Analysis
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An Early Look At November Home Sales! |
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 Wow! I wasn't expecting this when I ran a few numbers on November home sales. Last November... only 72 home sales. This November... what!?!!?... 130 home sales. More analysis of November (and year-to-date) home sales coming soon, but for now... this was a much busier November than we experienced last year. By far. | |
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Home Sales By Price Range In The City Of Harrisonburg |
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 The most active price range for home sales in the City of Harrisonburg is... the $200K to $300K price range. But this might be more than just what buyers are buying... 1. The housing stock (what homes exist in the City) also impacts what is sold, and thus, what buyers can buy. 2. The houses that homeowners in the City are willing to sell also impacts what is old, and thus, what buyers can buy. An interesting unknown is whether home buyers would buy $500K+ or $600K+ or $700K+ homes in the City of Harrisonburg if more such homes existed. Quarry Heights may help to answer that question as they plan to build $500K+ detached homes and $600K+ attached villas. | |
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How Much Slower Are The Winter Months In Our Local Housing Market? |
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 It is common knowledge that the winter months are the slowest when it comes to home sales -- in our local market, and beyond. But just how much slower are they? The graph above shows the average number of *contracts signed* per month during the winter (Dec, Jan Feb) as compared to during the spring (Mar, Apr, May) based on the past three years of home sales in Harrisonburg and Rockingham County. So... Is 100 buyers buying a month a significantly slower pace of buyers committing to buy than 142 buyers buying a month? Yes. Is 100 buyers buying a month still a pretty solid amount of buyers buying per month in the context of the spring market only comprising of 142 buyers buying a month? Yes. Is it possible that the number of buyers buying per month during the winter is artificially constrained by a lower number of sellers being willing to sell per month? Yes. So... if you are thinking about selling your home in the next six months... should you wait until spring? You could, but I don't think you need to if you would rather sell and move sooner than springtime. There will still be plenty of buyers buying over the winter, even if it is not as many as will be buying in the spring. | |
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Rockingham County and New Home Sales Drive Surge in Area Housing Market |
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 Happy Friday morning, all! November is flying right along... with a rather entertaining overlap of the JMU football and basketball seasons (Go Dukes!)... plus one of my favorite holidays, Thanksgiving! Speaking of JMU Basketball... each month I offer a giveaway for readers of my market report. This month I'm giving away four tickets to the JMU Men's Basketball game on Saturday, December 7 at 4:00 PM. Click here to enter for a chance to win the tickets to cheer on the JMU Dukes! Now, on to the latest in our local housing market. First, some of the overall metrics...  Home sales slowed, a touch, in October 2024 with only 110 home sales as compared to 116 last October... but thus far this year we have seen 1,118 home sales, which is a 6% increase from the 1,050 seen in the same timeframe last year. So... 6% more home sales this year than last... and how about those prices... The median sales price in Harrisonburg and Rockingham County over the first ten months of 2024 has been $345,000 -- which is a 5% increase from the median sales price of $330,000 last year at this time. So... 6% more home sales, and 5% higher prices... how about the speed of those sales... Median days on market continues to (slowly) increase in 2024... which a current median of 7 days, up from 6 days a year ago, and 5 days the prior year. So... small increases in the speed at which home sales go under contract, but 6% more home sales and 5% higher prices. Now, let's take a quick look at only single family detached housing, which excludes townhouses, duplexes and condos...  In contrast to the market-wide 6% increase in the number of homes that are selling, we are only seeing a 2% increase in the number of detached homes that are selling. Also of note, two years ago we had seen 941 detached home sales in Harrisonburg and Rockingham County through the end of October, whereas we are only seeing 751 such sales thus far in 2024. When it comes to prices, we are seeing a stronger (12%) increases in the median sales price of detached homes as compared to the overall market-wide 5% increase in the median sales price. Furthermore, the median sales price of a single family detached home has increased from $327,000 to $390,900 over the past two years. Next up, let's take a peek just at the City of Harrisonburg...  While we are seeing increases in home sales in most portions of the market... and in the overall market... not so much in the City of Harrisonburg. There have only been 231 home sales in the City thus far in 2024 which is a 13% decline from last year, and a 39% decline from the 376 home sales seen in the first ten months of 2022. Meanwhile, in Rockingham County...  Mirroring the 13% decline in City sales in 2024, we are finding a 13% increase in Rockingham County home sales thus far in 2024. One reason we are seeing more of an increase in home sales in the County than in the City is a result of most new home developments currently being built in the County... and not the City. Here's a look at the number of new construction homes selling in recent years...  And as you might imagine... if we're seeing a 28% increase in new home sales in the first ten months of 2024, we probably aren't seeing much of an increase in existing home sales...  Indeed, we are seeing a tiny decline in existing home sales this year (793) compared to last year (796) though both are considerably below the 1,042 existing homes that sold two years ago in the first 10 months of 2022. Rolling over now into some graphs, let's see what else we can learn about our local housing market through the end of October 2024...  For five of the past six months we have seen more home sales this year than last year... the one exception being October. We could also generalize and say that the larger increases in monthly sales (larger little gold arrows) were on the first half of the past six months... while the smaller increases (smaller little gold arrows) were on the second half of the past six months. Looking ahead a bit on the graph above... it seems almost guaranteed that we will see more November home sales this year than last. Last year we saw monthly home sales drop from 116 in October to 72 in November. I don't think we will see that large of a decline this year. When we pile up each month of the year on top of the prior months, here's what we get over the past few years...  Home sales are on the rise this year... increasing from 1,049 to 1,1118 in the first ten months of the year... BUT... that is still a significant drop from the 1,389 home sales seen in the first 10 months of 2022! The biggest difference, as you likely know, is that we were still experiencing super low mortgage interest rates in 2022... which were no longer around in 2023 and 2024. On this next graph I'm trying to generalize the main two shifts I have seen in 2024...  The top line is tracking median sales prices. For several years we saw 10% per year annual increases in the median sales price... up to and including in 2023... but home prices seem to be increasing a bit more slowly in 2024... more in the neighborhood of a 5% increase instead of a 10% increase. The other main change we have seen in 2024 is that home sales are rising again... so as to say that more homes are selling. Through most of 2023 we saw steady declines in the number of homes that were selling, but that trend reversed itself (slowly) in 2024. Zooming out a bit, take a look at the change in home values for detached homes in Harrisonburg and Rockingham County over the past five years...  