Archive for March 2021
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Should We Let A Buyer Look At Your House Before It Is Listed For Sale? |
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 Q: Should we let a buyer look at your house before it is listed for sale? A: Almost always, no... though it depends on your goals. As you may have heard, there is a shortage of houses available for sale in many/most price ranges in Harrisonburg and Rockingham County. This means that there will probably be a lot of buyer interest in your home when it is listed for sale. During the first few days that your house is listed for sale there are likely to be quite a few showings - many with buyers who have been searching for a home for months and have not been successful in buying a home because of fierce competition from other buyers. Here's why this early rush of eager buyers is great for you as a seller...
All of this happens, though, because your house is simultaneously available to all local buyers and thus they feel the pressure of competing buyer interest. When a seller is preparing their home for sale, they will sometimes hear through a neighbor or co-worker that there is someone interested in their home that would like to come view it before it hits the market. Should you allow for that? In most cases, probably not. Letting a buyer (or buyers) view your home before it is officially on the market might result in that buyer making an offer before your house is on the market, thus not giving you the opportunity to see how much other interest existed. One buyer making an offer without other buyers possibly coming in with their offers simultaneously almost always leads to offer terms that are not as favorable to you. Why would the only buyer to have seen your house (because it is not yet listed for sale) include an escalation clause in their offer? Why would they waive a home inspection? They wouldn't. It's the competition from other buyers that causes them to do so. So, as exciting as it is to hear that someone is interested in your house even before it is listed for sale -- you are almost always going to sell your house with more favorable terms if you list it for sale and expose it to the broad pool of buyers currently in the market to buy. The only exceptions I can think of would be...
So -- if you're getting ready to sell, and you hear from a buyer that they are interested in viewing the house before you list it for sale -- considering telling them "sorry, but no..." and letting them know the date that you anticipate that it will be hitting the market. | |
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Building Lots For Sale in Harrisonburg, Rockingham County |
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 If you aren't finding what you're looking for in a resale home, you could always build a home! Yes, admittedly, construction costs are high right now, but you may want to at least explore your options. The list above shows each of the subdivisions where you can currently buy a building lot in Harrisonburg and Rockingham County. If you are interested in additional details on any of these building lots, just let me know.
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You Can Buy A New Single Family Home Under $300K, Or Even Under $250K |
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 With home prices rising so much over the past few years if you just took a cursory look at the market you might think your only option for a new home under $250K is a townhouse. That's not actually true. In the past year, (20) new single family (detached) homes sold under $250K in Harrisonburg and Rockingham County for less than $250K. Hard to believe isn't it? See them all here. If we expanded that to homes under $300K, we'll find 36 sales! Not interested in what sold over an entire year? Curious about what is currently on the market? There are 40 new homes under $300K that are currently on the market and under contract and 7 new homes currently for sale under $300K. Many of the new homes under $250K are currently found in Brentwood subdivision where a new section just opened up. Many of the new homes between $250K and $300K are in Shady Creek, in Grottoes, where Ryan Homes just started building homes. Now, it should also be noted that some buyers might look at the new homes available under $250K or under $300K and say...
...all of which are valid conclusions -- but just because some buyers won't choose to buy these new homes under $250K or under $300K based on their style, size or location that doesn't mean that they aren't being built -- or that it is not possible to build them. Also, circling back to the beginning -- it is certainly true that you can spend over $250K on a new townhouse -- with the two current obvious examples being Congers Creek and Crescent Ridge. | |
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How To Solve The Housing Inventory Crisis |
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 Here are the top three ways to solve our current housing inventory crisis...
No, but really. Keep reading to find out why... Let's think about it for a moment... here are how there come to be new listings for sale...
