Archive for December 2023
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Median Sales Price In A Larger (Longer) Context |
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 The graph above tracks the median sales price each year for the past 20+ years in Harrisonburg and Rockingham County based on home sales recorded in the HRAR MLS. You'll note that... [1] Home prices increased rapidly (more than 10% per year) between 2004 and 2006. [2] Home prices then stayed relatively level for just over a decade, 2006 through 2016) with a few years of declines and a few years of increases. [3] Home prices started to climb again, though at a pace of less than 10% per year between 2015 and 2020. [4] Home prices have increased by 10% per year or more for each of the past three years, between 2021 and 2023. What are your predictions for what we will see over the next few years? | |
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Will Your New Years Resolution Be To Buy A House? |
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 For whatever reason, the close of one year and the start of a new year cause many of us to pause and reflect on the big picture. What do we hope will remain the same in the new year? What do we hope to change in the new year? If you are considering a home purchase in the new year, here's one bit of welcome news... Mortgage interest rates have been falling steadily for the past eight weeks! In October, the average 30 year fixed mortgage interest rate peaked at 7.79%. Since that time, they have dropped all the way down to 6.67%. Rates actually started the year (Jan 2023) at 6.48% -- so we're closing out the year a touch higher than that, but things are headed in the right direction. It definitely seems possible that we'll see mortgage interest rates between 6% and 6.5% some time in the first few months of 2024. So, if your new years resolution is to buy a home, let's set up a time to meet to discuss the process and the market -- and you should talk to a lender sooner rather than later to get prequalified for a mortgage. | |
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Home Buyers Are Signing More Contracts This December Than Last |
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 Perhaps it is a result of mortgage interesting rates starting to decline. Perhaps it is a result of what homes happen to be offered for sale right now. Perhaps it is a result of growing confidence that the economy is not headed towards a recession. Whatever the reason... ...contract activity is quite a bit higher (74 contracts) this December as compared to last December (50 contracts) when looking at contracts being signed in the first 20 days of the month. | |
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New Indoor Recreation Facility, Crossroads Field House, Being Built At Rockingham Park |
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 A new, $13.5 million, indoor recreation facility is being built at Rockingham Park and is estimated to be complete by the end of 2025.  The facility will be called Crossroads Field House and will include:
In 2019, Rockingham County increased its transient occupancy tax from 2% to 5%. The new/extra 3% of tax revenue from spending by people visiting our area to be used for tourism related investments. Read more about Crossroads Field House in the Daily News Record here... Contractors Break Ground For Indoor Recreation Center At Rockingham Park | |
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94 New City Townhomes Proposed On Pear Street In Cobblers Valley, Zephyr Hill |
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 Ryan Homes is in the process of developing a neighborhood called Cobblers Valley, on Pear Street, in Rockingham County. The portion of the development to be built in Rockingham County is intended to include:
There is also a small portion of the development that will exist in the City of Harrisonburg, to include 32 townhomes, highlighted in purple above. A new rezoning to go before the Planning Commission this evening would allow for an additional 21 townhouses, highlighted in blue above. A second rezoning to go before the Planning Commission this evening would allow for an additional 41 townhomes, highlighted in red/orange above. My understanding is that the 53 townhomes (32 +21) would be a part of Cobblers Valley, but that the 41 townhomes would be a separate development, called Zephyr Hill, which already includes 55 planned townhomes. View City documents related to the rezoning and special use permit requests here (21 townhomes) and here (41 townhomes).  | |
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Proposed Expansion Of Student Housing Complex, 865 East, To Include 60 More Apartments For A Total Of 160 |
