 to 20 years (other than Belmont and Monte Vista Estates) and this is just fine with most people who live on the Western side of Harrisonburg. Things are a bit calmer, without as much hustle and bustle, and in some cases with more established neighborhoods. The towns of Dayton and Bridgewater end up falling into this side of town as well for many people. I am not doing justice to all of the differences between the East side of town and the West side of town, but I believe that most people in this area are oriented towards one side of town or the other, for very specific reasons. Furthermore, most people who have spent any considerable amount of time living on one side of Harrisonburg likely wouldn't think about moving over to the other side of Harrisonburg. So -- if you're just moving to the area -- choose East or West carefully -- you might never switch to the other side! :-) | |
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Are you selling a house listed for more than $400K? |
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 Do you have your house listed for sale over $400K? If so, and the property is in Harrisonburg or Rockingham County you have 81 friends (or competitors??) who also have their homes listed for sale over $400K. And...only 8 buyers are likely to contract on a home each month over the next year based on buyer activity during the past year. So -- 8 of the 82 homes listed for sale over $400K are likely to go under contract in the next 30 days -- and 74 are not. How then, does a seller of a house over $400,000 make their house stand out? How do you best position yourself to be one of the four houses to sell this month?
Bear in mind, of course, that some factors are outside of your control....
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There Are Not Necessarily Always Buyers For All Homes Ready To Buy At All Times |
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 If you are preparing your house well for the market - and pricing it appropriately, according to what other buyers have recently paid for similar houses - and the house is marketed fully and professionally...it should be under contract relatively quickly, and certainly within the first 30 days, right? Well... maybe... Sometimes, it just takes time. In the end, if the right buyer is not in the market right now, then it might not sell until the right buyer is ready to buy - and we shouldn't necessarily expect that the wrong buyer will buy your house just because it is prepared well, priced well and marketed well. Understanding how these dynamics will affect you and your listing is highly related to how many buyers are in your price range -- and in that pool of buyers in your price range, is your house likely to meet the needs of only a few, many or most of the buyers. So, if your home has been on the market for 30 days, or 60 or 90 or 120 or more days -- we should be thinking about...
If the answer is yes, yes and yes -- then we'll be left with two options...
Again - proper preparation, pricing and marketing alone won't sell your house - we also need the right buyer for your home to be in the market to buy at the time when your house is listed for sale! | |
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Home Sales Stable, Median Prices Slowly Rising in Harrisonburg, Rockingham County |
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 Summer might not officially end for another six days, but today has certainly has been a nice taste of the cool Autumn days to come. That said, even if the temperatures are starting to cool down, home sales are not yet ready to do so in our local market. Before we take a look at the most recent market trends, take a few minutes to check out this spacious Colonial in Barrington that is pictured above by visiting 2980BrookshireDrive.com. Now, then, let's get down to some overall market stats...  First above, lots (and not much at all) to observe here...
And how about if we break it down between detached homes (almost all purchased by owner occupants) and attached homes (mostly purchased by owner occupants, but also purchased by investors)...  Here's what we're finding...
And now for that pretty visualization of the month to month ebb and flow of home sales...  Here (above) we note that every summer is different. Last year (blue line) June was a spectacular month for home sales - with 174 closings - more than seen anytime (ever!) in our local area. This year (the red line) June home sales were mediocre at best. But then, July and August home sales were stronger this summer as compared to last year. Looking ahead to September, I anticipate that we're likely to see around 110 home sales - slightly more than the past two years, but not quite as many as back in 2016.  When we pile all of the months on top of each other we can get a clearer view of how the first eight months of this year (Jan-Aug) compares to the first eight months of the past four years. And this is where we find that we have had the best first eight months of anytime in at least the past five years. Given the current trajectory, it seems likely that we'll see at least 1,300 home sales this year.  This graph shows us the overall long term trends in local home sales. The green line is the median sales price which has been creeping its way up over the past year. The orange line shows the annual rate of home sales, which has been hovering around 1,300 home sales for the past year.  Focusing in just on the detached homes, we see that the median sales price has been increasing anywhere from 2% to 7% per year for each of the past four years. This year we are likely to see another increase in the median sales price somewhere in that range.  With steady home sales and increasing sales prices, it's a great time to be a seller. But not as great of a time to be a buyer. As shown above, there have been a relatively stable number of home buyers over the past few years, but the number of homes for sale at any given point has been steadily declining for over three years.  Why do I think we'll see 110 home sales in September? Well, partially because 120 home buyers signed contracts in August. This was a higher rate of contract activity than last August and suggests that sales will continue to be relatively strong as we continue into the Fall.  And here (above) are those overall inventory numbers. The number of homes for sale has been declining over the past year. We used to see much more of an increase in available inventory during the Spring months but this past year buyers were contracting on new listings almost as fast as they were being listed, which kept the inventory levels low.  Here's a startling statistic. Inventory levels have declined 13% over the past year when we look just at detached homes -- but when we look just at attached homes (duplexes, townhouses, condos) we find a shocking 50% decline in the number of homes for sale! It is a tough time to be a first time buyer these days!  Finally, mortgage interest rates. If there is any consolation for today's home buyer it is that their mortgage interest rate is likely to be lower than anytime in the past year or longer. Interest rates have fallen 21% over the past year -- from 4.52% to 3.58%. A few final notes and thoughts for those that made it this far...
