Happy SNOWY Wednesday, friends!

After a solid eight inches about two weeks ago, we had another six inches yesterday!  Some even say we might have another snow next week!?!  This has been a particularly snowy winter!  Here's a snowy view on the east side of town earlier this morning...

Beyond the snow, though, we're more than a month (almost a month and a half) into 2025 and I'm taking a look back at the first month of real estate data to see what trends we're seeing thus far this year.

Now then, on to some tasty morsels of data from our local real estate market...

First up, the latest trends through the end of January 2025...

While not highlighted above, you might note that we saw a 15% drop in January sales this year (80) compared to last (94) -- though January sales exceeded 2023 levels (76).  More on January sales later.

When we look back at the past three months (November through January) we see a 22% increase in the number of home sales taking place as compared to the same timeframe a year ago.  This is accompanied by a 3% increase in the median sales price.

If we look at a longer timeframe (12 months) we will find only a 9% increase in the number of homes selling -- but a 5% increase in the median sales price.

Combine these two trends and it would seem that we might be seeing an acceleration in the number of homes that are selling-- but a slowing in the rate at which prices are increasing.

Jumping for a moment to detached homes only...

When we look at detached homes only (excluding townhomes, duplexes and condos) we find only a 15% increase in sales over the past three months (compared to a year ago) whereas there was a 22% increase in overall sales.

Thus, it shouldn't surprise you to see the following in the attached market...

In contrast to the 15% increase in detached home sales between November and January, here we see a 40% increase in attached home sales!  That's a significant jump!

There has also been a 22% increase in attached home sales when looking at the past 12 months (compared to the 12 months before that) compared to only a 4% increase in detached home sales.

So... we're seeing more of an increase in attached home sales this days as compared to detached home sales... but that could be a result of so many attached new homes being built.

Here's a look at new home sales...

Over the past 12 months we have seen 389 new home sales in Harrisonburg and Rockingham County -- which marks a 29% increase from last year.

Whereas in the existing home market (everything except new homes) we're seeing...

In contrast to that 29% increase in new home sales, we're only seeing a 3% increase in existing home sales.

Why could this be?  Well... new home builders are happy to keep on building new homes, but it's not too surprising that homeowners (would be sellers of existing homes) are only so excited to sell, because...

1.  Many such homeowners have low interest rates on their current mortgages... which would be replaced with higher rates on a new mortgage.

2.  Despite likely have plenty of equity in their existing home... they would have to spend even more on a replacement home.

As I just someone I was chatting with... if you like the home you own and if it's working well for you... don't sell!  :-)

Peeking in on the two main geographic areas I cover...

The City of Harrisonburg has seen (gasp) a 3% decline in home sales over the past year.  It's actually even more stark when looking back two years where you would see a cumulative 33% decline in home sales.  

One of the reasons why home sales are decreasing (happening less frequently) in the City of Harrisonburg is because there aren't many new homes being built in the City.

Meanwhile, in Rockingham County...

In contrast to the 3% decline in home sales in the City of Harrisonburg... there has been a 14% increase in home sales in Rockingham County.  We could note, though, that the 1,059 home sales in Rockingham County over the past 12 months is actually a bit (6%) lower than two years ago.

Now, on to some graphs, starting by showing January 2025 in context...

Indeed, the 80 home sales seen seen in January 2025 was a good bit lower than the 94 home sales seen last January... as well as lower than the average (95) of January sales over the past four years.

Good news, though, the 80 home sales in January is likely to be the lowest month of home sales for all of 2025! 

Looking at a slightly broader context for our overall market...

Home sales increased in 2024 compared to 2023... and that increase seems likely to continue in 2025. 

After four years (2020, 2021, 2022, 2023) of a 10% or greater annual increase in the median sales price... we only saw a 5% increase in the median sales price in 2024.  At first glance, the graph above would seem to indicate that prices are starting to decline... but it's too early for that decrease ($345K to $341K) to mean much as we only have 80 sales prices in that median thus far in 2025.

Now, I hesitated to say that January home sales were slower than expected because of snow -- since January sales are based on December contracts -- and the snow has taken place in January.

But we can potentially blame the snow for this following graph...

Only 97 home buyers and sellers signed contracts in January 2025... compared to 108 last year... and compared to a four year average of 117 for the month of January.

Why did only 97 buyers and sellers sign contracts in January?  Perhaps because everyone was too busy shoveling snow?  But seriously... the winter weather has delayed plans for some sellers to list their homes for sale... which delays a buyer's potential contract to buy said home.  TBD if further winter weather will continue to impact the winter real estate market.  Oh, right, it is winter - I suppose the snow is reasonable.  :-)

Next up, pending sales, the number of homes that are under contract waiting to go to closing...

We are seeing a normal-ish amount of homes currently under contract for this time of year in Harrisonburg and Rockingham County.  The 243 homes currently under contract is certainly lower than the 270 homes under contract a year ago, but I believe this lower number is a result of fewer homes being on the market for buyers to buy.

To reinforce that theory, take a look at inventory levels now versus a year ago...

 A year ago there were 182 homes on the market for sale... today... only 140 homes.  This is a significant year over year decline.  We might see a slight uptick in homes for sale as we get towards the spring market, but it is also quite possible that buyers will continue to contract to purchase those new listings as soon as they are listed for sale.

Finally, as referenced earlier, current mortgage interest rates compared to the mortgage interest rate on any homeowner's current mortgage might be a part of why some sellers are not selling...

Despite mortgage interest rates (between 6.5% and 7%) seeming high compared to many homeowner's mortgage interest rate on their current mortgage -- these 6.5% to 7% rates seem to be the new normal range that we may be experiencing for the indefinite future.  Looking back over the past two years, while we saw a few months above or below that range, mortgage interest rates mostly remained in that range.

So... given all of that data on our local real estate market and the current mortgage interest rate environment, what should you keep in mind as we continue through 2025?

If you will be selling your home, you are likely to continue to see solid buyer demand depending on your price range, property type and location.  It will be important to price your home appropriately as most buyers' budgets will be limited by 6.5% to 7% mortgage interest rates.  Listing your home for sale sooner than later might give you the opportunity to have less competition from other sellers, but waiting until spring is a reasonable strategy as well if that timeline better fits your overall plans.

If you will be buying a home, go ahead and get preapproved with your favorite lender (ask if you need a recommendation) so that you are ready to make an offer when we find the right house for you.  It's possible you will be directly competing with other buyers in a multiple offer scenario depending on where you want to buy, what you want to buy and your budget.  Don't be discouraged by currently low inventory levels - there will be plenty of new listings hitting the market as we move into spring.

If you found the information in this market report to be helpful, but you have a few more questions about your segment of the local market, or about your house, or about the buying process or selling process, feel free to reach out anytime.  I'm here to help. You can contact me most easily by phone/text at 540-578-0102 or by email here.Until then, go make yourself a cup of hot cocoa!  :-)