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 The student housing development at the corner of Port Republic Road and Devon Lane -- 865 East -- may be expanding in the near future. The owner has requested that the City rezone the property and provide a special use permit to allow for an expansion of this mixed use property. 865 East currently features 100 apartments and retail on the ground level. The proposed addition would include 60 more apartments connected to the first building via an elevated breezeway. Here is the potential layout of the addition...  Here's a slightly larger view of the potential new profile of the building and addition, connected by an elevated breezeway...  The Planning Commission reviewed this request earlier this week (details here) and they recommended that City Council approve the rezoning and special use permit to allow for this expansion of 865 East. | |
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Despite Fewer Home Sales, We Are Seeing Higher Prices, And Recently, More Contracts And Lower Inventory Levels |
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 Happy Friday afternoon, Friends! I hope that your week has gone well and that you are looking forward to the next few weeks - presumably with some holiday celebrations, rest, relaxation and time with family and friends! Whether you are staying here or traveling afar, I hope it is a fulfilling and meaningful time for you and that you are able to spend some time with your loved ones! Before I dive into the housing data, I'd like to invite you to join me at a fun concert in January. The Steel Wheels are putting on an album release show with special guest Lindsay Lou on Saturday, January 20th at 7:00 PM in JMU's Wilson Hall. You can buy tickets online from JMU here, or... click here to enter to win the pair of free tickets I'm giving away! Regardless of whether you win the pair of free tickets, or buy your own tickets, I hope to see you in Wilson Hall in January to hear The Steel Wheels and Lindsay Lou! And now, on to the housing data and trends in our local market, starting with a few key indicators for our overall market...  A few observations related to the data above... [1] Looking just at November sales data, we see a striking year over decline from 2021 through 2022 to 2023 when examining the number of homes that are selling each November. Two years ago there were 138 November home sales... last year only 93... and this year just 69 home sales in November. While it's only one month of sales data, that is a 50% decline over the past two years. It was a particularly slow November. :-) [2] When looking at the first eleven months of the year (the year is almost over!?) we see that there have been 25% fewer home sales this year (1,117 in 2023) as compared to last year (1,482 in 2022) in Harrisonburg and Rockingham County. It was markedly slower year this year than last. [3] Despite fewer home sales taking place this year, home prices keep on rising. The median sales price of all homes sold in the first eleven months of last year was $299,900... and this year it was 10% higher at $330,000. So, fewer home sales, but higher prices. Next up, one particular segment of our local market that has seen a particularly striking change... the City of Harrisonburg...  I suppose I should have highlighted one other bit of data on data table above -- the first row. Pretend it is highlighted too... [1] With only 13 home sales in the City of Harrisonburg this November, we have seen a 52% decline compared to last year and a 72% decline as compared to two Novembers ago. Again, this is just one month, but still. If you want to buy a home in the City of Harrisonburg, it has been a tough time to try to do so. Very few homes are selling in the City. [2] A few lines down in the data table you'll see I have highlighted the data for the past six months. Over the past six months of this year we have seen 145 home sales in the City... compared to 296 in the same six months two years ago. Again, a rather striking decline... of 52% over two years. As I alluded to above, this is mainly a supply issue... there aren't enough sellers willing to sell this year to allow the same number of City home sales to take place. [3] In that same two year period I have referenced above, the median sales price of a home sold in the City has increased from $230,000 to $295,500! That is a 28% increase in the price of homes selling in the City... over a span of just two years. Now, let's look at existing home sales only (excluding new home sales) to contextualize the 10% increase in home sales prices in the overall market that I referenced earlier...  All the way at the bottom of the data table above you'll note that when we look at the median sales price of existing homes only, it has risen by only 6% over the past year, not 10%. What does this mean? [1] The value of existing homes has not necessarily risen 10% over the past year in Harrisonburg and Rockingham County as was suggested when looking at the entire market of existing and new home sales. Existing homes (resale homes) prices have only actually increased by 6% over the past year. [2] The increases in new home sales prices over the past year, and the number of new versus existing home sales, have combined to drive the overall median sales price of all homes (new and existing) up 10% over the past year. Let's simplify things... for all you homeowners out there... [1] Don't assume that your home has increased in value by 10% over the past year, because the existing home median sales price has only increased by 6% over the past year. [2] Don't assume that your home has increased in value by 6% over the past year. It might have. Or, that increase might be somewhat larger, or somewhat smaller. The change in the median sales price is a general indicator of changes in the overall market, not a specific indicator that each and every home in a market area has shared that same change in value. Now, let's reflect on a moment on what a slooooooowwww November it was as far as the number of homes selling in Harrisonburg and Rockingham County...  