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Slightly More Homes Are Selling This Year Than Last, At Significantly Higher Prices |
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 Happy Monday morning, friends! I hope you had an enjoyable weekend of seeing (or in my case, not seeing) the Northern Lights, celebrating the mothers in your life, and soaking in some delightful not-too-hot and not-too-cold spring weather here in the Shenandoah Valley! I was still at least partially in rest and recuperate mode this past weekend after running VA Momentum's Perfect Day 50K trail run the prior weekend with Luke. It was an amazing event with a community feel and great support from the family and friends as individuals and teams ran a 5K every hour on the hour for 10 hours straight, from 8AM until 5PM. It was definitely the longest Luke or I have run in a day!  Speaking of amazing events... each month I offer a giveaway for readers of this market report, and this month... I'm giving away a pair of 3-day tickets to one of my favorite events of the summer... the Red Wing Roots Music Festival!  This super-relaxing and family-friendly music festival from June 21 - 23 at Natural Chimneys Park in Mt Solon features wonderful music (on multiple stages throughout the weekend), great food, lots of activities (hiking, biking, running, yoga, kids events), and all around great fun with family and friends. Have you considered going to Red Wing but haven't been yet? Maybe this summer is the time for you to make it one of your favorite family traditions. I am looking forward to being there with my family and I'm hoping you'll join in on the fun... from June 21st through 23rd. And now, let's move on along to the latest numbers in our local housing market...  The chart above takes a look at our overall market during a variety of timeframes. Number of Home Sales -- As shown in the first set of highlighted numbers, over the past 12 months we have only seen 1,214 home sales in Harrisonburg and Rockingham County, compared to 1,488 during the 12 months before that. As such, we have seen an 18% decline in home sales when looking at a 12 month period -- but when looking just at this year, thus far, we are seeing a 2% increase in home sales, from 386 this January through April compared to 378 last January through April. Median Sales Price -- Over the past year we have seen a 9% increase in the median sales price in Harrisonburg and Rockingham County, which has now reached $335,000 (over the past 12 months) as compared to only $306,700 over the 12 months prior to that. Looking just at the first four months of this year we see a slightly smaller (5%) increase in the median sales price ($338,645) when comparing it to the first four months of last year ($323,735). Median Days On Market -- Homes are selling a bit more slowly this year than last. The median number of days it took for new listings to go under contract over the past 12 months has been nine days... which is an increase from the median of seven days during the 12 months prior to that. Now, looking at a subset of the market, for a moment, here are the same numbers when looking just at detached homes, and excluding townhomes, duplexes and condos...  Focusing just on the first four months of 2024 compared to the first four months of 2023, here are the differences we see between the detached home market and the overall market... There has been a 3% decline the number of detached homes that are selling... compared to the 2% increase in the overall number of homes selling. There has been a 12% increase in the median sales price of detached homes that are selling... compared to the 5% increase in the median sales price of all homes that have sold. So, when looking just at detached homes, slightly *fewer* are selling in 2024, and the increase in their median sales price is higher than that of the overall market. Meanwhile, in the attached home market...  When looking just at attached homes (townhomes, duplexes, condos) we have seen a 13% increase in the number of such homes selling in the first four months of 2024, compared to the first four months of 2023 -- and a 17% increase in their median sales price. As such, the attached home market is seeing a strong start to the year both in number of sales and the price of those homes. Now, let's switch gears learn about the latest trends via some graphs...  As you read above, we are seeing slightly more home sales in the first four months of 2024 compared to the first four months of 2023... but... April was not a contributor to that trend. Strong months of home sales in January and February were the biggest reason why we're seeing slightly more home sales in the first third of 2024 compared to the first third of 2023, as we saw fewer home sales this April (105) than we saw last April (124). Where do we go from here? We'll have to look at contract activity and pending sales (a bit further down this overview) to guess at whether home sales activity will rebound at all in May 2024. But first, let's see how the start of this year compares to the last few years...  The 386 home sales during the first four months of 2024 puts us slightly ahead of the 378 in the first four months of last year... though well below the 447 and 461 home sales levels reached during the first four months of 2021 and 2022. It seems reasonable to conclude we'll probably see around 1,200 home sales this year (similar to last year) and not 1,500 - 1,700 home sales such as were seen in 2021 and 2022. Now, then, looking at slow moving trends by examining rolling 12 months of data...  The top green line, above, shows the median sales price over a 12 month period, measured each month. Over the past year that median sales price has increased 9% from $306,160 to $335,000. Despite fewer home sales and higher mortgage interest rates, the median sales prices keeps... on... rising. The blue line, above, shows the number of homes selling in 12 months time, measured each month. Ever since the middle of 2022 we have seen this metric of annual home sales steadily falling... though in early 2024 that trend seemed to be reversing itself as the pace of annual home sales started to rise again. But... not so much in April 2024. Stay tuned to see if the annual pace of home sales levels out, declines even further, or starts rising again as we head through May, June and July. I haven't touched on it yet in this report, but a large portion of homes that are selling this year are new homes....  