Archive for February 2022
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Timing The Sale Of Your Rental Property |
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 Do you own a property in Harrisonburg occupied by a tenant? When you are ready to sell it, how will you go about that process? In the past, many landlords would try to secure a buyer for the home before their tenant moved out -- because they did not want a potential gap of several months without rental income while they waited to see if the rental property would sell. These days, if you'd like to sell your rental property, I'd suggest... 1. Give your tenant a notice of the non-renewal of the lease. 2. Once the tenant moves out, do any necessary minor cleaning or repairs and consider whether it would make sense to paint the interior of the property and/or replace any flooring. 3. List your property for sale. 4. Get overwhelmed by an incredibly high number of showings and likely a multitude of offers. 5. Gleefully select the offer with the most favorable terms and the fewest contingencies. 6. Proceed quickly and smoothly to closing. It won't always go this way -- of course -- but the market is starved (!) for new listings right now, especially in the price range where many tenant occupied properties fall. If you have a rental property that you would consider selling in 2022, let's talk! | |
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Yes, This Is A Great Time To Sell Your Townhouse, or Duplex, In Harrisonburg! |
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 Over the past six months, there have been 90 townhouse sales in the City of Harrisonburg. That's about 15 sales per month. Of those 90 townhouses, 55 of them went under contract within a week of being listed for sale. There are currently 17 townhouses on the market and under contract in the City of Harrisonburg. There is currently... one... townhouse (actually, a duplex) for sale in the City of Harrisonburg, and likely the only reason it is not yet under contract is that it just came on the market yesterday. So... if you own a townhouse or duplex in the City of Harrisonburg and are wondering if this is a good time to sell it... Yes. The answer, quite simply, is yes. | |
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Home Buyers Just Entering The Market Should Despair, Then Rejoice |
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 Blue Line = Despair Orange Line = Rejoice As any buyer in today's market will tell you... there is very little on the market to buy right now. That's the blue line. Over the past 13 years there have been fewer, and fewer, and fewer homes for sale at any given time. But... more homes than ever before (in the past 13 years) sold in the past year, so there are very likely to be plenty of options of houses to buy coming on the market in future weeks and months. That said, they will likely go under contract - quickly - leaving us with low inventory levels all over again. So... would be home buyers... despair only for a moment about the lack of current inventory, and then rejoice that spring is coming and there will likely be plenty of homes to consider purchasing! | |
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Each Year, 10% - 15% Of Home Buyers Pay Cash In Harrisonburg, Rockingham County |
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 How often are home buyers paying cash for their homes in this area? It seems between 10% and 15% of home buyers are doing so each year according to data from the HRAR MLS. When a home sale is reported to the MLS, one of the required details is whether the purchase was made with cash or with financing. As shown above, 2021 feel right in the middle of the pack as far as the portion of home buyers who paid cash for their homes. So, what do you say, will you pay cash for your next home purchase? 😉 | |
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12 Million Dollar Sales In The Past 12 Months |
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 There have been (12) million dollar home sales over the past (12) months in Harrisonburg and Rockingham County as recorded in the HRAR MLS. For context, here ...
So... it turns out there have been twice as many homes sales over a million dollars in the past year than there have been over the entire decade before that! Wow! Explore the past year of million dollar home sales here. | |
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New Homes are an Increasing Share of Total Home Sales in the Harrisonburg Area |
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 First, some raw data... Resale Home Sales:
So, there have been more and more resale homes selling over the past five years. New Home Sales:
There have also been more and more new homes selling over the past five years. The graph at the top, though, tells a third story -- an increasing portion of home sales are new home sales. Between 2017 and 2020 new home sales comprised 12% - 14% of all home sales. Then, in 2021, that jumped up to 19% new home sales. Thus, last year, approximately one in every five homes sold was a new home. This would seem to be good news, generally, as there is an ever increasing number of people who want to buy homes and make Harrisonburg their home -- so we'll need to see more new homes to help provide that housing. | |
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Average 30 Year Mortgage Interest Rate Rises Almost A Full Percentage Point In A Year |
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 About a year ago, on February 11, 2021, the average 30 year fixed mortgage interest rate was 2.73%. A few days ago, on February 10, 2022, the average rate was 3.69%. So, yes, rates are rising, which means mortgage payments are rising for anyone who is not paying cash. In other words, for most home buyers. For example, if you were financing 90% of your $300K purchase...
But if you were buying a $300K home a year ago, given roughly the 10% increase in the median sales price over the past year it would be a $330K home today. So it's really more like...