There were fewer home sales in Harrisonburg and Rockingham County in November 2023 than in any other month in 2023... and fewer than in any month in 2022... and fewer than in any month in 2021. But, keep on reading for some signs that perhaps we are seeing a slight reversal of this slow down. First, here's that downward ski slope (blue) of the number of homes are selling in a year's time in Harrisonburg and Rockingham County...  The annual pace of home sales in the City + County has now declined to 1,205 home sales... which is the slowest annual rate of home sales in over five years! But yet, as we have seen for quite some time now... fewer home sales is not causing home prices to also start declining... in fact, the further home sales have declined, the higher sales prices have increased! These two trends are an indicator that while there are certainly fewer buyers buying, it is likely at least partly a result of fewer sellers being willing to sell. If we were seeing a decline in buyer interest and we were seeing the same number of sellers wanting to sell, then we could more reasonably think home prices might start to decline -- but that's not where we are right now in the local housing market. Let's say you sold your house in 2019 and left town and decided to move back just four years later in 2023. Oof. Here's what you'd find...  When you (the imaginary you) left town in 2019 the median sales price of homes in Harrisonburg and Rockingham County was only $223,000. Now... just four years later, that median sales price has shot upwards to $330,000. That is a $107K increase in just four years. This is yet another view into some tricky timing aspects of when folks bought or didn't buy a home in this area... [1] If you bought your home in 2020 or prior, and still own it, you're in great shape. You likely paid much less for your home than it is worth now and you likely have a very low mortgage interest rate. [2] If you bought your home in 2021 or 2022, you're likely still in great shape as to how much your home value has increased, and you might have a great mortgage interest rate or not quite as great. [3] If you didn't buy a home and are working on buying one now, you are buying at the highest prices we have seen lately (until 2024 prices) and at higher mortgage interest rates than we've seen in over a decade. If you are thinking about buying a home right now, does #3 above make you want to pause and think twice before buying? If you don't buy in 2023 (yes, I know there are only 16 days left) you'll likely be paying an ever higher price in 2024 or 2025. This is not to say that everyone should buy a home right away, but many buyers who have been waiting to buy for the past few years because prices were increasing (and they hoped they would decline) likely wish they had gone ahead and bought last year, earlier this year, etc. One of the other metrics I follow is how many new versus existing homes are selling, and we have seen a bit of a shift in this break down in 2023...  Last year, in 2022, we saw a decline in existing home sales compared to 2021... but new home sales kept on rising. Not so in 2023. When comparing this year (2023) to last year (2022) we see that existing home sales have declined... and new home sales have declined as well. We have also seen *the highest* mortgage interest rates in many (many!) years in 2023, which is likely a major contributor to this slow down in both existing and new home sales. But... what follows are a few slight changes in direction in our local market as of the past month...  Monthly contract activity in 2023 (red line above) has been below 2022 (blue line) more often than not over the past six months, but in November... contract activity rose above where it was last November. Hmmm... why could that be... I wonder if mortgage interest rates started to decline from their 20+ year peak? And how about the number of homes that are under contract in total...  As shown above, we saw a big jump in the number of pending (under contract) homes through the month of November. There are 262 homes under contract right now, compared to only 201 a year ago. This is a significant improvement from last month when we were even with the prior year, and an even more significant improvement from the prior six (plus) months when pending home sales were lagging significantly behind last year. Hmmm... why could that be... I wonder if mortgage interest rates started to decline from their 20+ year peak? Next up (before we get to mortgage interest rates) let's look at inventory levels...  