Thus far in 2024, 25% (1 in 4) home sales have been new home sales. This is a rather significant change from just a few years ago when only 13% (2019) and 15% (2020) of the homes that were selling were new homes. With soooo many current homeowners having rather low (to super low) interest rates on their current mortgages, we seem poised to have lower numbers of resale home sales for several years to come. As such, the new homes offered for sale (and being purchased) help to at least partially satisfy buyer demand for housing, and we are likely to continue to see around 25% (more or less) of buyers buying new homes over the next year or two. To get a sense of where the market might go next, let's look at contract activity...  Despite fewer home sales in March and April of 2024... the amount of homes going under contract was MUCH higher this March and April (red line) compared to last year (blue line). Given these higher months of contract activity, I believe we are likely to see higher numbers of home sales in May and June. This is reinforced when looking at the number of homes under contract at the end of March and at the end of April...  There are currently 333 homes under contract (waiting to go to closing) in Harrisonburg and Rockingham County... compared to only 275 homes being under contract at the same time last year. Higher numbers of homes going under contract in March and April of this year has resulted in this higher number of pending sales, which should (within the next month or two) translate into higher numbers of closed sales. And yet, just to throw one more metric into the mix to at least partially make you scratch your head and think on this Monday morning...  As shown above, inventory levels are tracking a good bit higher at the start of this year (172-185) than they were last year (109-129) and also well above the four year average (132-147). So, why are there more homes on the market (at any given point) this year than last? My two leading theories are... [1] Homes are going under contract (days on market) a bit more slowly this year than last, which could result in slightly higher inventory levels. [2] Quite a few (31%) of these active listings (58 of 185) are new homes... some of which have not yet been built or have not yet been finished, which might result in them remaining as active listings and not going under contract. Think on that mystery... home sales rising, contract activity rising, prices rising, but inventory... also rising... and let me know if you have any other theories. While you think on that, here's one more thing that is rising...  Mortgage interest rates have been above 6.5% for the entirety of the past year, and the sub-5% rates are now a distant (two years ago) memory. After steady declines in rates between October 2023 (7.79%) and December 2023 (6.61) we have seen rates trend back up over the past four months. Anyone who is waiting to buy a home until mortgage interest rates get back down to 5% -- or even 6% -- will probably have a long wait. So, what does all of this mean for you? Home Sellers - As has been the case for quite a few years now, you're in a great position. You will likely be selling your home at a higher price than would have been possible over the past few years. Remember, though, that mortgage interest are high, which make mortgage payments for buyers quite high, so make sure your list price is in line with recent sales so that you have enough buyer interest to hopefully see your home quickly go under contract. Home Buyers - Depending on your price range and the type of property you hope to buy, you may or may not have LOTS of competition. I am currently seeing some properties linger on the market for a week or more without any offers... and some going under contract within days with multiple offers. Talk to a lender to get a sense of where you can be and where you want to be with your mortgage payment and purchase price, and then let's start getting out there to see some homes and get a feel for the market so that you're ready to confidently move forward when the right house hits the market. Home Owners - If your current home works well (or well enough) for you - enjoy your likely low housing payment (depending on when you bought or refinanced) and enjoy the increasing equity you likely have in your home. As much as excited would-be home buyers might wish you would sell your home so they have more options for buying... I can't blame you for staying put and enjoying where you are. Renters - Plenty of folks are not homeowners and are not planning to buy anytime soon, or do not see themselves being able to buy anytime soon. This is completely understandable given the significant increases in sales prices and mortgage interest rates over the past five years. If you are on the edge of being able to or interested in buying, don't hesitate to have a preliminary conversation with a lender and/or with me to get a sense of what it would look like to buy a home... especially given how rental rates keep on increasing. And... that's a wrap, folks. You are about as well informed as is possible on the overall Harrisonburg and Rockingham County real estate market on this Monday morning. But if you have questions about a specific segment of the housing market, or about your neighborhood, or about your home... feel free to ask! Until next month... [1] Check out the complete set of May 2024 charts and graphs here. [2] If you're getting ready to buy, let's chat about the process, the market and what you hope to buy. You'll also want to talk to a lender sooner rather than later. [3] If you're getting ready to sell, let's meet soon to talk about the market, the process, your house, your timing and your goals. To touch base with me about any of the above, call/text me at 540-578-0102 or email me here. Enjoy your Monday! 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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