Indeed... you are reading that correctly... the median sales price of a detached home in Harrisonburg and Rockingham County has increased by $150,000 over the past five years... for a cumulative 62% increase! A few thoughts come to mind... 1. Anyone who has owned the same home for the past 5+ years likely has quite a bit of equity in their home. 2. It is a lot harder (financially) to consider buying a detached home now (median price of $391K) than it was five years ago (median price of $240K). 3. Changes in mortgage interest rates over the past five years haven't helped buyers either -- as the average rate on a 30 year mortgage was 3.75% five years ago, and is 6.78% today. Wowsa! Shifting gears a bit, let's zoom back in to the here and now, to see what recent contract activity might tell us about upcoming months of home sales...  Here (above) is the other reason why I don't think we'll see a decline in November home sales this year like we did last year... there was a drastic difference in October contract activity this year compared to last. The key thing to remember about last October is that it included the final climb to a peak average mortgage interest rate of 7.79%. That steady climb slowed and slowed and slowed down buyer activity last October (and November) as shown by the blue line above. Thus, even though mortgage interest rates are currently in the 6% - 6.75% range, we still saw many more buyers signing contracts to buy homes this October (138) as compared to last October (83). I expect we will continue to see stronger contract activity in November and December of this year compared to the same months last year. Which leads us to "pending sales" -- the number of homes that are under contract at any given time...  The red line (above) tracks how many homes are pending (under contract) per month in Harrisonburg and Rockingham County. As you can see from all the gold arrows, we had been seeing increases in pending sales for most of the months this year... through August, when 2024 fell below 2023... but things have picked back up again significantly in September and October. There are currently 291 homes under contract (pending) in Harrisonburg and Rockingham County as compared to only 234 a year ago at this time. And how about those inventory levels?  Look at the difference in the trajectory of the blue and red lines above. The blue line shows how inventory levels were steadily rising last year between July and October... in contrast to the red line that shows inventory levels mostly decreasing this year between July and October. Now in November, we see far fewer (163) homes for sale than at the same time last year when 230 homes were listed for sale and not yet under contract. A thread that runs through all of these charts are graphs is change in mortgage interest rates over time which is what we'll examine next...  Lots of arrows on this graph -- sorry, not sorry. A year ago we were seeing mortgage interest rates rise as we progressed from August (6.81%) to November (7.79%). We have seen an overall decline in rates over the past year (7.79% to 6.72%) but over the past month we have actually seen them start to increase a bit, rising from 6.08% at the end of September up to 6.72% at the end of October. Mortgage interest rates significantly impact the cost of housing and have played an oversized role in the the housing market (locally and beyond) over the past few years due to how quickly they have increased. So, if you've made it thus far, thanks for reading and for educating yourself on the state of our local housing market. The general, recent, local, trends I am seeing in our local market include:
If you will be buying or selling a home in the next three to six months, we should talk sooner rather than later about your hopes, goals, dreams and the best timing for your big move. Even if you don't know if you really will buy... or if you really will sell... I'm still happy to connect with you just the same to discuss your possible purchase/sale, to discuss the market, or to discuss life in general. Feel free to reach out anytime with questions or to set up a time to meet. You can contact me most easily by phone/text at 540-578-0102 or by email here. Until we chat next, I hope you have a wonderful Thanksgiving celebration and are able to enjoy bountiful, relaxing, refreshing and fulfilling time with your family, friends and other special people in your life. If you're running in the Rocktown Turkey Trot, I'll see you on Thanksgiving morning in downtown Harrisonburg! :-) Gobble, Gobble! | |
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Detached Homes Are Proportionally More Prevalent In Rockingham County Than In Virginia |
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 While we might currently be seeing more new townhouses being built (and bought) than detached homes in Harrisonburg and Rockingham County, when we look at Rockingham County's housing stock... there is a greater share of detached homes here than there are across Viriginia. Looking at all of Rockingham County's housing stock... 73% of existing homes are detached single family homes. In Virginia, only 61.5% of the housing stock is comprised of detached single family homes. Many of the recently proposed new housing developments in the City and County are for townhouses and/or apartments -- so we might slowly see the figures above shift over time, but for now, we have quite a few more detached homes (proportionally) in our overall housing stock than is seen when looking at the entirety of Virginia. | |
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More Than Half Of New Home Buyers Are Buying Attached Homes |
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 Most buyers of new homes in Harrisonburg and Rockingham County are buying attached homes... though just barely. 52% of new home buyers (191) bought attached homes over the past year 48% of new home buyers (178) bought detached homes over the past year Two reasons come to mind as to why we are seeing just as many (or slightly more) buyers buying new attached homes as detached homes... [1] It's what the builders are building. [2] The price point of attached homes is more affordable. Here's how the median sales price of detached and attached homes compare over the past 12 months... Detached Homes = Median Sales Price of $406,250 ($210/SF) Attached Homes = Median Sales Price of $328,955 ($198/SF) Moving forward, I think both of these dynamics (what is being built, price of each) will cause plenty of future buyers of new homes to be buying townhouses. Who knows... within a few years we might be seeing 60% to 70% of new home buyers buying attached homes instead of detached homes. (Attached Homes = townhouses, duplexes, condos) | |
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Fewer And Fewer Resale, Detached, Homes Selling In City Of Harrisonburg |
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 Just slicing and dicing the data one more time here... this is looking at only the City of Harrisonburg, only resale homes, and only detached homes -- no duplexes, townhomes or condos. A few things to note... We are seeing a steady decline in the number of these homes selling per year over the past three years. The 2024 column (115) is only through yesterday -- so we'll see that number rise by the end of the year, but it's not likely we will end up seeing another decline in annual, existing, detached City home sales this year. The median sales price of these homes keeps on rising... after a 7% increase in 2022 and 2023, the median sales price increased slightly less (4%) thus far in 2024. As I have mentioned quite a few times, I believe this reduction in the number of buyers buying existing, detached, City homes is a result of a reduction in the number of sellers willing to sell their existing, detached, City homes. | |
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Competition Is Often Fierce For City Homes! |
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 We have seen fewer, and fewer, and fewer home sales in the City of Harrisonburg over the past few years. But this is almost entirely an issue of not enough sellers being willing to sell -- not an issue of not enough buyers wanting to buy. The result is that in the current market, when a City home is listed for sale... there is often a LOT of interest in said home. This is great for home sellers in the City of Harrisonburg...
This is not quite as great for home buyers in the City of Harrisonburg...
