What Would It Take For Home Prices To Decline In Harrisonburg And Rockingham County?


What Would It Take For Home Prices To Decline In Harrisonburg And Rockingham County?
By Scott Rogers • January 9, 2023
I've chatted with several homeowners in the past few weeks who have wondered whether home prices will start to decline in Harrisonburg and Rockingham County in 2023 as a result of slower home sales and higher interest rates. It is certainly possible that home prices will decline in 2023, but here's what I think we would have to see first... [1] Sustained "high" mortgage interest rates. We would likely need to see mortgage interest rates stay above 6% or above 7%. I put "high" in quotes because current mortgage interest rates are simultaneously the highest we've seen in about 15 years, and also are lower than the rates for the 30 years before that. Regardless of the context one chooses, I believe we would need mortgage interest rates to stay above 6% in order to see prices decline in this area. [2] We would need to see buying activity continue to decline. There were fewer home sales in 2022 than in 2021, but only by 7%.... and 2021 will perhaps be seen as an anomaly after we get a few more years down the road. I think we'd need to see about a 20% decline (or more) in buying activity (home sales) in order to see prices meaningfully decline. [3] This one is the most important... we would likely need to see a meaningful increase in supply (inventory levels) in order to see home prices start to decline. So long as there are about the same number of buyers and sellers in the market (or more buyers than sellers in some price ranges) then there won't be much downward pressure on prices. If we get to the point where inventory levels are increasing and there are more sellers than buyers in the market then some sellers will likely start competing on price to attract buyers, which could cause prices to decline. So... will home prices decline in Harrisonburg and Rockingham County? It is certainly possible, but I don't think we can say that it is likely at this point. By April 1st, if we're still seeing high interest rates, if we see a much lower number of home sales compared to last year, and if we see inventory levels starting to climb, then maybe we will see prices flatten out or decline... but we're not seeing it yet. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 22, 2024 (unless otherwise noted).
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