So, as you can see, all of these ways in which new listings come about are not likely (in the current market at the current time) to help us dig our way out of our local housing inventory crisis. So, what's the answer? Basically, the only way we will make meaningful progress towards addressing this crisis in housing inventory is if quite a few new homes are built! Here's hoping that area builders will be building some new homes for buyers to buy in 2021 and beyond in Harrisonburg and Rockingham County! | |
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Will My House Really Sell For That Much?? |
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 It's a valid question. You see a few of your neighbors' houses being listed for big bucks -- more than you would have thought. Then, the sign says "UNDER CONTRACT" after just a few days. Wait, what!? Could *that* house really have sold for *that* much? If it did, what would my house sell for?? Many homeowners are surprised these days when they see what buyers are paying for houses on their street or in their neighborhood. It often prompts the question of... "Will my house really sell for that much??" The answer is often, yes, it probably will. Depending on your house and what "that much" is, of course. If you're thinking about selling this spring or summer we will need to be checking in multiple times on sold AND pending sales data. For example, if you will be putting your house on the market on June 1... March (now) - Look for homes that have sold in the past six to twelve months and those that are currently under contract to determine likely market value and to prompt potential pricing strategies. May 20 - Look again at sold data, and homes under contract at that time to again determine likely market value and to finalize our pricing strategy. You'll likely be delighted to see what other buyers have been paying for homes similar to your home -- and yes, that often can and will translate into a delightful sales price for your home as well! | |
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No, The Sellers Probably Will Not Wait For You |
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 I cannot overemphasize the importance of buyers seeing a new listing on the first day (or possibly the second) that a house hits the market for sale. Clear time in your schedule. Take off work. Rearrange childcare. Whatever it takes. Many popular, well prepared, well priced, well marketed new listings are going under contract within days and not weeks or months, often with multiple offers. If the seller already has multiple offers after 48 hours on the market...
So -- given that you likely won't be able to convince the seller to wait to accept an offer until you see it a few days after everybody else -- it would seem that you need to see the house on the first or second day it is on the market! Plan accordingly! | |
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The Harrisonburg Area Real Estate Market Is As Strong As Ever Two Months Into 2021! |
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 Happy Thursday morning to you! It's been a busy week on my end, what with St. Patrick's Day yesterday, and my daughter's 13th birthday the day before (Happy Birthday Emily!) so forgive me for the slight delay in getting the news to you that... The Harrisonburg Area Real Estate Market Is As Strong As Ever Two Months Into 2021! Before I dive into the data below, a few quick links...
Now, on to the data...  As shown above, with St. Patrick's Day green numbers for ya, you'll note that...
So -- more home sales, at higher prices, selling more quickly! Sounds like a good time to be a seller and a bit less exciting of a time to be a buyer! What might develop as we finish out March?  You might notice that the 77 home sales seen in February 2021 was higher than last February (63) but was not the strongest recent month of February home sales. There were 81 home sales back in February 2018. Looking ahead to March, will we see more than 110 home sales close? It seems quite possible! Here's the data stacked up a bit differently...  As shown above, the January + February sales pace during 2021 of 182 home sales is the fastest start we've seen in the past several years. This is a good indication (though not a guarantee) that a relatively strong year of home sales lies ahead of us. You've seen a version of this graph below, but it surprises me again every time I see it...  The orange line (above) is tracking the number of home sales per year -- measured each month. Throughout 2019 and into the beginning of 2020 this was steadily increasing, from just below 1300 to nearly 1400. Then, Covid hit -- and within a few months the annual pace of home sales had dropped back down to 1300 sales per year. That's the downward dip shown above. Then, as we made it into the summer and fall (and winter) of 2020, the pace of home sales picked up incredible momentum, and accelerated beyond where we might have expected it to have been otherwise -- as shown with the dashed red line. All the while, the median sales price just kept on climbing, up to its current level of $247,700 as compared to $222,150 a year ago. So, Covid dealt us two surprises -- a rapid slow down and then a fast and furious rebound!  As noted previously, sales prices are on the rise. The median sales price of all detached homes (not duplexes, townhouses or condos) sold in Harrisonburg and Rockingham County (via the HRAR MLS) rose 12% in 2020 -- from $240,000 up to $269,000. If you bought a home in the past year, you likely paid 5% to 15% more than you would have a year prior. Not as fun for you as a buyer -- though the seller on the other end of your purchase transaction likely thoroughly enjoyed that increase! Looking ahead, again...  While we have seen a significant increase in the annual pace of contracts being signed (1364/year up to 1548/year) the number of contracts signed in February did actually drop off a bit from last year. Admittedly, the January 2021 contracts helped keep the Jan/Feb numbers higher this year than last, but this February did have a bit slower pace of contract signing than I expected. Maybe this smaller number of contracts has something to do with inventory levels??  