But alas, the City of Harrisonburg remains a popular place to live. Until and unless we start to see some new construction (for sale) housing in the City of Harrisonburg, we will likely still see lots of competition for City homes when they are offered for sale. | |
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Contract Activity Increasing, Inventory Levels Decreasing, In Harrisonburg And Rockingham County |
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 Happy Crisp, Cool, October Wednesday To You! This is a fantastic time of year... one of my favorite times of the year... we'll often have both pleasantly cool and pleasantly warm temperatures in the same day... the leaves are changing colors... I get to have a ton of fun coaching middle school volleyball and watching Emily's volleyball matches... cheering for the Dukes at plenty of JMU football games... not to mention my birthday later this month. ;-) And, let's not forget another October highlight... the Harrisonburg Half Marathon...  "Funny" story... last year, I ran in the Harrisonburg Half Marathon after having been sick for a few days... and only made it through the first 10 miles before worrying all those around me by semi-collapsing. Oops! This year, at least a dozen people shouted out to me as I ran - "hey Scott, don't forget to finish this year!" - real funny guys, real funny. But yes, I did finish this year. Maybe I won't get the same jokes next year? Let's hope. :-) Before we get into the latest trends in our local housing market, each month I offer a giveaway for readers of my market report. This month I'm giving away a seasonally appropriate $50 gift card to Showalter's Orchard in Timberville. Let this be a reminder to you to go pick some apples, enjoy some apple cider donuts, and get into the Fall season! Click here to enter to win the gift card. And now, on to the real estate data. Charts first, graphs second.  Above you'll find a snapshot of the overall market in Harrisonburg and Rockingham County, showing... [1] Despite a small (3%) drop in home sales in September (101 down to 98) we have seen an 8% increase in home sales when comparing the first nine months of this year to the first nine months of last year. Home sales are on the rise. [2] The median sales price of those homes that sold in 2024 has been "only" 5% higher than it was a year ago. I say "only" because we have seen multiple years of 10% increases in the median sales price, so this 5% increase is a smaller increase than we have otherwise seen in recent years. Interestingly, we see slightly different trends if we focus in on only detached homes... excluding townhomes, duplexes and condos...  [1] Compared to the market-wise 8% increase in home sales in 2024, we have only seen a 5% increase in detached home sales. We're not seeing the number of detached homes selling bounce back quite as much as we are seeing that in the overall market. [2] The detached home sales market is outperforming the overall market when it comes to sales prices. The median sales price of a detached home has increased 11% (from $350K to $390K) over the past year as compared to the 5% increase seen in the overall market. Thus, you likely won't be surprised to see the opposite trends in the attached home sales report which includes townhomes, duplexes and condos...  When looking just at attached home sales we find... [1] There has been a much larger increase in the number of these sales that are taking place with a 14% year to date increase, compared to the 8% increase in the overall market. [2] The increase in median sales price has been a smidge smaller (4%) than in the overall market (5%) thus far in 2024. Next, let's take a quick peek at one smaller segment of the local market... the City of Harrisonburg...  If you're looking to buy a home in the City of Harrisonburg, you likely won't have that many options. After seeing 335 home sales in the first nine months of 2022, that dropped to 241 sales last year, and has now fallen to 210 home sales this year. These declines in home sales are not a result of fewer buyers wanting to buy -- it is almost entirely (or entirely) a result of fewer sellers being willing to sell -- and little to no new home construction taking place in the City. In contrast, in Rockingham County...  Home sales are booming (+15% YTD) in Rockingham County, due in large part to new home communities springing up almost entirely in the County rather than in the City. While we aren't back to 2022 sales levels, we have seen a solid increase in County home sales activity in 2024 as compared to 2023. Finally, a synopsis of those new home sales that are a significant part of the local housing market in a time when many homeowners do not want to sell their homes...  Two things to note here... [1] While the overall market has seen only an 8% increase in the number of homes selling in the City and County, we have seen a (much larger) 28% increase in the number of new homes selling this year compared to last. [2] Despite a 5% increase in the median sales price of the entire market, we are only seeing a 3% increase in the median sales price of new homes. And again, let's not be too surprised by the opposite indicators in the resale market...  Looking just at resale homes, or existing home sales... [1] There has only been a 1% increase in the number of existing homes selling this year... compared to an 8% increase in the overall market. Thus, that 8% increase in overall home sales is almost entirely due to new homes being built and available for sale. [2] The median sales price of existing homes has risen 7% over the past year, at a slightly higher rate than the overall market where the median sales price has only risen 5%. And now... moving beyond the words, to some graphs...  On the graph above, you can see that the months of May (144), June (128), July (131) and August (113) all out performed the same months last year when it came to the number of home sales that went to closing in Harrisonburg and Rockingham County. But... we saw fewer home sales this September (98) than last September (101) so maybe home sales are slowing down a bit? Hold that theory for a few more graphs and we'll see if it is reinforced by recent contract activity. While we're holding that thought, let's see where nine months of home sales have taken us thus far in 2024...  Home sales are on the rise! We've seen 1,003 home sales in the first nine months of last year, which is solidly above where things stood last year (933) though is still well below the number of home sales we were seeing in 2022. At this point it seems very likely that we will finish out 2024 with more home sales than last year (1,206) but we seem very (very) unlikely to rebound back to the 1,571 home sales seen in 2022. And here are those long term, slow moving, trendlines that are important to monitor over time...  The green line above shows that while the median sales price is still steadily increasing in Harrisonburg and Rockingham County... the pace at which is increasing is... slowing. After a few years of 10% annual increase in the median sales price, we seem likely to only see a 5% annual increase in 2024. But... as shown by the blue line... home sales are rising again. A few graphs from now you'll see that mortgage interest rates hit their 20+ year high in October 2023, and lo and behold, once those rates started drifting back downward again... home sales started to rise again. Now, contract activity. Remembering back a few graphs, we were wondering if a slight decline in September home sales meant that we would see an overall slower Fall sales season. Per this graph, I'm going to say no...  Two things to note above... [1] July through August contract activity generally fell last year (blue line) while it has been rising this year (red line) indicating we should see stronger home sales over the next few months. [2] Contract activity *really* fell last October and November... likely due to the highest mortgage interest rates in 20+ years. We are not seeing those same high rates this year, so contract activity seems likely to be well exceed last year's figures in October and November. And... a slow rise in contract activity over the past few months has resulted in...  Lower inventory levels! Over the past two months we have seen small but steady declines in the number of homes listed for sale (that are not under contract) as compared to a steady increase between last June and October. We seem unlikely to see a rapid rise in inventory levels this October and November, as last year's increase was likely directly related to 7.5%+ mortgage interest rates that (thankfully) just lasted for a few months. This next (and second to last) graph has become more interesting of late...  The big question... is seasonality back when it comes to "median days on market" in Harrisonburg and Rockingham County? Over the past two years we have seen this median days on market metric increase in the Fall and Winter and decline in the Spring and Summer. Will we see that happen again as we roll through November, December, January and February? Stay tuned! Finally, we've talked about mortgage interest rates a half dozen times thus far, so let's see what they have been doing...  Mortgage interest rates have been falling for the past five months to a low of 6.08% at the end of September... down from 7.31% a year ago. These lower mortgage interest rates have progressively lowered mortgage payments for actual buyers and would be buyers and has likely brought more buyers back into the market at many price points. And there you have it folks, in summary...
