Archive for November 2020
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Area Wide Sale On Houses On Day After Thanksgiving! |
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 No, not really. There is not an area wide sale on houses on the day after Thanksgiving. It's a joke. I mean... other than the fact that yes, most houses for sale today will probably still be for sale on the day after Thanksgiving. ;-) But... Any home seller who has had their home on the market for the past few months without it going contract...
Anyhow - if you're ready to buy a home, this Friday might be a great time to make an offer on a house that has been on the market for a bit and has not yet sold! Happy Thanksgiving, friends! :-) | |
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As A Home Seller, You Are Always Optimizing For Something |
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 What are you optimizing for?
As a home seller, you are always optimizing for something. PRICE - Maybe you are willing to wait as long as it takes to get the price that you want for your house. Even if it takes months longer than you had hoped and even if it means that you aren't able to continue on with other life transitions that you had planned, at least you go the price you wanted. TIME - Maybe it's important to you that you wrap up your home sale (have the house under contract) within a few weeks or within a month. If so, you might be willing to price your home a bit lower to maximize the possibility that you accomplish your timing goals. CONVENIENCE - Maybe your strategy for when you list your home and your pricing strategy all revolve around making it a seamless transition to your next home. You're willing to be flexible on timing and on pricing so long as it lets you accomplish your goals of buying that perfect next home. When your home is on the market, you're always optimizing for something. Be sure you know what you are optimizing for and make sure that is your intention! | |
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Increasing Home Sales Despite Declining Inventory Levels |
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 Fewer homes on the market means that fewer homes are selling, right? Nope, not necessarily. As you can see above, there have been an average of 38% fewer homes on the market (at any given time) this year as compared to two years ago. But there have been 7% more home sales this year than two years ago. So what gives? Basically, these metrics can and often do change independently of each other. Number of homes for sale (inventory) is not the same as number of homes listed for sale. If 100 homes are listed for sale at the start of a month and 5,000 homes are listed for sale during that month, and all 5,000 of them go under contract by the end of that month, then there are still only 100 homes for sale -- but there were 5,000 contracts signed that month! So, if buyers are buying faster than sellers are deciding to put their homes on the market, then this dynamic (sales up, inventory down) can take place. Just because you see that inventory levels are dropping - don't assume that home sales are also declining -- home sales (and prices) are actually on the rise, despite fewer and fewer homes being on the market at any given time. | |
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Homes Usually Go Under Contract More Slowly In The Winter, But Maybe Not This Year? |
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 Usually, things slow down in the winter. Winter of 2017/18...
Winter of 2018/19...
Winter of 2019/20...
As you can see, things usually slow down during the winter in the sense that the days on market (how long it takes for a new listing to go under contract) is higher in those winter months. This year, however, I suspect we're going to see something quite different. I think we will see houses to continue to go under contract quickly as we move through November and December. So, if you are hoping to sell in the next six months -- right now might not be as bad of a time to do so as you might think based on historical norms. Two side notes...
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It Is Hard For Home Buyers To Compete If They Have A Small Downpayment Or If They Need Closing Cost Assistance |
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 A few short years ago...
These days...
A few short years ago...
These days...
So, it's not that you can't buy a home with a small down payment or if you need a closing cost credit -- but it will be a lot harder to do so these days, largely because of other competing buyers who have a larger down payment and/or who do not need a closing cost credit. | |
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Make A Decision About A Home Warranty Purchase After Your Home Inspection |
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 What is a Home Warranty?
A home warranty one-year service agreement that covers the repair or replacement of many major home system components and appliances that typically break down over time due to normal wear and tear. One company that many of my clients have used for a Home Warranty is American Home Shield. They offer several plan options:
If you're buying a brand new home, you likely don't need a Home Warranty. If you're buying a home where the heat pump, appliances and water heater have just been replaced, you probably don't need a Home Warranty. If you're buying anything else, you might want to consider a home warranty. Check out pricing and coverage here. | |
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How High Will You Go When Competing With Other Buyers? |
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 Over the past month I have represented multiple buyers who have made offers on homes where they were competing against anywhere from three to seven other buyers. Given that our market is so high competitive in many locations and price ranges, buyers find themselves facing all sorts of difficulty questions...