The cost of housing is certainly increasing rather quickly right now given increasing prices and increasing mortgage interest rates! | |
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Slightly Fewer Home Sales, Much Higher Sales Prices In January 2022 |
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 Happy Snowy Monday Morning! This is my favorite kind of snow... beautiful everywhere... but not sticking to the road...  I hope you stayed warm inside yesterday and that enjoyed the Super Bowl last night. Hopefully your favorite team won... or you enjoyed the commercials... or you enjoyed the half time performance... or you enjoyed spending time with family and friends while partaking in all of the above!? It seems like the year just started, but we're already one eight of the way through the year! Before we get started, two quick links of interest... [1] The beautiful home featured on the cover of this month's market report is located at 471 Flower Drive at the base of Massanutten Resort is and currently for sale. [2] You can download all of the graphs and charts from my monthly report here. Now, onto the data...  We're only looking at data for one month - and the slowest month of the year, so it's hard to draw many conclusions thus far, but here are a few things I am noticing... [1] There were slightly fewer home sales this year (103) than last year (106) during the month of January. [2] The median sales price over the past 12 months was $272,000 which is nearly 11% higher than the median sales price of $246,000 during the 12 months before that. [3] Homes are currently selling (going under contract) very quickly with a median of five days on the market - which is a 37.5% decline from the eight day pace a year ago. It is likely helpful to put this January in the context of other months of January, and other months, generally...  As you can now see, the 103 home sales this January landed right between the 100 sales in January 2020 and the 106 sales in January 2022. So, it was a typical January based on the past few years - though well above the 65 home sales seen in January 2019. Furthermore, we should likely expect to see sales drop in February as they have each of the past two years. January tends to be the second slowest month of the year for home sales with February leading the pack. Once we then head into March we should start to see a steady increase in the monthly pace of home sales. Now, a historical observation that I hadn't noticed until now...  This is one of the graphs I show you most months that allows us to look at how monthly home sales each year are stacking up compared to prior years. It seems the local housing market in 2020 was on par with 2019 all the way through August 2020 -- and then, the pace of home sales took off in the last four months of 2020, and have been accelerating ever since that time! But... maybe the pace of sales is leveling off a bit?  As you can see, the annual pace of home sales accelerated quickly from 1,300 sales per year up to 1,600 sales per year between mid 2020 and mid 2021. Over the past six months, however, the annual pace of home sales seems to have stabilized right around 1,650 sales per year. It will be interesting to see whether this trend continues as we continue through 2022. Now, then, looking at contract activity - which typically precedes the closing of a home sales by 30 to 60 days...  Two things to note about contract activity... [1] Last January we saw 133 buyers and sellers sign contracts to buy and sell houses in Harrisonburg and Rockingham County. This January, only 110 contracts were signed. This means that we will likely see a bit of a drop off in closed sales come February. [2] Looking back at last February and March we should note that we will likely also see a decline in contract activity between January and February before we see a large increase in March. So, expect a continued "slower" pace of market activity for at least the next few weeks before things potentially start accelerating in early or mid March. Another story line to be watching in 2022 is what happens with inventory levels...  Inventory levels have been declining for several years, most notably above through all of 2020. But during 2021, inventory levels remained relatively stable, and did not decline further. Maybe because they can't? There will always be some homes on the market as I don't think we'll get down to only five or ten or twenty five homes for sale. The floor, in this case, might be right around 100 homes for sale. It will be interesting to see whether we continue to see a range of around 95 to 130 homes for sale all year this year like we did last year. Part of the reason why inventory levels don't seem to be able to increase is because homes are going under contract so quickly...  As shown above, 81% of homes that sold in the past year went under contract within 30 days of being listed for sale. Going a bit further, we also see that half of the homes that sold last year went under contract within only FIVE days of being listed for sale given the median of five days on the market. With homes going under contract so quickly, it is not surprising that inventory levels did not manage to increase much through 2021. Here, then, is another visualization of the speed at which homes are going under contract...  As you can see, two years ago the median days on market was 18 days. That median days on market figure then speedily declined through summer 2021 when it hit just five days on the market. Since that time, it has leveled off at five days on the market, calling into question whether it could actually get any faster. As we continue through 2022 I will be monitoring this trend to see if the market seems to be slowing at all. Thus far, it is not. And, yet another story line to be following in 2022...  