All that said, this is all much more nuanced in any particular segment of the market based on property type, size, age, location, etc. So... If you are thinking about selling your home this Fall, let's dive into the trends for your corner of our local real estate market to determine the best pricing strategy for your home. If you are thinking about buying a home this Fall, go ahead and get pre-approved and let's start looking at new listings of interest as they hit the market, as they likely won't last long. Feel free to reach out anytime with questions or to set up a time to meet. You can contact me most easily by phone/text at 540-578-0102 or by email here. Until next month... enjoy Fall... and may you not forget to finish whatever race you are currently running... literally or figuratively. ;-) | |
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Contract Activity Continues To Track Slower This Year Than Last In September |
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 The graph above shows contract activity per month... comparing 2023 (grey line) to 2024 (red line) for each month between April and September. For the first three months (April through June) we were seeing more contracts signed this year than last. For the most recent three months (July through September) we have been seeing fewer contracts signed this year than last. The September data points are projected totals for the month based on contract activity between September 1 and 17 of this year and last year. Will the second half of September surprise us? Will we see an uptick in contract activity? What has been keeping contract activity over the past few months? Will changes in mortgage interest rates over the next few weeks or months impact contract activity? Stay tuned to see how the Fall housing market starts to shape up in Harrisonburg and Rockingham County. | |
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Contract Activity Cools Slightly After Strong Summer Surge in Home Sales in Harrisonburg and Rockingham County |
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 Happy Monday Morning, Friends! We are just six days from the first day of Fall... and it's starting to feel like it! High temperatures are peaking in the 70's instead of the 80's this week... the leaves are starting to change colors... and we're back to having fun watching JMU football games...  My niece, Sofia, just started college at UNC Charlotte, so Luke and I were excited to go down to visit her and to take in the first JMU football game of the season. Here's looking forward to some further fun as the season continues! Go Dukes!!! Before we dive into the real estate data... as one last reminder of summer... I'm giving away a $50 gift card to Sweet Frog. Yes, I know, we can enjoy Sweet Frog all year round, but it's particularly tasty on a warm summer evening. So, if you're a fan of Sweet Frog frozen yogurt (and all the toppings!) click here to enter the gift card. And now, on to the latest in our local real estate market...  Above you'll see a basic overview of the amount of homes that are selling these days, and the prices at which they are selling. A few things to note... # Sales: We saw more home sales this August than last (+9%) and even though we've seen fewer home sales over the past 12 months compared to the prior 12 months (-2%) we are seeing an increase (+8%) in the first eight months of 2024 as compared to the same timeframe last year. So... more homes are selling this year than sold last year, and... Prices: In every time horizon I explored above (1M, 3M, 6M, 12M, YTD) I found an increase in the median sales price. I'll focus in on the year to date number, however, where we see a 4% increase in the median sales price when looking at homes selling in the first eight months of this year (median of $342,490) compared to the first eight months of last year (median of $330,000). As we continue, we'll want to see how the performance of different market segments compare to this market wide 4% increase in the median sales price. First up, detached home sales...  Interestingly... [1] Despite an 8% market-wide increase in home sales thus far in 2024... we're only seeing a 4% increase in the number of detached homes that are selling. [2] Despite only a 4% increase in the median sales price in the overall market (detached + attached) we're actually seeing an 11% increase in the median sales price of detached homes in 2024. As we continue through this report, you'll note a variety of charts and graphs that indicate that price growth is slowing to only 4%... but that is the overall market, whereas detached home median sales prices still seem to be climbing more quickly than the overall market. Dialing in now on one specific geographic area... the City of Harrisonburg...  It has been increasingly difficult to find a house to buy in the City of Harrisonburg. As shown above, in the first eight months of 2022 we saw 303 home sales in the City, last year that dropped to 226 sales and this year only 198 sales. To be clear... this is almost entirely a supply side issue - there aren't enough property owners willing to sell their homes, and there isn't much new construction happening in the City these days. Despite that restriction in the market in the City of Harrisonburg, we are still seeing only a 4% increase in the median sales price when comparing the first eight months of this year to the first eight months of last year... and the median sales price in the City of Harrisonburg is still under $300K thus far in 2024. And how about out in Rockingham County? How are things going there?  We are seeing a significant increase (+16%) in the number of homes selling in Rockingham County thus far in 2024 compared to in the same timeframe in 2023. You can't see it from the chart above, but a lot of that increase in the number of homes selling is a result of new homes being built in the County. Median prices, however, continue to rise in Rockingham County at that same 4% in the first eight months of 2024 compared to the same timeframe last year. New home construction... it's on the rise? Yes, indeed, it is...  We've seen 253 new home sales thus far in 2024... which is a 27% increase from the first eight months of 2023... though interesting, it's slightly fewer than we saw two years ago, in 2022. I expect we will continue to see quite a bit of new home construction over the next few years... and we need it... as we continue to see high levels of demand from home buyers. So, if we're seeing a 27% increase in new home sales, how about those existing home sales? Are they also increasing at that pace? Ummm... nope...  In contrast to the 27% increase in new home sales thus far in 2024... we have only seen a 3% increase in existing home sales. Lots and lots of homeowners are just staying put and not selling their homes. Now, let's get to some of the graphs, to get a clearer picture of some of the trends we have been discussing...  August marks the fourth month in a row with more home sales (closed home sales) than during the same month last year. This has been an active summer of real estate closings... though homes often go under contract a month or two before they make it to closing... so this busy summer of real estate closings was the result of a busy late Spring and early Summer of contracts, which we'll see shortly. To put this year in the context of the past two years...  Home sales in 2024 are definitely exceeding 2023 levels... but pale in comparison to 2022. I expect we might see some further upward momentum in home sales later in 2024 if or when we see further relief in mortgage interest rates. More on that later. Here is an illustration of the two overall trends we're seeing right now in Harrisonburg and Rockingham County...  First off, at the top, home price growth is slowing. Testing your reading comprehension and short term memory... do you recall that the overall market is seeing only a ___% increase in the median sales price while the detached home segment of the market is seeing an ___% increase in the median sales price? ;-) Overall Market = 4% increase; Detached Homes = 11% increase. And... that second line (the blue one) at the bottom... shows us that aver steady declines from over 1,700 sales a year down to about 1,200 sales a year, we are now seeing some overall increases in the number of homes selling in our market. Back to those detached homes for a moment...  Here's you'll note the *absence* of a flattening out of the median sales price line in green. While the overall market is only seeing a 4% increase in median sales prices in 2024, thus far this year detached homes have been selling at prices that are 11% higher than last year. Earlier I talked about a busy summer of closings which was a result of earlier contract activity. This next graph shows current contract activity, which is a predictor of home sales activity over the next month or two...  On the left side of the graph above you can see quite a few months of much higher contract activity this year (red line) than last year (blue line) -- particularly in March, April and May. But then, contract activity declined in July and August to levels below where we were a year ago. Looking ahead, we will most likely see a similar number of homes going under contract in September as we did in August, before contract activity likely starts to decline even further in October. This recent slow down in contract activity has also shown up in the pending sales metric, which tracks how many homes are under contract at any given point...  After seven months of riding high above 2023 levels, we have now seen pending sales drop below 2023 levels in August. This is mostly a result of slower months of contract activity in July and August. It's certainly possible that we'll see pending sales pop back up again as we work our way through September and October... but the 2023 and 2024 trajectories have crossed as of the end of August. But wait... if pending sales are declining, that must mean inventory is rising?  Sorta kinda. Inventory levels dropped to their lowest levels at the end of June... but rose again in July and remained steady at that point in August. Of note... inventory levels consistently climbed last year between June and October... but that was during the exact same timeframe when mortgage interest rates were climbing to their highest levels in 20 years. I do not expect that we will see inventory levels climb that high in September and October this year. But speaking of climbing... will days on market start to climb soon?  After quite a few years of absurdly, consistently low median days on market, we have seen some variability in this metric over the past two years. That pace at which homes go under contract (days on market) slowed during each of the past fall/winter seasons, so perhaps we'll start seeing that again in 2024. Finally, that one little (or big) number that seems to have been having an oversized impact on the housing market over the past few years... mortgage interest rates...  After peaking at 7.79% last October (the highest level in 20+ years) we have started to see some relief in mortgage interest rates -- particularly over the past three to six months. As of June, the average 30 year fixed rate mortgage had fallen below 7%, and now we're closer to 6% than 7%. The Federal Reserve might be announcing a rate cut this Wednesday... though some say that the recent anticipation of that rate cut has already been priced into adjustments in mortgage interest rates. So, let's play a bit of up and down in 2024...