That's all for today. Have a delightful, pleasant, cool evening! | |
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Do Detached Or Attached Homes Appreciate More Over Time? |
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 Over the past five years, detached homes have increased more in price (on average, per year) than attached homes (townhouses, duplexes, condos). This wouldn't always be the case if we looked back over the past 20 years -- we could find time periods when this were not true -- but we have seen some larger than normal swings in home values during some of those past 20 years. My general sense (beyond the numbers) is in line with what the graph above shows -- which is that over time (5+ years) both detached and attached homes are likely to increase in value, but detached homes are likely to increase in value a bit more quickly than attached homes. | |
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The 67 Places You Could Build A Home NOT In A Subdivision |
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 Yesterday I was taking a look at the various locations, mostly in subdivisions, where you can buy a lot in Harrisonburg or Rockingham County with public water and sewer, including...
But you don't have to build in a subdivision -- or on a lot with public water and sewer -- and sometimes that's the goal -- to get a bit more land. So, here's a VERY wide look at properties currently for sale in Harrisonburg and Rockingham County *without* public water and sewer that are *not* in subdivisions, priced under $200K... View these 67 (as of today) properties by clicking here. Plenty of folks looking to build homes start to think about it at this time of year -- hoping to acquire a property to start building in the Spring. So, as you start considering a new build -- think about how much land/space/privacy you'd like, whether you'd like to be in a subdivision, whether you'd prefer to have public water and sewer, etc. | |
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Where Might You Build Your New Home? |
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 Where might you build your new home? There are 180 building lots for sale in Harrisonburg and Rockingham with public water and sewer priced under $200K. The list below shows the subdivision / location of the lots. If you're interested in further details about any of these lots or locations, let me know!  | |
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When To Actually Apply For A Mortgage When Buying A Home |
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 As Late As Possible
Incredibly Proactive
A Reasonable Middle Ground
I try to encourage all of my clients to at least be in the "reasonable middle ground" sequence as outlined above. This gives them a firm idea of what they can afford and how a home price will compare to a loan payment. This also allows them to make a stronger offer, already having a pre-qualification letter in hand. I strongly discourage my clients from following the "as late as possible" sequence as outlined above. This doesn't help them make the best decisions about which houses to pursue, how far to negotiate, etc. This also doesn't allow us to make as strong of an offer on a house. Occasionally, one of my clients will fall into the "incredible proactive" sequence as outlined above, and wow, this makes the financing process a joy to work through! These buyers have already done so much of their work with the lender before even thinking about which house to buy -- which then allows them to focus on buying, negotiating, inspecting, etc., rather than be bogged down in the process of securing their mortgage. Let me know if you have questions about how I have described these sequences -- and let me know if you would like a few recommendations for lenders in the Harrisonburg area. | |
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Fewer and Fewer Foreclosures in Harrisonburg, Rockingham County |
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 Here's a reminder of what is a good indicator that our local housing market continues to get healthier over time -- as shown above, the number of foreclosure sales per year has declined over the past several years. To put these into an even larger context:
All in all, it is a good sign for our local housing market when the number of foreclosures per year declines. It means more homeowners are able to stay in their homes, and make their mortgage payments, which is a general sign of a stronger local economy. | |
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How Much Do Your Home Search Criteria Overlap? |
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 If you have three non-negotiable home search criteria, it is important to reflect on (or at least be aware of) how much overlap exists between these criteria. Above are two examples of this way of thinking about your home search.... The first set of buyers will likely have lots of options (large yellow overlap area) because many homes share these criteria:
The second set of buyers will likely have very few options (small yellow overlap area) because there are very few homes that share these criteria:
These are fictitious illustrations -- they don't represent the actual amount of overlap that does or does not exist based on the criteria noted above -- but you should give some thought to how small of an overlap area you are creating for yourself based on what you are defining as non-negotiable in your home search. If that area is too small, you'll have very few options to consider, and eventually you may decide to flex a bit on what you had previously considered to be a non-negotiable point. | |
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Harrisonburg Area Home Sales Over $500K Small But Strong Segment of Local Market |
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 Only 3% of local home buyers spend $500K or more on their home purchase (per sales data over the past year) but this segment of the local housing market has been strong over the past few years. As shown above, there were 40 home sales over $500K last year - more than any time in the past decade. This year we seem to be on track to possibly match that, with 33 home sales over $500K in the first eight-ish months of the year. Reigning in our enthusiasm a bit, though, this is a relatively small number of buyers. If you are selling a home over $500K, you need to keep in mind that only about 40 buyers per year (just over 3 per month) spend that much money on a home in ALL of Harrisonburg and Rockingham County! Let's look a bit further into even smaller segments of the high end local market...  While last year (15 home sales) wasn't quite the strongest year for $600K+ home sales -- this year looks like it will be. We have already -- in eight months -- matched the highest number of $600K+ home sales seen in a year when looking back for 10 years. And one more look at an even higher price point...  Above, you'll see that most years there are only 5 or fewer home sales over $700K. But back in 2015 there were 11 (which was more than double the norm) and this year there have already been 10 such home sales! So -- overall, the high end home sales market is doing well -- comparatively, but that is not to say that selling a home over $500K is an easy task - it's not. Home sellers over $500K are aiming for a tiny pool of potential buyers -- even if that pool of buyers might be slightly stronger this year than last. | |
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Fewer Than 1 In 4 Home Buyers Spend Over $300K in Harrisonburg, Rockingham County |
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 Lots to observe / conclude 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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