The average 30 year mortgage interest rate hit an all time low in late 2020 of 2.65%. Average rates closed out 2021 just above 3%, but have now climbed, within a month, to above 3.5% and they have continued to climb during February 2022. As rates increase, a buyer's mortgage payment increases depending on how much of a purchase price they are financing. At some point, rising interest rates will affect housing affordability -- for some buyers buying some houses. We will have to continue to observe this trend through 2022 to see if rising interest rates seem to be affecting the local housing market. So, as described above, there are plenty of possible developing trends in our local housing market. Stay tuned through 2022 to see if the market can and will stay just as strong in 2022 as it was in 2021. If so, it will continue to be a thrilling time for home sellers, and a bit of a challenging time for home buyers. If you are planning to buy a home, or sell a home, in 2022 let's connect soon to start talking about the process, the market and your goals and timing. Just reach out by email, phone or text (540-578-0102) and we can set up a time to meet. Until next time, enjoy the beautiful snow while it lasts -- it looks like temperatures will be starting to warm up come Wednesday! P.S. Happy Valentine's Day! | |
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200 Home Buyers Paid More Than 5% Over Asking Price For Their Homes In The Past Year |
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 Sometimes, you have to be willing to pay the price to get the house... Over the past year-ish (Feb 7, 2021 - Feb 6, 2022) there have been 1,660 home sales in Harrisonburg and Rockingham County. As noted earlier this week, 73% of buyers paid full price or more for their home -- which is 1,229 of those 1,660 home sales. But going a bit further... 200 buyers paid more than 5% over the asking price for the home they purchased in the past year. Looking just at those 200 transactions where buyers paid more than 5% over the asking price... on average, buyers paid $25,561 over the list price! How does that number strike you? It was much higher than I thought it would be... I guess the guy in the photo above is holding out $40,000 of cash -- slightly higher than the average of $25,561 noted above -- sorry for my illustrative exaggeration. ;-) | |
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The Value Of Writing A Fake Offer To Buy A House |
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 OK, OK, don't get too excited -- I'm not suggesting you actually MAKE a fake offer on a house... just WRITE the offer. ;-) ...and here's why... As we roll into March and April we will likely start to see quite a few houses start to hit the market for sale - and you might, finally, find the house of your dreams! When that dream house does come on the market, we'll need to go see it the first day (or second day) that it is on the market - and then you will likely need to make an offer within 12 to 24 hours. So, it's all going to happen rather quickly! When we get to that point, you will have to make a bunch of decisions, quickly... [1] Offering Price? [2] Escalation Clause? [3] Inspection Contingency? [4] Radon Test Contingency? [5] Appraisal Contingency? [6] Closing Timeline? [7] Deposit Amount? ...and more! Now, certainly, the answer to some of these questions will vary based on the property you are pursuing... but it can still be very helpful to talk through these decision points when we are not in the middle of a mad dash of putting an offer together to meet a seller's deadline for submitting an offer. So, if you plan to buy (or hope to buy) this spring, we might consider writing a fake offer to buy a house -- so that we can talk through the different decision points that will exist when we make a real offer on a real house! | |
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What To Do If You Want To Buy A House But Are Discouraged By Current Offerings |
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 Are you trying to buy a house? Are you discouraged by seeing very few options on the market for sale right now? Here are some action items... [1] Be encouraged to know that in 2021, despite inventory levels staying very low all year, more buyers bought than anytime in the past 15 years. So, over the course of weeks and months -- plenty of new listings came on the market, allowing all of those buyers to buy -- despite very few homes being on the market at any given time. So, as we move through 2022, you are likely to see plenty of options coming on the market in the coming weeks and months. [2] Talk to a lender, ASAP if you haven't already. When a new listing of interest does hit the market, you will likely need to see it within a day or two and make an offer shortly thereafter. You'll need a lender prequalification letter to make a reasonably strong offer - so talk to a lender now to have that in hand when the right house does come on the market for sale. If you'd like a recommendation for a few great local lenders, email me. [3] Make a plan for keeping track of new listings. You need to know about new listings and know about them quickly. There are plenty of options out there, including NewListingsInHarrisonburg.com (with an email alert option), Realtor.com, Zillow, and many others. I can also set up a few saved searches on my end to be watching for the types of houses that would be of interest to you -- so feel free to email me with details of what you'd like to buy. [4] Go view new listings that are almost perfect. As new listings hit the market, some will seem to be close to what you'd like to buy -- but not quite perfect. Go see these houses anyhow. You might be pleasantly surprised that what seemed to be an "almost" house is a "perfect enough" house when you see it in person. If you see a house and conclude that it really is off the market, as you had anticipated, you will at least have further established a context for what you want to buy -- and how much you will likely need to pay for such a house. [5] It sort of goes without saying... but you'll likely be most successful in your home buying quest if you are working with a Realtor. Whether that's me, or another agent, engage a Realtor for assistance with the home search and home buying process! | |
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74% of Homes Sold for Full Price or Higher in the Past 12 Months! |
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 A somewhat shockingly high number of homes sold at or above asking price over the past year...