So, as we look ahead at the final three and a half months of the year (yes, that's all that remains) here are a few things to keep in mind... Home Buyers - Many segments of the local market are still rather competitive (multiple offers) but plenty of homes aren't going under contract within two days. Get preapproved now, go see houses quickly when they hit the market, and be prepared to make a rapid, but thoughtful decision about whether to make an offer. Home Sellers - Some, but not all, houses are going under contract quickly. The more broadly appealing your home is to buyers (based on size, location, house features, lot features, etc.) the more quickly we are likely to receive offers. If there are some attributes of your home that disqualify broad segments of the pool of potential buyers, then we are likely to have a longer wait for an offer... and we might have to adjust your list price more than the market data would otherwise suggest in order to inspire a buyer to make an offer. The data and observations I have presented in this market report are a high level overview of our overall market. If you're getting ready to buy or thinking about selling, we should be chatting more specifically about your segment of the market -- what you will be buying, or selling. Feel free to reach out anytime with questions or to set up a time to meet. You can contact me most easily by phone/text at 540-578-0102 or by email here. | |
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Fewer City Home Sales, More County Home Sales In 2024 With Higher Prices All Around |
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 Happy Thursday morning to you! The summer seems to have flown by, and soon school will be starting for many of us... as parents of K-12 students, as parents of college students, as teachers or administrators at a K-12 school or professors or administrators at a local college or university. If you have a such a transition coming up, I hope you had a full and fun and relaxing summer and are excited for the school year ahead.  Shaena, Luke, Emily and I had a fun and fulfilling summer and soon Luke will be starting his second year of college and Emily will start 11th grade. The years fly by quickly! Before we start looking through the latest trends in our local real estate market, each month I offer a giveaway for readers of my market report. This month I'm giving away a $50 gift card to Jack Brown's. If you find me at Jack Brown's it will probably be enjoying one of their delicious burgers and some sweet potato fries. Click here to enter to win the gift card. Now then, where were we... ah, yes, the latest housing market data...  The chart above outlines some of the main trends in our local housing market and a few things stand out to me... [1] We have seen strong sales over the past three months as compared to last year, with a 14% year over year increase in the number of home sales taking place in Harrisonburg and Rockingham County. [2] This latest surge over the past three months (+14%) has been pushing back against the 7% decline in sales when we look at the past 12 months of home sales compared to the 12 months before that. [3] When looking just at the current calendar year, we have seen an 8% increase in the number of home sales taking place in Harrisonburg and Rockingham County in 2024 compared to 2023. ...and on sales prices... [4] Over the past year the median sales price has increased 6% from $318,480 to $337,500. [5] But when we look just at the current year to date (Jan-Jul) we have only seen a 4% increase in the median sales price compared to the same seven months last year. So, we're seeing more home sales in the first seven months of this year compared to the first seven months of last year... but sales prices seem to be rising a bit more slowly than they had been over the past few years. Sneaking a quick glance at detached single family homes, and then attached homes...  The median sales price of detached homes has increased 11% thus far in 2024 as compared to the same timeframe in 2023... to a median sales price of $388,000. That is to say that half of detached homes selling in Harrisonburg and Rockingham County are selling for $388K or more and half are selling for $388K or less. And how about those attached homes...  We have only seen a 5% increase in the median sales price of attached homes... which includes townhomes, duplexes and condos. The median sales price of these properties thus far in 2024 is $310,000... which means that half of the attached homes selling in Harrisonburg and Rockingham County are selling for $310K or more and half are selling for $310K or less. If you're looking to buy a home, the number of opportunities you might have will likely vary depending on if you want to buy in the City or the County. Here's what we're seeing in the City of Harrisonburg...  City home sales (shown above) have declined 17% in the first seven months of 2024 compared to the same timeframe last year. While 200 homeowners sold their homes last January through July, only 167 homeowners sold this January through July. This is largely a supply side issue... fewer sellers selling... not fewer buyers buying. Meanwhile, in Rockingham County...  If you have been hoping to buy a home in Rockingham County, you're in luck, there are many more opportunities to do so than in the City of Harrisonburg. In the first seven months of this year we have seen 17% more home sales in the County than during the same timeframe last year. But... one of the reasons why there are more home sales in the County than in the City is because most new homes currently being built are in the County (not the City) and new home sales are on the rise...  While only 175 new homes sold in the first seven months of 2023... we have seen 227 new home sales during that timeframe this year... which marks a 30% increase in new homes selling in our area. We have not, though, seen a 30% increase in existing homes selling...  We have seen... only a 1% increase in the number of existing homes selling in the first seven months of 2024 as compared to 2023. Looking one year further back on the chart above you'll note that the mid-500-ish home sellers who sold during this timeframe in 2023 and 2024 is well below the 708 existing home sales seen during that timeframe in 2022. Mortgage interest rates being what they are continues to impact how many homeowners are willing to sell their home. And now, some graphs to provide some visual insights into these latest trends...  May, June and July have been busy months for home buyers and sellers this year with a total of 401 home sales... as compared to only 352 in the same three months last year. Looking ahead, we are likely to see fewer home sales taking place in August if we track along last year's trend. These last three months have helped 2024 eek ahead of 2023...  After a significant decline in the number of homes selling in our area (1600-ish down to 1200-ish) between 2022 and 2023 we are now seeing a modest increase in home sales activity in 2024. The 789 home sales thus far in 2024 exceeds the 730 seen last year through the end of July, though it is well below the 943 seen in January through July of 2022. And as we have been seeing for quite a few months now, sales are slowly rising and price increases might be slowing a bit...  The bottom blue line, above, shows the annual pace of home sales in Harrisonburg and Rockingham County - measured monthly. Over the past seven months we have been (mostly) seeing this pace of home sales trend upwards. The top green line, above, shows the annualized median sales price in Harrisonburg and Rockingham County - measured monthly. We are still seeing steady increase in the median sales price, but it is not increasing quite as quickly as it has over the past few years. But of note... the median sales price of *detached* home sales is definitely still steadily increasing...  Market-wide median sales price trends can be affected by how many detached vs. attached homes are selling... or how many new vs. resale homes are selling. While the median sales price in our overall market is trending upwards a bit more slowly than in recent years, the detached median sales price is still *steadily* increasing. Just three years ago the median sales price of a detached home was just below $300K and now we are edging closer and closer to $400K. Lots of circles and arrows on this next graph... focus, folks, focus...  The graph above shows the number of contracts being signed each month. We saw much higher levels of contract activity this March, April and May than we did last March, April and May. Then, contract activity in June was about where it was last June... and July contracts were well below levels seen last July. This likely means that we will see fewer closed sales over the next few months, which is confirmed by the latest pending sales trends...  The number of pending sales (under contract homes) peaked in May 2024 and has been declining ever since. That said, current levels (267 pending sales) are still above where we were a year ago (252 pending sales) in Harrisonburg and Rockingham County. Another quirky metric of late has been inventory levels...  Inventory levels (the number of homes for sale at any given time) were steadily trending now between April and June, and then popped back up again in July 2024. The blue line above shows inventory levels last year and you can see a similar increase between the end of June and the end of July... so the increase this year is not unexpected, but does run counter to the steady decreases we had been seeing over the past few months. This following graph, tracking median days on market, has become much more interesting over the past year and a half...  For quite a few years (see the first third of the graph above) the median sales on market was sticking right around five days, regardless of the time of year. All homes were selling very quickly at all times of year. Now, we seem to be seeing a bit more seasonality in this trend, with median days on market (how quickly homes go under contract after they are listed for sale) trending upwards through the fall and winter and then back downwards in the spring and summer. So, don't be surprised if median days on market starts to rise again over the next few months. And finally, one of the main drivers of buying and selling activity of late...  