A year-ish ago I thought it was quite something that we had broken through the 200 mark -- and all of a sudden we were in the 190's as far as the number of homes for sale in all of Harrisonburg and Rockingham County. But now -- we might break through the 100 mark?? A month ago there were 107 homes for sale -- now 106. Please, let's keep it to triple digits -- let's not get down to only 95 or 97 homes for sale!? One of the reasons buyers haven't minded (too terribly) that they were paying higher prices for homes over the past year was because mortgage interest rates were soooooo low...  But now, yes, mortgage interest rates are starting to rise a bit. It doesn't seem likely that they will rise dramatically through 2021, but the lows of being below 2.75% might be (??) behind us for good. OK -- I'll wrap it up there for now. A bit less than a month from now I'll send you another update on where we are a full quarter of the way through the year. My how time flies! Until then... Sellers - Even though the market is hot, you still need to prepare your home well, price it appropriately based on historical sales data and market it thoroughly and professionally. Buyers - Get prequalified for a mortgage, start stalking new listings, go see them on the first day they hit the market, and get ready to compete in a multiple offer situation. Seller / Buyers - If you need to (or want to) sell in order to buy, this will require a bit more strategery :-) than normal. It can be done, but we need a solid plan in place from the start. | |
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All I Want Is A Four Bedroom, Two Bathroom, 2000 SF House Built In The Past 50 Years Just Outside Harrisonburg For Less Than $500K!?! |
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 It doesn't sound like too big of an ask, right? Those are some pretty broad search terms...
But... as many would-be buyers are discovering... there are very few options on the market if you are looking for this type of housing. In fact, today, only one such option... 2021 Russell Drive (feels like it is in the City but is really in the County) Interestingly, PLENTY of such homes sold in the past year. In the past (365) days there have been (63) homes that have sold with the criteria listed above. So, if you're looking to buy this type of house...
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New Listings Will, In Theory, Start to Pop Soon |
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 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. | |
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How Long To Prep Your Home Before Listing It For Sale |
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 Sometimes sellers want to wait until their home is absolutely 100% prepared to go on the market for sale -- or even 102% ready! It's hard to disagree with that in principle -- yes -- let's make sure you get your house 100% ready to go on the market before we put it on the market. But... If it takes (for example) six weeks to get your house 95% ready to go and another eight weeks to get it to 100% ready -- is it worth waiting those two extra months to list your home? Probably not -- unless those two months you are waiting are in the middle of winter when buyer activity would be low and when your home might not show its best based on dead grass, leafless trees, gray skies, etc. A few other points to consider in this regard...
Again, the main point of my ramblings today are...
Finally, a few examples of a 95% complete house...
OK, maybe those got to be somewhat extreme. :-) You get the point. Let's meet sooner rather than later and your house doesn't have to be 100% perfect to be listed for sale and to sell in a timeframe and for a price that is pleasing to you. | |
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Strategic Use Of An AirBNB When Selling Your Home In A Fast Moving Market |
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 OK, first off, the chart above is completely fictional. It is not based on actual showing data, it is based on my general experience of how showings are going these days of popular, well priced homes. I created the (completely fictional) graph to illustrate a concept. Forgive me. ;-) The point of said fictional graph is to call attention to the fact that you are bound to have the most showings per day for your house on the first few days that it is listed for sale. Those are all of the "backlogged buyers" who have been trying to buy for weeks or months and are super anxious to come and see your home immediately and consider making an offer. After those first few days, if your house is not already under contract after having received multiple offers, the number of showings per day is likely to decline significantly to be a slow and steady stream of buyers over time. So, what is a seller to do given this extreme number of showings that are likely to be requested during those first few days... OPTION 1 - Drive all around town, all day, while your house is being shown, wondering which bathrooms in public places might be open during a pandemic... OPTION 2 - Find somewhere else to live for a few days. This might be in an AirBNB, or a friend's house, or a family member's house, etc. The point is, if you can displace yourself for a few days it will allow the maximum number of showings to happen without those scheduled showings being an inconvenience to you. As with all market metrics, your experience may differ based on your price range, location, property type, etc. Before we list your home, let's talk through what we might expect for showings during those first few days and figure out a game plan to keep you sane amongst a possible barrage of requested showings. | |
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First Three Steps Towards Getting Your House On The Market This Spring |