So, what does that mean for you if you are selling or buying in 2022? SELLERS: If you want to sell for $400K, you likely don't need to list your home for $420K in order to leave yourself room to negotiate down on price. Listing it for $400K will likely do the trick, and might result in the house selling for more than $400K. BUYERS: Understand that you are likely to need to pay full price or higher for the house you plan to buy -- though that needs to be put in the context of the value of the home. Certainly, if a $400K house is listed for sale for $475K then you shouldn't pay full price or higher... Understanding the local real estate market is more important than ever for buyers and sellers in 2022! | |
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156 Apartments Proposed at The Edge in Harrisonburg on East Market Street |
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 The developer of The Colonnade (intersection of E Gay St and Mason St) and Preston Lake Apartments (still under construction adjacent to Preston Lake) is requesting a rezoning to allow them to build 156 apartments in the City of Harrisonburg on East Market Street across from Ciro's. This development would tie in the the eastern end of Franklin Street (which is not directly connected to the main portion of Franklin Street that you're likely thinking about) to East Market Street. Portions of the property are currently zoned B-2 (for business) and portions are zoned R-2 (for lower density residential development) but the developer would like all of it to be rezoned R-5 to allow or this high density residential development. They are also then requesting a special use permit to build apartments in buildings with more than 12 apartments per building. They plan to build 156 apartments in eight buildings -- so almost 20 apartments per building. A few details of note from the proposal...
The City of Harrisonburg Planning Commission will consider this proposed rezoning and special use permit on Wednesday, February 9th. City staff recommends approving the request with a few conditions. You can download all of the related documents here. | |
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73% Of Homes Being Planned or Proposed for the City of Harrisonburg Are... Apartments! |
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 There are lots of new residential communities being planned, discussed or proposed in the City of Harrisonburg. As shown above, most will be apartments. Below is a brief overview of planned or proposed residential housing developments in the City of Harrisonburg. Keep in mind that some of these proposals are quite recent and some have been around as possible developments for quite a few years. It is uncertain or when any of these will actually take shape and be developed.
Did I miss anything? What should be added to the list, updated on the list or removed from the list? You can find more details about most of these developments (and about many in Rockingham County) in list form here and map form here. | |
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Where Were New Homes Built In 2021? |
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 Quite a few new homes were built in Harrisonburg and Rockingham County in 2021, contributing to the increase in overall sales in 2021. Above you will find the nine neighborhoods where five or more new homes were built/sold in 2021 as per the HRAR MLS. South Peak (52) - duplexes in McGaheysville, built by Ryan Homes, now sold out Shady Creek (39) - single family homes and townhomes in Grottoes, built by Ryan Homes, still being built and sold Brentwood (32) - single family homes just outside the City, still being built and sold Preston Lake (31) - single family homes, duplexes and townhomes being built just outside the City, still being built and sold Crescent Ridge (29) - townhomes just outside the City, still being built and sold Sunset Springs (27) - single family homes in Broadway Congers Creek (26) - townhomes just outside the City, still being built and sold Bridgewater Fields (11) - townhomes in Bridgewater, still being built and sold Founders Way (9) - condos in Harrisonburg, now sold out | |
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Where Are New Homes Being Built? |
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 OK, this is surprised me a bit. Before I pulled the data, I assumed more new homes were being built in Rockingham County than in the City of Harrisonburg... but wow... this was much more extreme of a difference than I had anticipated. As shown above, during 2021 there were 284 homes in Harrisonburg and Rockingham County per the HRAR MLS. Of those...
So... 96% of all new homes are being built in the County right now! Did this surprise you? :-) | |
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January 2022 Home Sales, Like the Temperature, A Bit Cooler Than 2020, 2021 |
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 I'm sure a few more January home sales will still show up in the data before I put my market report together, but a first look at January home sales in Harrisonburg and Rockingham County indicates that the pace of home sales cooled a bit (like the temperatures) this January as compared to the last to months of January. Before the COVID surge (of home sales) we were often seeing 60 to 70 home sales in January, but there were more than 100 home sales in Harrisonburg and Rockingham during January of 2020 and 2021! Stay tuned for a full report of January home sales later this month, but it seems they will have dropped off a bit from last January. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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