Those darn, silly, pesky, mortgage interest rates. As mortgage interest rates rise, the cost of a monthly housing payment rises, assuming the same sales price. Over the past few years we have seen steadily rising home prices AND rising mortgage interest rates. When we see higher rates, buyers aren't quite as capable or as interested in buying... and sellers (if they would have to then buy again) aren't quite as interested in selling. If or as or when we see mortgage interest rates start trending downwards, we will likely see more buyers AND sellers enter the market. As noted above, during August, rates have fallen even further than shown on the graph... down to 6.47% and I have seen some buyers locking in as low as 5.99% recently. So, having absorbed all of those insights into the latest trends in our local housing market, what does it all mean for you? If you are thinking about buying a home in the next few months... things might see a smidge more hopeful. Mortgage interest rates are trending down a bit. Inventory levels are trending up a bit. Days on market might trend upwards a touch. Many segments of the market are still moving very quickly and are still very competitive, but not all segments of the market. Depending on what type of property you want to buy, and its location, and its price range -- you might be competing with multiple other buyers within a day of a house being listed for sale -- or you might actually be able to sleep on your decision about whether to make an offer on a new listing. If you are thinking about selling your home in the next few months... it is still relatively likely that it will sell quickly and almost certainly at a very pleasing price... but all property types, locations and price ranges are not performing equally right now. We'll want to dive a bit deeper into the data related to your specific home to devise the best pricing strategy and to give you reasonable expectations as to how quickly your home will sell. If you have questions about buying, selling, the process, the market or anything else, you are more than welcome to reach out anytime. You can contact me most easily by phone/text at 540-578-0102 or by email here. All the best to your and your family as this new school year begins... and if you don't have anyone in your life starting a school year, then just get excited about the eventual return of cooler temperatures as we head into the autumn months. :-) | |
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What Is Median Days On Market Hiding These Days? |
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 At first glance, homes are going under contract just as quickly this year as last year, as shown by looking the first six months of each of those years... First Half of 2023 Median Days On Market = 6 Days First Half of 2024 Median Days On Market = 7 Days But... # Homes Taking More Than A Month To Go Under Contract... First Half of 2023 = 157 of 610 (26%) First Half of 2024 = 209 of 658 (32%) # Homes Taking More Than Three Months To Go Under Contract... First Half of 2023 = 67 of 610 (11%) First Half of 2024 = 85 of 610 (14%) So... yes, the median days on market statistic is remaining relatively unchanged, but there are certainly more homes this year than last that are taking a big longer to go under contract than sellers might have otherwise thought or hoped. | |
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Annual Home Sales Have Been Declining For Two Years But Might Be Rising Again In 2024 |
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 The green bars above show years when the number of home sales (per year) increased compared to the prior year. The red bars above show years when the number of home sales (per year) declined compared to the prior year. The past two years (2023, 2022) showed declines compared to the previous year -- but we seem likely to see an increase in 2024. Home Sales In The First Six Months of 2023 = 610 Home Sales In The First Six Months of 2024 = 658 Perhaps we'll be able to add another green bar to the chart above for 2024, showing an increasing number of annual home sales, yet again. | |
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Midway Through 2024, Home Sales Are Increasing But Sales Price Increases May Be Slowing |
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 Happy Thursday... and... Happy Free Slurpee Day! ;-) We are officially halfway through 2024! Wow! It has been a whirlwind of a start of the year... and a HOT start to summer. I enjoyed seeing many of you at Red Wing Roots Music Festival earlier this summer, and I am looking forward to several upcoming trips with my family. I recently ran in VA Momentum's Valley 4th Run (5K) and felt both accomplished and old to have been an age group winner. Accomplished for winning my age group... and old for having moved up to the 45 - 54 age group... which is probably also why I was able to win my age group. ;-) But, as a client pointed out... better to feel accomplished and old... than to just feel old!  Before we get started on the latest data on our local housing market, each month I offer a giveaway for readers of my market report. This month I'm giving away a $50 gift card to Broad Porch Coffee. If you haven't checked out their new location on Court Square, you should. I recommend the bread pudding... and many other items on their food and drink menu. Click here to enter to win the gift card. And now, let's take a look at what has been happening in our local housing market over the first half of 2024...  The chart above captures all home sales in Harrisonburg and Rockingham County as reported in the HRAR MLS. I'm noting a few things... [1] Despite a 9% decrease in sales when we compare the past 12 months to the 12 months before that... there has been an 8% increase in home sales when comparing the first six months of 2024 to the first six months of 2023. So... home sales seem to be increasing again in 2024 as compared to where things were in 2023. [2] We have only seen a 3% increase in the median sales price when comparing the first half of 2024 to the first half of 2023... compared to a 7% increase when we look back 12 months compared to the prior 12 months. So... it seems that price increases may be slowing a bit. Read that again, though, prices are still increasing... just more slowly than they had been. But let's dig a bit deeper into a few subsets of the market, starting with detached homes...  When looking only at detached homes (which does not include duplexes, townhomes or condos) we find... [1] There have been 7% more home sales in the first half of 2024 compared to the first half of 2023... which is pretty similar to the 8% increase in the overall market. [2] The median sales price of detached homes has increased 10% in the first half of 2024 to a median sales price of $385,150. That is to say that half of single family homes sold in the first half of 2024 sold for $385,150 or more... and half sold for $385,150 or less. Now, how about those attached homes...  When looking only at attached homes (duplexes, townhomes, condos) we find that... [1] There have been 9% more attached home sales in the first half of this year as compared to the first half of last year. [2] The median sales price of attached homes has risen 9% to $310,000. Again... that means that half of attached homes (that have sold) have sold for $310K or higher, and half sold for $310K or lower. Now what about just the City of Harrisonburg...  It has been a bit harder to find a home to buy in the City this year... with 14% fewer homes selling in the first half of the year as compared to the same timeframe last year. At least part of this is explained by the large number of new homes being built in the County and the small number being built in the City. Without much "for sale" housing being built in the City, the number of homes selling in the City relies almost entirely on resale homes -- current homeowners deciding to sell. Perhaps the limited supply of homes selling in the City is why we have seen a larger (16%) increase in the median sales price of homes sold in the City thus far in 2024. In contrast, in the County...  Perhaps due to the larger number of new homes being built in Rockingham County, we have seen a 16% increase in the number of home sales taking place in the County in the first half of this year compared to the first half of last year. The median sales price, however, has only increased by 3% in Rockingham County compared to the 16% referenced earlier in the City of Harrisonburg. Since I've mentioned new home sales a few times, let's take a look at what is happening there...  As shown above, we have seen a 39% increase in new home sales in the first half of this year (191) compared to the same timeframe last year (137) though this really just brings us back to the same approximate amount that we saw two years ago (198) in the first half of 2022. Also, the median sales price of new homes has only increased 3% over the past year... from $343K-ish to $353K-ish. And if we strip out all of the new homes, here's what we find in the resale market...  Despite an increase in the overall number of homes that are selling in Harrisonburg and Rockingham County... there has actually been a 1% decrease in the number of existing homes that are selling. That's a small change, but it is headed in the opposite direction of our overall market. If the smaller number of existing home sales is at all related to a decreased number of sellers being willing to sell their homes, that might explain the slightly higher increase in the median sales price of existing home sales this year (+6%) as compared to the increase in the median sales price of all homes (3%). OK, taking a breath now... that's all of the charts and numbers. Now let's allow some graphs to help us visual learners understand the latest trends in our local real estate market...  We saw a LOT of home sales in May 2024... 