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 It feels like spring time in the Valley this week! I hope you are enjoying the warmer temperatures and perhaps tackling a few outside projects around the house. If you are planning to get your house on the market this spring, here are a few "first steps" to be thinking about... [1] Outside Prep First impressions are important, whether a prospective buyer is driving by to check out your house prior to a showing or driving up your driveway for a showing. Perhaps some trimming and pruning and edging is in order. Fresh mulch always helps. Does your front door (on the trim around it) need fresh paint? How can we make the front of your house show best to entice buyers to walk through the front door? [2] Inside Prep Simplifying, decluttering, cleaning, what else? Sometimes it's removing furniture, sometimes moving it around, and sometimes just removing all the odds and ends that collect on surfaces around your house. We want buyers to focus on the house, not your belongings - so we'll want to simplify to the point that the interior of your home shows its best. Start with the first spaces that a buyer will see upon entering your home, and then the general living areas, and save the closets, garage and unfinished storage spaces until last. [3] Meeting & Talking & Planning Let's meet sooner rather than later to talk about plans for getting your house on the market this spring. I can provide some feedback and insight as it relates to your outside prep and inside prep -- and we can start to talk about timing and pricing. When will you be ready for your house to hit the market, and how should we price your home given recent sales trends. You might think you need to have all of the prep work done before we meet. You don't. I can look past the projects in process so if you're thinking about getting your house on the market in the next few months, it's not too early to start talking about those plans now. I hope you are enjoying these early glimpses of spring time weather as much as I am! | |
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Go Check Your Basement Walls For Cracks |
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 Sometimes during a home inspection, I wish I had a time machine. We'll see a crack in a basement wall -- but we don't know how long it has been that way. The general logic often then goes like this...
Yes, I know, those are sweeping generalizations, but... Because we don't have a time machine, most buyers end up needing to assume that every crack in a basement wall falls into the first category -- recent, and continuing to shift or change, and needing immediate and expensive remediation. But what if today, you installed a crack monitor for your basement wall -- and monitored it quarterly for the next five years -- and then when you were selling your house you could provide documentation that the crack had not changed at all (hopefully) in five years of monitoring... That, my friends, could change the game for a home seller with a crack in their basement wall. So -- check your basement walls for cracks -- and if you have any, consider installing a crack monitor! The photo above is the CRACKMON 4020A Concrete Crack Monitor Kit, which includes three crack monitors and the epoxy adhesive to install them. You can purchase the set for $100 on Amazon and that $100 could be some of the best money you spend on preparing for the future sale of your home if a prospective buyer finds themselves fretting over your cracked basement wall in the future. | |
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Comparing Home Pricing Strategies |
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 Above I have included an overly complicated illustration of an overly simplified comparison of two pricing strategies. A few key points for understanding the graphic above...
So... the two strategies... STRATEGY #1 In this scenario, the seller decides to price their home just barely above market value. If most would agree that a house is worth $315K, then maybe that is pricing it at $319K. Pricing a home so close to (but just above) what you believe to be its market value is likely to (in this market, now) generate a LOT of showings. A fairly priced house in a market with extraordinarily low inventory levels results in a lot of early showing activity. Houses listed for sale with prices very close to their market value also typically see quite a few offers, which leads to the most important differentiation between these two pricing strategies... With so many offers, you are bound to have a buyer or buyers who are willing to go above the asking price, maybe with an escalation clause, maybe with an escalation clause that goes up to a silly/high number, maybe without a home inspection contingency, maybe without an appraisal contingency, maybe cash, etc. You see where I'm going here. The more offers you have, the more likely you are to have an offer (amongst the many) with terms that will be very favorable to you. STRATEGY #2 In this scenario, the seller decides to price the house a good bit above the assumed market value, you know, because the market is strong! If most would agree that a house is worth $315K, then maybe that is pricing it at $329 or $335K. Even if most buyers (and buyer agents) suspect the price is a bit too high, you are likely still to have a good number of showings, though definitely not as many as if you had priced the home closer to its market value. Of the smaller group of buyers who looked at the home, you are likely to have a smaller number who make an offer. You'll have fewer offers because the price is not quite as realistic, and because some buyers will assume you won't come down much on your price since you just listed your home, which leads to that key difference again... Having priced your home a good bit above its market value, you are less likely to have full price offers, less likely to have escalation clauses, less likely to have buyers waive an inspection contingency or appraisal, etc. You will likely still have very good terms as far as price, but not great terms. Again -- this is an oversimplification of how to best price your home -- and every house and segment of the market is different -- but at some point you will need to decide what type of a strategy you will take in pricing your home, as to what results you are hoping to see. | |