After four months of big increases in inventory levels in Harrisonburg and Rockingham County -- from 131 homes for sale up to 230 homes for sale -- we have now seen inventory levels start to decline again. Perhaps this is a result of more contract activity (causing inventory levels to drop as homes go under contract) or perhaps it is fewer sellers putting their home on the market during the holidays -- but regardless, November showed at least a temporary reversal in the trend of increasing inventory levels. Now, then, how about those mortgage interest rates...  Indeed, mortgage interest rates are dropping. At this point it seems rates peaked at 7.79% at the end of October. Since that time, as shown, they dropped to 7.22%. Since the end of November, not shown, they have dropped even further... to 6.95%. Certainly, the three years or so when rates stayed below 4% were *not* normal times... and rates below 4% were *not* normal -- but it's been tough for many would be home buyers to afford a home (or to rationalize paying the requisite mortgage payment) over the past year with mortgage interest rates above 6%, and for quite a few months over 7%. The pace of sales slowed the most in Harrisonburg and Rockingham County over the past few months with mortgage interest rates over 7%. The news that they have now broken back down through that barrier to six-point-something is welcome news for home buyers as we head towards 2024. I'll wrap things up there for now, though if you want even more charts and graphs you can review them all here. At this point in our local housing market, we're mostly looking ahead towards 2024, so here are a few thoughts for a variety of positions you might find yourself in... If your home is on the market now but not under contract... You may very well find renewed interest from buyers after the first of the year, especially with slightly lower mortgage interest rates -- but you should make sure your home is priced appropriately. If a price reduction is in order, it might make sense to wait until just after January 1 to make that change since there will be less buyer activity than normal over the next few weeks. If you plan to sell your home in 2024... Let's chat sooner rather than later about pricing, preparation and timing. It's not enough any longer to simply whisper "I'm selling" out your front door to bring on the throngs of eager buyers with 3% mortgage interest rates. We'll want to make sure to price your home appropriately, prepare it well to show best to buyers and market it thoroughly from day one but knowing that the marketing may need to continue on for a few weeks or more. If you plan to buy a home in 2024... It seems very likely that you'll be financing your purchase with a lower mortgage interest rate than would have been available to you over the past few months, which is good news. That said, with home prices continuing to climb, your projected monthly payment might still be higher than you prefer. It's important to talk to a lender early in the process to understand how much you could spend and to consider how much you want to spend on your next home. If you own a home and don't plan to sell it anytime soon... Enjoy your likely increasing home value and your likely low mortgage interest rate. It's been a great few years to own a home... a much better than average, much better than normal, few years! And for any and all of you... if I can be of help to you related to real estate, or otherwise, don't hesitate to reach out. You can contact me most easily at 540-578-0102 (call/text) or by email here. I hope you and your family have a wonderful holiday season and I look forward to connecting with you in 2024! | |
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Tuscan Village, A New Community To Include 57 Townhomes, 54 Apartments, 2 Single Family Homes, Proposed Near Intersection Of Keezletown Road and Country Club Road |
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 The Harrisonburg Planning Commission considered a request last evening for a new community proposed to be built near the intersection of Keezletown Road and Country Club Road. This potential new community would feature 57 townhomes and 54 apartments and would be developed by Scripture Communities, the builder/developer who has also developed Stone Spring Village, Avalon Woods, Heritage Estates, Liberty Square, The Glen at Cross Keys, The Townes at Bluestone, and is currently developing The Townes at Congers Creek. Of note - I represent this builder/developer and have been involved in the planning of this potential new community. The architectural inspiration for this new community comes from the stone and stucco of Italy and the builder plans to incorporate these elements into the exterior of all of the townhomes and apartments. Below are two renderings of the plans for the townhome section of the neighborhood...   A few other items to note about this potential new community in the City of Harrisonburg...