144 of them... compared to only 114 the prior May. This left me at least partially wondering whether we would see fewer home sales this June than last June due to that particularly busy May. But this June outperformed last June, even if not by as much as the month of May. These two months of stronger sales (May, June) compared to last year have contributed to the overall increase in home sales between the first half of 2023 and the first half of 2024. Which is shown... here...  After several years (2022, 2023) of declining numbers of home sales in Harrisonburg and Rockingham County, perhaps we will see an increase in 2024. Given the increase from 610 sales to 658 sales in the first half of 2023 and 2024, it seems likely that we will finish out 2024 with more than the 1,206 home sales seen last year. You can also see that turnaround in the pace of home sales here...  The blue line above is tracking the number of home sales taking place in a year's time, measured each month. As you can see, that metric has started to trend upwards again over the past six-ish months after over a year of declines. The green line above shows the median sales price, which has been steadily increasing for years. The median sales price is still increasing, but those increases might be slowing. Technically, the median sales price decreased a bit over the past month, but only by $35, so we'll wait to see what happens over the next few months before jumping to any conclusions. Here's another look at those same metrics of quantity of sales and home prices...  The green line (median sales price again) clearly seems to be going up (increasing) more slowly in 2024 than it has in previous years. Keep in mind, though, that the rate of price increase over the past few years has been 10% -- per year -- so a smaller increase in prices would certainly be expected at some point. The graph above also shows a few more past years history of the number of homes selling. The 1,206 homes sold in 2023 was the smallest number in more than five years (while not pictured - it was the slowest year since 2014) but we might see more home sales in 2024 than we did in 2023. Interestingly... when we strip out the attached homes (duplexes, townhouses, condos) we actually see a more steady increase in median sales prices...  And when we look only at the duplexes, townhomes and condos we see that slow down in price increases more clearly...  Shifting gears a bit, let's look at contract activity to take a guess at what the next few months of home sales might look like...  June marks the fourth month of stronger contract activity when comparing contracts signed this year to the same month last year -- though the contract signing frenzy cooled a bit in June. These stronger months of contract activity likely mean we will continue to see steady increases in home sales over the next few months. This same trend is seen when tracking pending sales...  Pending sales is a measure of how many homes are under contract, waiting to make it to settlement. There are currently 308 such homes... as compared to only 261 a year ago. This pending sales total in 2024 (red line) has been tracking well above where things were a year ago (blue line) since the start of the year. Lots of buyers and sellers signing contracts sometimes leads to lower levels of homes available for sale...  The last few months of strong contract activity has been followed by steady declines in the number of homes available for sale. Inventory levels have dropped from 185 homes for sale to 152 homes for sale over the past two months. These inventory levels in 2024 (red line) are still higher than they were a year ago (blue line), but that might change within the next few months. With so many homes going under contract, are they going under contract more quickly?  It seems so! The median "days on market" has been trending back downward again over the past few months... and the past year (plus) of data suggests that we might be starting to see some seasonality in this metric once again. In years gone by we would see homes go under contract more quickly in the spring/summer/fall than they would in the winter... though for the past few years (due to Covid, low interest rates) we saw homes go under contract rapidly regardless of the time of year. It seems we might be headed back to a market with a bit more seasonality when it comes to how quickly buyers are contracting to buy homes. But... I will also point out that this median days on market figure does not clearly show that there are plenty of homes that are taking longer than a week (or longer than a month) to go under contract. All homes are not going under contract within seven days... and while most homes are... that "most" is only 51% per how a "median" calculation works. Finally (alert, alert - last graph) mortgage interest rates have been bouncing around this year... but trending downward most recently...  Way back on the far left edge of this graph (above) you'll see that rates were below 5% in early 2022... but they have been above 6% since September 2022, and have been above 7% for six of the past 12 months. It has been a topsy-turvy world when it comes to mortgage interest rates over the past year. Some buyers may have purchased when rates were as high as 7.25% or 7.5%... though today's buyers are likely to be locking in below 7%. I am cautiously optimistic that we might get back down to the 6% - 6.5% range in 2024 or early 2025, but mortgage interest rate trends have been anything but predictable lately. And that brings us to the end of this month's overview of our local housing market. If you made it through all of the charts and graphs, kudos to you for educating yourself on the intricacies of our local housing market. If you plan to buy a home in the second half of 2024... get pre-approved for a mortgage if you haven't already and be sure to go see new listings of interest quickly once they hit the market given that many are still going under contract in a matter of days. If you plan to sell your home in the second half of 2024... you will likely still find selling conditions to be quite favorable, with high levels of buyer interest depending on your price range, property type and the location of your home. If I can be of help to you as you explore the possibility of buying a home, or selling your home, feel free to reach out to chat. You can reach me most easily by phone/text at 540-578-0102 or by email here. I hope you enjoy the remainder of your week (high temp of only 80 degrees tomorrow!) and that you find some time to get away this summer to relax and spend time with family and friends. | |
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Neighborhoods With 10 Or More Sales In The Past 12 Months |
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 Over the past 12 months we have seen 1,251 home sales in Harrisonburg and Rockingham County as reported in the HRAR MLS. Where have all of these home sales been located? Let's start by taking a look at the neighborhoods where we have seen the most sales over the past 12 months. The graph above shows the neighborhoods that have had at least 10 home sales over the past 12 months. The leader of the pack is Wingate Meadows where 107 homes have sold over the past 12 months -- followed by Massanutten, Cobblers Valley and Congers Creek. The green bars above are neighborhoods where most or all sold homes were new homes -- whereas the blue bars are neighborhoods where most or all have been resale homes. In summary... Over the past 12 months a total of 481 home sales have taken place in these neighborhoods shown above... which is 38% of all home sales in all locations. Of these 481 home sales in these neighborhoods... 154 were in (mostly) resale neighborhoods 327 were in (mostly) new neighborhoods | |
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Are Homes Staying On The Market Longer These Days? |
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 Some homes certainly are staying on the market longer these days than they have been over the past few years. We haven't seen a noticeable shift in the "median days on market" statistic that I track on a monthly basis, but it is no longer the case that nearly all homes that are listed for sale go under contract within a week. For example... 1. There are (22) resale homes currently on the market with a "Harrisonburg" or "Rockingham" mailing address (ignoring towns or far flung properties) that are priced under $400K and have been on the market for at least a week. 2. Of those (22) homes, there are (18) that have been on the market for at least two weeks. 3. Of the (133) resales homes that have sold in that same geographic area over the past three months, only (76) had a "days on market" of a week or less, and (44) of them took longer than two weeks to go under contract. So, when we list your home for sale, will it be "off to the races" with an offer being received (and a contract signed) within days? Maybe -- but maybe not. Plenty of homes are taking longer than a week to sell -- and no, that does not necessarily mean that nobody will ever want to buy your house. :-) | |
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How To Best Understand How Home Values Are Changing |
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 Full Disclosure: I have more questions than answers today. In the first five months of this year versus last year...
Wait, what!? The detached homes that sold in the first five months of this year sold at prices that were 13% higher than last year... and attached homes sold at prices that were 15% higher than last year... but when you combine the two data sets the median sales price is only 5% higher? Yes, that is correct. My first theory to try to explain this was that maybe more detached or attached homes sold in one year versus the other. But, it seems not... 2023: 68% detached, 32% attached 2024: 67% detached, 33% attached Next up I looked at what happens when we take new construction homes out of the mix. When looking at home sales in the first five months of this year versus last year, and when only looking at resale homes, not new homes...