The list could go on and on. It's a tough time to be a buyer right now and just because you find a house that you like, and you want to buy, and that you are qualified to buy, and even if you have a lender letter, and even if you see the house on Day 1 and make an offer on Day 1 -- you still might not get the house. There might be someone else who is willing to pay more than you or take more risks than you are, or who has a larger down payment than you have. So, be ready to act fast, and make a strong offer - and be ready to carefully calculate how high you are willing to go on price - but know that you still might not get the house despite your best efforts. | |
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Overbrook Subdivision in McGaheysville, Virginia Slated to Expand To A Total of 230 Homes |
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 Overbrook, a single family and duplex community in McGaheysville, Virginia is expanding. As currently developed - as built homes or platted lots - the neighborhood includes...
The developer is in the process of getting County approval for an additional 125 homes -- some of which will be single family homes and some of which will be duplexes. This will bring the total size of the development to 230 homes. Here's the proposed site plan - where you'll note that the dark green areas are common areas (including a walking trail) and the light green areas are where homes will be built.  | |
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Median Sales Price Increases $23,000. Monthly Payment Increases $3. Wait! What?? |
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 Yes, you read that correctly. Over the past year...
Oh, the magic and mystery of declining mortgage interest rates! :-) Over the past year we have seen a rather rapid increase in home prices. The median sales price in Harrisonburg and Rockingham County one year ago was $217,000. Today, it is $240,000. This is an 11% increase in the median sales price over the course of 12 months which is a much faster than normal increase. And yet, if a buyer finances 80% of the purchase price, their mortgage payment will only be $3 per month higher than it would have been a year ago. Wait! What?? That's all thanks to ridiculously low mortgage interest rates! One year ago the average mortgage interest rate was 3.78%. Today's average mortgage interest rate is 2.81% -- which is 26% lower than the rate from a year ago. So, if you're surprised that a buyer today is willing and able to pay 11% more for a house than they were a year ago -- don't be! Most buyers are financing their home purchases, and thanks to today's low mortgage interest rates, they are still paying basically the same amount as a monthly payment now as they would have been a year ago. Put slightly differently... A year ago, Fred was working in a job that paid him $X per year, which allowed him to afford a mortgage payment of around $1,000 per month, which allowed him to purchase a median priced home of $217,000. Today, Fred's cousin, Ted, is working in a job that pays him $X per year (the same amount as Fred), which allows him to afford a mortgage payment of around $1,000 per month, which allows him to purchase a median priced home of $240,000. Pretty wild. Now, if (when!) those mortgage interest rates start rising -- then the cost of housing will start to increase -- though that's what we generally expect it to do. | |
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Mortgage Interest Rates Will Never Be This Low Again, I Said Countless Times In Recent Years |
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 I've been in this business for 17 years now. When I started, mortgage interest rates were right around 6%, which was amazing, given that they had been up above 8% just three years prior. But then, after major housing market adjustments in 2007 and 2008, mortgage interest rates started dropping. They kept on going down until they were just below 4% in 2012. This was, again, amazing! We then actually saw some ups and downs between 2012 and 2018 -- though rates generally stayed between 3.5% and 4.5%. And where do we find ourselves now? Below 3%! Again, amazing! Current average interest rates are 2.78% -- and I have had clients buy homes this year with fixed rate mortgages as low as 2.5%. If you happen to be buying a home (or investment property) right now you are going to greatly enjoy the low rates that you will be able to lock in for years to come! | |
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Local Home Sales, Prices Hit Record Highs In October 2020 |
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 Happy Veterans Day and an enormous thanks to all who have served our country! Also, Happy November and Happy Thanksgiving! Speaking of thankfulness, we have a lot to be thankful for when it comes to the residential real estate market in Harrisonburg and Rockingham County! Despite all of the twists and turns and ups and downs that 2020 has brought to our lives, the local housing market has remained stable and has even grown stronger over the past ten months. Unfortunately, as with many things in life, this has meant that there have been winners and losers. Home owners and home sellers have done well and have appreciated this strength of and growth in our local housing market. Folks who do not own a home, or who have been unsuccessful in trying to buy a home, and even those who have been successful in buying a home this year are likely a bit less excited about how strong and vibrant our local housing market has been in 2020. All that said, I believe this is the second best type of housing market trend to be seeing locally. Here's how I rank them as far as what is best for us locally...