Multiple people spoke in favor of this request at the Planning Commission and a few others raised concerns. The concerns that were raised were primarily related to traffic on the roads adjacent to the potential new community -- and stormwater management. The developer will be responsible for ensuring that the development does not create additional stormwater coming off the site to neighboring properties -- and the City has future plans to improve both adjacent roads, though they are not yet funded. City planning staff recommended that the rezoning request (and other releated requests) be approved and the Planning Commission unanimously voted to recommend that City Council approve the requests to allow for this development to move forward. City Council will review this request in January. | |
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47 Home Sellers Reduced Their List Price In The Past 30 Days And 15 Of Those Listings Are Now Under Contract |
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 One indication that our local housing market isn't quite as overheated as it used to be is that we are starting to see sellers making price adjustments. For a few years there, nearly every home listed for sale went under contract in a matter of days, often with multiple offers and escalation clauses. Now, many (most) listings are still going under contract quickly -- but plenty of sellers are finding themselves needing to make a price adjustment to generate enough buyer interest to have an offer to consider. As a snapshot of those price reductions and their impact... Over the past 30 days... we have seen price changes on 47 homes in Harrisonburg and Rockingham County... and 15 of the homes are now under contract. If your home is listed for sale and 30 (or more) days have passed without an offer, you may also be considering adjusting the price... and that new price may attract enough additional buyer interest to generate an offer for you to consider. | |
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Ho, Ho, Ho, Is Santa Bringing Lower Mortgage Interest Rates For Christmas? |
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 We'll see where the remainder of December takes things, but mortgage interest rates on 30 year fixed rate mortgages have been dropping steadily for the past four weeks. They were all the way up to a peak of 7.79% back in late October. This past week they were all the way back down to 7.03%. Will we see 6 point something before Christmas? | |
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OK, False Alarm, Most Homes Are Still Selling Very Quickly |
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 Yesterday I took a look at a very small data set (homes going under contract the week prior) and noticed that new homes were selling very quickly and resale homes were not... Median Days On Market For Listings Going Under Contract In The Past Week: All (44) Homes = median of 6 days (22) New Homes = median of 0 days As a result, I decided to dig deeper into the data to see if the (somewhat artificially) low days on market for new homes was obscuring a more significant upward shift in median days on market for resale homes. And... as shown above... the new home data doesn't seem to be obscuring much. Blue Line = All Homes (new and resale) Orange Line = Resale Homes As you can see, these two trends tend to track pretty closely together over time. As such... disregard any hasty conclusions you or I drew yesterday about resale homes selling much more slowly than new homes. Yes... there are some resale homes that are taking quite a while to sell... but for the most part, resale homes continue to sell very quickly. | |
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How Quickly Are Homes Selling These Days? |
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 First disclaimer -- the graph above is based on a very small sample size -- I'm just looking at the homes that have gone under contract in the past week. Second disclaimer -- the graph above only looks at contracts signed on resale homes, not new homes. What does this graph show? Of the 22 resales homes that went under contract in Harrisonburg and Rockingham County over the past week... over half took more than a month to go under contract. Only 3 (of the 22) went under contract within a week. But wait, I thought homes were going under contract much more quickly than that!? Yes, indeed, I did think that. Here's what I have discovered looking just at this one week of data, which I'll explore a bit more broadly in the near future... Median Days On Market For Listings Going Under Contract In The Past Week: All (44) Homes = median of 6 days (22) New Homes = median of 0 days (22) Resale Homes = median of 38 days Wait.... what!!? Indeed, for a while now I have been observing a median days on market of six days in our market. But... [1] We are seeing an increasing number of new home sales in our market. [2] Many or most of those new homes are being built by Ryan Homes. [3] Ryan Homes appears to be waiting to list many homes in the MLS until they are already under contract, resulting in a "days on market" of zero for those homes intended to be built. And thus, the long standing 6 (or so) day median of how quickly homes were going under contract may have been a data set significantly skewed by how one new home builder is managing their listing data. I'll start working my way backwards here soon to evaluate median days on market ONLY of resale homes to try to provide a clearer picture of what the data actually shows about the pace of sales in our local market. Stay tuned. | |
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Middleburg at Stone Spring, To Include Up To 500 Apartments, Proposed Adjacent To The Reserve At Stoneport |