That is certainly much less confusing than the first set of numbers. Where do we go from here? 1. I want to see how some of these numbers change as we have more months of 2024 data to work with. 2. I will be thinking further about how to best understand changes in home values in this area... perhaps it is best to only look at resale home sales, or just look at resale detached home sales? 3. I will welcome the thoughts, theories, guesses and questions from my readers. :-) Yes, that's you. | |
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May 2024 Home Sales Outpace Projections, With Median Prices Increasing More Slowly |
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 Happy Monday, friends, and Happy Summer! Summer is well underway over here at the Rogers household, with Luke having finished his first year of college and Emily wrapping up 10th grade. The start of our summer has included getting away for a few days to the lake for some water skiing and tubing, celebrating my niece's graduation (congrats Sofia!) and looking forward to Red Wing Roots Music Festival in less than two weeks! I hope your summer is off to a great start and that you'll find some time to relax or get away for a few days at some point this summer.  Before we dive into the lake, or rather, the real estate data... each month I offer a giveaway for readers of my market report. This month I'm giving away a $50 gift card to Bruster's. Yes, I realize that is a lot of ice cream... but they have SO many delicious flavors! Click here to enter to win the gift card. Now, on to the latest happenings in our local housing market...  Above you'll find the basic numbers related to how many homes are selling in Harrisonburg and Rockingham County and the prices at which those homes are selling. Here are a few things that stand out to me... [1] Home sales this May (last month) were much higher than expected... with 20% more sales than last May. [2] Despite seeing a 15% decline in the number of home sales in the past 12 months compared to the 12 months before that, we are now seeing a 7% increase in year to date home sales, thanks in part to the strong month of sales in May. [3] You might recall that for the past few years we have been seeing a (surprising) 10% increase in the median sales price each year. The median sales price over the past 12 months ($336,010) is now 8% higher than in the 12 months before that -- and the year to date median sales price is only 5% higher than in 2023 year to date. Thus, it seems that the median sales price may be increasing a bit more slowly this year than in recent years. Looking for a moment just at detached single family homes...  Sometimes it can be helpful to look only at detached home sales to see how they are comparing compared to the overall market. This month I am noting that the median sales price of all homes sold has only increased by 5% year to date (from $325K to $340K) but the median sales price of detached homes has increased by 13% year to date (from $342K to $385K). If you're trying to buy a home, you are likely paying a higher price now than you would have a year ago. If you are trying to buy a detached single family home, you are likely paying a much higher price now than you would have a year ago. As one final subset of the overall market data, here's a look at only existing homes... excluding new construction homes...  If you don't happen to want to buy a new home (based on their size, location, price, etc.) then you'll be focusing just on resale homes -- and there have been far fewer of those home sales over the past 12 months. We have seen 17% fewer resale home sales over the past 12 months (compared to the 12 months before that) mostly due to sellers not selling - rather than buyers not buying. In slightly better news, we have only seen a 2% decline in existing home sales year to date, so as to say that the decline is slowing in the number of existing homes that are selling. Perhaps it is unsurprising then that the median sales price of existing homes is 10% higher this year to date compared to last year to date, which shows a higher rate of increasing prices for existing homes as compared to the overall market. Now, I started off by mentioning that May home sales exceeded expectations... and you can see that more clearly here...  April home sales (106) were much (!) lower than last April (124) but May did not follow that pattern. After only seeing 114 home sales last May... there were 137 this May! Adding up those two months to see how April+May is tracking year over year, we find 243 home sales this year compared to 238 home sales last year. As you can see from my abundance of purple arrows above, it's hard to say where things will head in June... will home sales drop below 2023 again, or match 2023, or exceed 2023? It's hard to know for sure, but keep reading for the latest on contract activity and pending sales, both of which should give us somewhat of a hint of what is ahead. But first, let's see how this year stacks up compared to prior years...  We have been seeing a decline in the number of home sales over the past few years (2021 to 2022 as well as 2022 to 2023) but that might be reversing itself in 2024. The 525 home sales we have seen in the first five months of 2024 puts us ahead of 2023, though certainly still behind 2022 and 2021. Stay tuned to see if we can come out ahead of the 1,206 home sales we saw last year. Next up is a monthly look at rolling 12 month trends...  The top (green) line shows (barely, if you squint) what I have already mentioned in this month's report... median sales prices are increasing, but maybe not quite as quickly over the past six months as compared to their trajectory over the past few years. But, we'll need to continue to watch this metric to see if price increases are indeed settling down a bit. The bottom (blue) line shows that after almost two years of a downward trend in the number of homes selling in Harrisonburg and Rockingham County... we might finally be seeing things level out and increase a bit. We peaked above 1,700 home sales a year... and over about two years then saw things bottom out at just over 1,200 home sales a year. Will this trend slowly make its way back up to 1,300 home sales a year? If so, how soon? I mentioned new vs. existing home sales a bit earlier, but here's how the breakdown looks over the past few years...  We have seen a steady decline in the number of existing homes selling in our market... and in the percentage of home sales that are existing homes. Three years ago 81% of home sales were existing homes and only 19% were new homes. This year only 71% of homes that are selling are existing homes and 29% are new homes. Many homeowners have low mortgage interest rates on their existing mortgages and thus do not want to sell their homes -- which is contributing to lower numbers of existing home sales. We are also seeing many more new home communities in our area -- from local builders, but mostly from regional builders. I suspect we will continue to see new homes making up 25% or more of all home sales over the coming years. Now, for predicting the future...  After a strong month of sales activity in May, one might wonder what the next few months will hold. As shown above, we have now had three straight months of solid contract activity (red line) compared to those same months last year (blue line). Over the past three months, 423 buyers (and sellers) have signed contracts compared to only 364 in the same three months last year. These strong levels of contract activity suggest that we will continue to see at least several more months of strong home sales. Trends in pending home sales also supports that theory...  A year ago (blue line) there were only 275 homes under contract (pending) in Harrisonburg and Rockingham County. Today, that has risen to 336 homes under contract in our market. The overall declines in the number of homes selling may be behind us at this point given recent months of strong contract activity and the current trends in pending home sales. Perhaps unsurprisingly, inventory levels are also declining a bit...  Back in July 2023 we saw inventory levels start to rise... and they have stayed higher than expected since that time. But... at least as of today, inventory levels are trending back down a bit. Will this trend continue? Or is it a one month blip? Stay tuned. Keep in mind that even as inventory levels rose from the 100-130 range to the 180-200 range, all of those levels are well below pre-COVID inventory levels. Days on market -- how quickly homes go under contract -- is also keeping things interesting lately...  After several years of a median days on market of four or five days, we started to see this metric drift upward in late 2022, corresponding in large part to increases in mortgage interest rates. Last summer we saw days on market start to decline again (back down to five days in August 2023) but then it rose through early 2024. Has the market slowed back down since that time -- or are we starting to see a seasonality to this metric? We'll need to see how things develop as we progress through the remainder of the summer months. And, finally, those mortgage interest rates...  Two years ago the average rate was just above 5%, and rates peaked last Fall just under 8%, but the average 30 year fixed mortgage interest rate has been consistently above 6.5% for a year now... and there are not any indications that we'll see anything below 6.5% anytime soon. Most home buyers (or would be home buyers) have now adjusted to this new interest rate environment, and hopefully nobody is planning to wait to buy until rates get below 5%. There is talk of mortgage interest rates potentially coming down some over the remainder of the year, but we've heard that talk quite a few times over the past six (+) months and it hasn't measurably happened yet. As I bring this monthly market recap to a close, I'll point out that I post even more charts and graphs for your perusal each month over here. And finally, as we look ahead through the summer and towards the fall... If you plan to sell your home in the next six months, let's chat sooner rather than later about market conditions, your home preparations, your timing objectives and more. If you are considering a home purchase in the next six months, I'd be happy to chat with you about the buying process, the market and introduce you to some mortgage lenders who can help you consider your financing options. Reach out to me anytime via phone/text at 540-578-0102, or by email here. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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