So, as stated, we're in category two above, which I prefer to three and four if we can't be in category one. :-) Now, after that rather long intro, let's get on to some data, but first, be sure to check out the home featured above, an upscale four bedroom Preston Lake townhouse on the Village Green by visiting 3297BatteryParkPlace.com. OK, finally, unless you're skipping right to PDF of my full monthly report, let's dig into the data...  Quite a few things to note on the market snapshot above...
Interestingly, things do branch out a bit when we look at the City vs. the County...  As shown above, there has been a decline in home sales in the City (-5.58%) while we have seen an increase in the County (+11.63%). Not shown is that the median sales price has increased in both areas -- up 11% in the City and up 9.76% in the County. The decline in City home sales is not for home buyers not trying -- there are plenty of folks who want to buy in the City but there seems to be a shortage of sellers willing to sell. So - did I mention that September and October were a bit surprising?  Take a few seconds to take in what the graph above is showing us. September 2020 home sales (156) were 47% higher than the average of the past three months of September. October 2020 home sales (149) were 35% higher than the average of the past three months of October. So, if the local housing market was unusually slow this Spring due to COVID, this September and October have more than made up for that given these shockingly high months of home sales! Which invites the question of how the year will finish out...  Earlier this year, I thought we were certainly going to see a decline in annual home sales after several years of increases. Not so much. We seem poised to easily surpass last year's pace of 1,324 home sales -- and it seems possible we could even make it to 1,400 home sales this year in Harrisonburg and Rockingham County. Who would have thought!? Here's where I'm getting that "maybe 1400" number...  A few things going on above. First, the orange line, which is showing us the annual pace of home sales, evaluated on a monthly basis. After having risen from 1300-ish to 1350-ish, we fell back down to 1300-ish due to COVID, but the annual pace of home sales has rocketed back upward and is now approaching 1400 sales per year. The green line shows that home values didn't falter a bit despite a temporary slow down in home sales. We have seen steady increases in the annualized median sales price over the last year which has steadily (and quickly) risen from $217K to $240K. That seems like quite a large increase in the median sales price, right?  It is a large increase. Over the past five years the median sales price has increased at an average of 4.6% per year. This year, thus far, we have seen the median sales price increase 8.8% -- almost twice as much as these other recent years. This has been almost entirely fueled by increasing demand for homes, declining inventory levels and declining mortgage interest rates. These changes have made it more and more of a seller's market...  A few things to not and think about, above...
So, given this strong sellers market, are sellers negotiating much?  Nope. The median ratio between the list price and sales price for all homes sold in 2020 has been 100%. What!? Yes, that means that half of homes sold for the list price or more! This has been the least that sellers have negotiated in many, many years - maybe ever. Circling back to those inventory levels one more time...  You'll see that we are seeing some amount of seasonable fluctuation in inventory levels as we did see a slight rise in homes for sale (and not under contract) during the spring months, but we have seen an overall 39% decline in inventory levels over the past year. Inventory levels ticked upward in October 2020, but I doubt that will be a lasting trend. We are likely to see relatively low inventory levels (under 200) even through the remainder of the fall and into and through the winter. Oh, and did I mention that mortgage interest rates are relatively low?  Perhaps absurdly, ridiculously, unexpectedly, historically low would be a better way to describe it. We just finished the fourth month of average 30 year mortgage interest rates being below 3%! This has created some very favorable monthly payment scenarios for buyers this year -- and thus far I'm not getting any sense that we'll see these interest rates rise much in the near future. OK, back to a few (real estate related) areas of thankfulness...
I'll close out with a few key recommendations for buyers and sellers in this crazy-ish market... BUYERS
SELLERS
OK. That's all folks. I hope you have plenty to be thankful for in your world. As always, if I can be of any help to you or your family, please let me know! Reach out anytime by calling/texting me at 540-578-0102 or by dropping me an email at scott@hhtdy.com. | |
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Three Ways To Make A Contingent Offer |
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 If you have to sell your current home in order to buy a new home - there are (at least) three ways to do that...
If you're making an offer on a new-ish listing then Option 1 and Option 2 are not likely to be successful strategies to securing a contract on the house you want to buy. The best bet is to wait until you have your house listed for sale AND under contract - Option 3 - because at that point your have positioned yourself (and your home sale contingency) as best as you possibly can from the seller's perspective. A few additional, related, notes...