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Will Buying A Home This Year Or Next Year Result In The Lowest Mortgage Payment? |
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 If you are hoping to minimize the amount of your monthly mortgage payment, should you buy a house this year? Or next year? Well, as shown above, it depends on whether you think home prices will be higher or lower (or the same) next year -- and whether you think mortgage interest rates will be higher or lower (or the same) next year. Most folks think mortgage interest rates will be higher next year than they are now. If so, it's most likely that you'd be better off buying this year rather than next to have a lower monthly payment. Even if rates continue to be this low, if prices continue to rise (as they seem likely to do) then again, you'll be better off buying this year than next. Since it seems relatively unlikely (highly unlikely?) that interest rates will go down over the next year, the only way you'd have a lower mortgage payment next year than you would now is if mortgage interest rates do NOT rise AND homes prices decline. So -- as to whether you should buy this year or next -- you tell me, based on your best guesses as to what interest rates and home prices will do over the next year. My best guess is that you'll pay more in a monthly payment for a house if you buy next year than you would if you buy this year. Now, all that said, we'll have to somehow secure you a home amidst a competitive market with lots of buyers -- but it's possible! | |
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Low Inventory Levels AND Lots Of Listings |
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 It's an interesting conundrum. Inventory levels are really (really!) low right now, but there are plenty of new listings that will come on the market this month and next month and nearly every month this year. So, how and why does this happen? Well, if there aren't many listings... ...and then a bunch of houses are listed for sale... ...but there are plenty of buyers in the market so that those new listings all go under contract quickly... ...we'll be left with... not many listings. The key factor keeping inventory levels so low right now are an abundant number of buyers in the market -- or trying to get into the market -- to buy a home. So long as that supply of buyers stayed steady and strong, we are likely to continue to see low inventory levels. So, if you are a buyer and are feeling glum about the very few choices you have today... ...be encouraged -- plenty of houses will be listed for sale in the next month or so... ...but maybe (sorry!) also be discouraged -- you will likely be competing with quite a few other buyers for each new listing. | |
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Are Home Prices Only Going Up Because Mortgage Interest Rates Are Going Down? |
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 Disclaimer: I am not an economist. I don't play an economist on TV. Or on this blog. Feedback from actual economists, or accountants, or financial analysts, or wise guys is welcome: scott@hhtdy.com So, are home prices going up because mortgage interest rates are going down? Maybe yes AND no? Yes...
No...
So What...
Why...
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Is It Dangerous To Pay Too Much For A House? |
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 I am going to start with three very important notes:
OK, now, having said that... These days, some buyers are finding themselves in situations where they have to pay a higher price than they'd like to actually secure a contract on a house. For example... When a house is listed for sale for $275K, and everyone thinks it is worth $275K, and there are eight offers on the house within 48 hours, likely at least one of the buyers is going to decide they are willing to pay $280K or $285K for the house, even if it is only worth $275K. So, is this bad? Is this dangerous? Is this foolish? As usual, it depends. There are plenty of ways in which it is not bad or dangerous or foolish for that buyer to pay $285K for a $275K house in order to actually be able to buy a house. Assuming that home values continue to increase, it is only a matter of time (see the graph above) before the home's value matches and then exceeds the price that they paid. Assuming that they don't need to sell the home in the first year or two after they bought it, there is, thus, little danger to them for having overpaid. This (values continue to go up + they don't need to sell soon) seems to be the more likely of the scenarios. There is, of course, a less likely, but more dangerous scenario. If home values stop going up (because mortgage interest rates increase dramatically or because a large local employer shuts down, etc.) or if the buyer (and then homeowner) needs to sell much sooner than they thought -- then, yes, they would regret having paid more than the house was worth to get the house. This (values stop going up + they do need to sell soon) seems to be the less likely of the scenarios. So, should every buyer be willing to pay much more than a house is worth in order to get the house? No, probably not. Should some buyers decide that for some particular houses it is worth paying a bit more than the home's current value in order to actually be able to buy that house? Yes, this seems to be reasonable and have a relatively low likelihood of being dangerous given current market conditions, which, of course, could certainly start to change at any time. | |
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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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