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 A developer out of Vienna is proposing that the 31.5 acre parcel shown above be rezoned from A-2 (agricultural) to PMF (Planned Multi-Family) to allow for the construction of 500 apartments in two phases adjacent to The Reserve at Stoneport. Phase 1 would include no more than 300 garden-style apartments in the larger buildings shown below with 30 apartments per building. Phase 2 would include no more than 200 townhome-style apartments shown as the permitted to be smaller clusters of buildings below with four to eight townhouse style apartments per building. Here's the full proposed site plan...  A common question when it comes to new developments is the impact on schools. Per Rockingham County calculations, this development is estimated to generate an additional 31 students at Peak View Elementary, 18 students at Montevideo Middle School and 22 students at Spotswood High School. The Rockingham County Planning Commission recommended denial of the rezoning request on November 8, 2023. The Board of Supervisors tabled the rezoning request in their meeting on November 15, 2023. This request will likely be reviewed again by the Board of Supervisors in the near future. Download the full rezoning application packet including a larger site plan here. | |
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A Rough Two Years For Rising Mortgage Interest Rates |
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 Mortgage interest rates have been declining on a weekly basis over the past month, but... let's not forget exactly where we are relative to the past 30, 40 and 50 years... The graph above shows the amount that the average 30 year mortgage interest rate changed from year to year. All of the red bars are showing years when the average mortgage interest rate increased as compared to the prior year. For example... Between 2003 and 2004 it didn't really change at all.. it increased by 0.01%. Between 2008 and 2009 it dropped 0.99%. But more recently... Between 2021 and 2022 it increased by 2.39%. Between 2022 and 2023 it has increased by 1.46%. So, it has been a rough two years of increasing mortgage interest rates... with the 2022 and 2023 increases being some of the largest increase in the annual average, ever, only surpassed by 1979, 1980 and 1981. Let's hope for a blue bar in 2024 with a decline in the average mortgage interest rate as compared to 2023. | |
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Home Buying Activity Will Slow But Not Stop Over The Winter |
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 Generally speaking, folks don't use their outdoor hose spigots in the winter. I suppose you might use it from time to time, but it's just not as fun to wash your car in the driveway on most December days. Oh, and if you did use your hose spigot, and left the hose attached, you'd potentially have serious problems when the water in the hose freezes, backs up into the spigot, maybe into the pipe, and something splits, cracks or bursts. As such... Once we get into Winter, most folks are turning off their hose spigots for the last time until Spring. But... Not so with the local housing marketing. Looking back over the past five years... Between March and August (Spring and Summer, as we'll call it) an average of 140 buyers signed contracts to buy houses each month. A pretty rapid pace of buyer activity. So, this winter, what should we expect? Will that supply of buyers be turned off like a hose spigot, and will the buyers slowly drip out at a rate of (for example) 10 - 15 buyers per month? Nope! Looking at last Winter (December, January, February) there were an average of... 95 buyers signing contracts per month! Yes, you read that correctly, we only saw a 32% decline in buyer activity during the Winter months -- as compared to the Spring and Summer months. So, unlike your hose spigot, which will likely be barely used during the Winter -- the local housing market doesn't slow down, or cool down, or shut down, nearly as much. | |
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Demand Is Likely To Keep On Rising For Contractors And Home Renovators |
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 We seem likely to see a continued increase in demand for contractors and home renovators in Harrisonburg and Rockingham County in 2024. If you're thinking about getting into the home renovation and repair business -- this might be your time! There are two main factors that seem to be creating this increased demand for home renovation professionals... 1. Higher mortgage interest rates are causing plenty of homeowners to decide to stay and upgrade rather than sell and buy. If you bought a home a few years ago and have a 3.5% mortgage interest rate, you aren't likely to sell your home and buy a new one with a 7% mortgage interest rate just to get that one extra room, or nicer interior finishes, or larger back deck. You're much more likely to stay in your very nice home -- with a very, very nice mortgage interest rate -- and hire a home renovation professional to help you add a deck, finish a room in the basement, update your interior paint or flooring, and on and on. 2. The several year period of having multiple offers on every new listing within days (or hours) seems to have drawn to a close. During those years, home sellers often didn't need to make many updates to the condition of their home before selling it. Now, with the possibility that your home won't go under contract within five minutes, many sellers are evaluating whether to have some repairs or upgrades completed prior to listing their homes for sale. So... 1. If you're in the home renovation business - you'll likely be busy over the next year or two - or more. 2. If you're a homeowner who is staying - or selling - you might have a slightly longer wait for someone to help you with your home updates. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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