Selling and buying simultaneously can be tricky, complicated and frustrating -- but it is possible! Feel free to be in touch if you want to talk through the options outlined above as they pertain to your situation. | |
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November 19 Meeting To Discuss Harrisonburg Comprehensive Housing Assessment and Market Study |
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 Mark your calendars for Thursday, November 19th at 6:00 PM to tune in to hear a presentation of the findings of the initial draft of the City's Comprehensive Housing Assessment and Market Study! From the press release from the City...
Here's how to tune in to this meeting... Watching on a computer or mobile device via GoToWebinar. Register in advance here - Webinar ID: 281-556-371. Calling in to listen by phone at +1 (951) 384-3421, Access Code 484-931-436. Watching the meeting live on Public Education Government Channel 3 | |
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November 2020 Temperatures Assisting Outdoor Gatherings, Local Housing Market |
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 It has been a fantastic week of near 70 degree weather and it looks like those temperatures will hold over the weekend and at least into early next week! There are plenty of upsides to these temperatures... 1. We can keep spending time outdoors in groups instead of indoors, reducing the likelihood of spreading germs. 2. Home sellers can keep getting good work done on the outside of their home to prepare their house for the market. 3. Home buyers can fully explore houses and the lot or land upon which they sit without feeling like they are going to freeze as is often the case in November. Have a terrific weekend! | |
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If You Are Not Getting Offers On Your House, Will You Wait, Or Lower Your Price? |
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 If you are selling your home and it is prepared well and marketed well, you will likely have a decision to make related to time and price... TIME - Are you willing to continue to wait for the right buyer to come along, eventually, hopefully - that will come to a different conclusion about your house than previous buyers who did not make an on your house? PRICE - Are you willing to adjust the list price of your house to try to make it more attractive to potential buyers and to expand the pool of potential buyers who can afford to buy your house? If your home has been on the market for 60 days without an offer -- or if it has been 60 days since your last price reduction -- you should reflect on whether you choose to value time or money more over the forthcoming 60 days. You can always continue to wait for new buyers to enter the market that hopefully will find your house to be just the right fit for them - or you can adjust the price to try to make your house more attractive to buyers who have and who have not yet seen your house. What will you choose if 60 days have passed without an offer on your house? | |
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Missing Out On House After House As A Buyer |
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 Some buyers in this market -- particularly those seeking a home under $250K -- are likely feeling like they are missing out on house after house. It is a tough time to buy a house under $250K and there is a LOT of competition from other buyers. Many buyers are thus finding themselves having to approach each new listing asking themselves how far above the list price they are willing to go for the house they are viewing. A few thoughts... 1. Just because you missed out on ANOTHER house on which you made an offer - that does not necessarily mean that your offers were not reasonable and your offer terms were not strong. It likely just means that some other buyer made an even stronger offer - be that in regards to price or the other terms. 2. If you walk into a new listing and find it to be a near perfect fit for what you are hoping to buy, or a better fit than anything else you have seen, it is reasonable to consider offering a good bit ($5K? $10K? $15K) above the asking price to try to be buyer who gets to but that house. 3. Carefully weight whether you would want to do something like removing your home inspection contingency. If a seller receives two offers of $240K on a $230K house and one buyer will be doing a home inspection and the other will not, the seller is likely to choose the offer without an inspection contingency. You shouldn't necessarily waive the home inspection, but that is likely a way to make your offer more competitive. 4. Don't grow discouraged. Don't give up. Keep trying. It can be depressing to miss out on house after house - but eventually you really will secure a contract on a house. Get out there early to see new listings and make as strong as an offer as you are comfortable making. Best of luck, buyers. It's a tough market out there! | |
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Buyers Kept Showing Up In October 2020 |
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 Who cares about normative seasonal changes in home buying activity... ...this is 2020! :-) Usually, buyer activity (contracts being signed) starts to slow down in October. We usually see around 110 contracts signed during the month of October. But not in October 2020. This year, there were 147 contracts signed! I'll take a full look at market activity in October in the next week or so, but until then, rest assured that buyers keep on buying, even as the weather gets colder and the leaves fall off the trees! | |
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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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