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Home Sales Are On The Rise Again In 2024 With Slightly Smaller Increases In Home Prices |
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 Happy Friday morning, friends! We're having some warmer (and mostly sunny) days this week in the Shenandoah Valley. We probably needed yesterday's rain, though unfortunately it didn't result in another rainbow like the incredible double rainbow that showed up last week...  Warmer weather finds me running outside more these days, preparing for a few races over the next few months... which leads me to my monthly giveaway for readers of my monthly market report. This month you have a chance to win a $50 gift certificate to Sole Focus Running, a new running shop in downtown Harrisonburg. Click here to enter for a chance to win a $50 gift certificate to Sole Focus Running! Now, let's dive right into the latest data from our local real estate market...  A few items to call out from the data table above... [1] Home sales in March were actually slightly slower this year (98) than last year (103) but not by much. [2] When we look at the first three months of 2024 we'll note a 10% increase in home sales this year (279) compared to last year (254) - which is a reversal of the downward trend seen between the first quarter of 2022 and 2023. [3] When looking at a full year of data, we're still seeing a 19% decline in home sales in the city and county, but again, it seems that trend may be reversing itself in 2024... at least thus far. [4] The median sales price is undoubtedly still increasing in Harrisonburg and Rockingham County... but maybe not as quickly as over the past few years. When looking a year of data we see a 10% increase in the median sales price. When we look just at the most recent six months, it's a 9% increase. When we look just at the most recent three months, it's a 7% increase. So, prices are still rising, but the pace at which they are rising might be declining. Say that five times fast. One particularly squeezed portion of the local housing market is the City of Harrisonburg. It's a tough time to try to buy a home in the City of Harrisonburg because of how few homes are available to purchase...  As shown above, yes, we're seeing a slight (8%) increase in home sales in the first quarter of 2024 in the City of Harrisonburg -- but that is against a backdrop of a 26% decline over the past year (from 485 to 360) and a 40% decline over the past two years (from 602 to 360). Far fewer sellers are selling, resulting in far fewer buyers being able to buy. The bottom half of the data tables above show that prices keep on increasing in the City of Harrisonburg, in some instances at faster rates than in the overall market. Now, then, let's get to some pretty graphs to help us further understand the market...  As shown above, home sales in February were a bit higher than expected and March were a bit lower than expected. Home sales popped up from 75 to 87 in February... and then dropped from 103 to 98 in March. Looking ahead, it seems likely that we will continue to see stronger months of home sales as we move through April and May... which will become even more evident when you read a bit further on in this report and see the amount of contract activity in March. :-) But, before we get there, let's look at the first quarter of 2024 compared to the past few years in our local market...  As 2024 began, I wasn't sure what to expect as to how many homes would sell this year in Harrisonburg and Rockingham County. The number of annual sales peaked at 1,673 homes sold in 2021 -- before falling in 2022 and 2023 down to only 1,206 homes sold last year. How, then, would 2024 shape up in our local housing market? Now three months into the year, we can start to have a sense of what we might expect this year. We have seen more home sales in the first quarter of this year (279) than we saw in the first quarter last year (254) and more than in the first quarter of 2020 (273) -- but we have certainly seen fewer than in the first quarter of 2021 (327) and 2022 (312). As such, perhaps we'll see a slight uptick in home sales in 2024? It's probably still too early to tell, but maybe we'll see more than 1,206 home sales this year in Harrisonburg and Rockingham County. Now, let's look at that annual pace of home sales in a slightly different way...  As shown above, for a year and a half we were consistently seeing 1,600+ home sales in a 12 month period... largely due to super low (historically low) mortgage interest rates during the Covid pandemic and our recovery from it. We have definitely shifted out of that high gear now and have been in the 1,200 - 1,300 home sales per year range over the past six months. As mentioned above, while it is possible that we will see further declines in the number of homes selling in our market, it is starting to seem more likely that things are stabilizing in that 1,200 to 1,300 range. Stay tuned through the remainder of 2024 to see if we continue to see a leveling out or increase in the number of homes that are selling. In addition to the likely conclusion that we are seeing a rise in home sales, it also seems quite possible that we are seeing a slowing in the pace at which home prices are increasing...  We have been seeing steady 10% per year increase in the median sales price in Harrisonburg and Rockingham County over the past four years -- but maybe this year we will see a slightly smaller increase in the median sales price? The median sales price in Harrisonburg and Rockingham County is definitely still rising... but maybe not as quickly as it has been over the past few years. Or, maybe it is still rising just as quickly, and we're just not seeing it yet with only three months of data. Given that mortgage interest rates have been much higher (sub-3% to over-6%) for over a year now, I don't think we need to think that the higher mortgage interest rates are going to cause home prices to fall. Next up, new home sales... if you bought a home last year, there is a 1 in 4 chance that you bought a new home...  Back in 2019 only about 1 in 7 home sales was a new home... but for the past three years we have consistently seen 1 in 4 home sales being a new home. This is not likely to change much moving forward as many homeowners are choosing not to sell because they love their low mortgage interest rate. I suppose, then, we need to be thankful for so many new homes being built -- as without them, home buyers would have had even fewer options from which to choose last year when buying a home in Harrisonburg and Rockingham County. Next up, contract activity, where we'll see a bit of a surprise...  Woah! After rather typical months of contract activity in January and February (compared to previous months of January and February) we saw a sharp uptick in contract activity in March 2024. Last March we only saw buyers (and sellers) sign 118 contracts... but that figured jumped up to 143 contracts in March 2024! It will be interesting to note over the next month or two whether we continue to see elevated levels of contract activity (compared to last year) or if this was a one month phenomenon. All that contract activity may have been a part of what caused inventory levels to inch down a bit over the past month...  Usually (see the grey line above) we see inventory levels rise between the end of February and the end of March -- but this year that number fell between the end of February and the end of March. For as many sellers as put their homes on the market, buyers kept showing up, causing inventory levels to decline slightly over the past month. That said, inventory levels this year (172) are still well above where they were a year ago (116) so buyers do have more options now than they did a year ago. And how about how quickly homes are (or are not) selling these days...  Over the past six months, homes have been going under contract with a median of nine days on the market. That is to say that half of homes that went under contract did so in nine or fewer days and half in nine or more days. This time on the market is certainly higher than it was back in 2021 when it was a median of five days... and higher than the four days back in early 2021... but it's not meaningfully or drastically higher. Many homes in many price ranges are still going under contract very quickly - often with more than one offer. Finally, those silly mortgage interest rates... silly high mortgage interest rates, that is...  Mortgage interest rates were below 3% just three years ago... and below 5% just two years ago... but they have been above 6% for the entirety of the past year... and I expect them to stay there. While it's tempting to say that mortgage interest rates *might* decline below 6% soon, it just doesn't seem likely. I believe we'll likely see mortgage interest rates above 6% for the remainder of 2024. So, where then does this leave us? First -- If you're interested in even more charts and graphs, I create many more each month than I highlight here. Check them all out here. Next -- If you're planning to buy a house this year, talk to a lender sooner rather than later to become preapproved and to understand your potential monthly housing costs. If you need some lender recommendations, just let me know. Also -- If you're considering selling your home this year, feel free to reach out to me to set up a time to meet at your house to discuss the market, the process, your house, your timing and your goals. Finally -- If you have questions about anything I've mentioned above, or other real estate questions in general, feel free to be in touch anytime. You can contact me most easily at 540-578-0102 (call/text) or by email here. Recent Articles:
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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Commonwealth of Virginia
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