Analysis
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Thank Goodness Home Prices Are Not Increasing Very Quickly! |
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 There have been two very unique four year periods in recent history where the local median sales price increased to $192K. When home values increased between 2003 and 2006 up to a high of $192,983 -- they did so by increasing by 13% - 17% per year!! As we now know, this was NOT sustainable! Household income was not increasing at that same rate during that timeframe, house prices became too high for many to afford, and we experienced a significant market correction downturn. In contrast, over the past four years our median sales price has increased by 1% - 4% per year up to last year's level of $192,500. This seems like MUCH more sustainable growth and provides hope that today's home prices are stable and will continue to slowly increase over time. | |
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Contract Activity Slows, Slightly, in First Half of 2017 |
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 As shown above, fewer buyers (696) signed contracts in the first half of 2017 as compared to the first half of 2016 when 718 buyers signed contracts to buy homes in Harrisonburg and Rockingham County. Based on all of the conversations I have had with buyers, lenders and Realtors, this is likely primarily a result of low inventory levels. The buyers are there -- ready to buy -- the sellers (and their homes) are not. Of course, there are homes listed for sale right now, but quite a few less than we'd normally see at this time of year, which leaves many buyers on the sidelines -- with the desire to buy, but without a house for sale that is a good fit for them. | |
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Where Have All The Townhouses Gone? Buyers Have Bought Them Every One! |
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 OK, admittedly, there are still SOME townhouses remaining to be purchased in Harrisonburg and Rockingham County -- but the inventory levels are declining relatively quickly. In fact, there are now just 68 townhouses (and duplexes and condos) for sale in all of Harrisonburg and Rockingham County -- which is a 59% decline from two years ago. Wow! Some part of this is that buyer demand is increasing -- and the situation also isn't helped by the very small number of new townhouses that are being built these days. Over the past 10-15 years we saw many new townhouse developments that (at the time) fell into that price range, including:
Now, however, there are significantly fewer options available when it comes to newly built townhouses in or near Harrisonburg, under $200K....
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Significant Decline in Number of Houses for Sale in the City of Harrisonburg |
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 Are you having difficulty finding a home to purchase in the City of Harrisonburg? You're likely not alone! As shown above, there has been a rather significant decline in the number of homes for sale in the City of Harrisonburg over the past two years -- in fact, inventory levels have fallen 58% over the past two years!! As such, if you're buying a home in City (or if you're going to try) you must know the market, know the process, know your buying power, and closely monitor new listings! Learn more about our local real estate market via my most recent monthly market report....  You can download the full report as a PDF or read the entire report online. | |
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Home Sales Steady in Harrisonburg, Rockingham County in First Half of 2017 |
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Check out fantastic home for sale on Central Avenue! June 2017 flew by like a blur -- and although home sales were a bit slower than in May 2017 -- nearly all housing market indicators are still showing signs of a robust and active local real estate market. I just published my most recent monthly market report, and as usual, you can read on for an overview, download the full report as a PDF, read the entire report online, or tune in to my monthly video overview of our local housing market...  OK -- now, back to a high level overview of where things are with the local real estate market....  As shown above, most market indicators are looking good....
 As you can see, above, home sales dropped from 148 in May to 134 in June this year -- but last year, they increased from 133 in May to 152 in June. It is hard to say why this trajectory is reversed this year -- it may have to do with when sellers happened to be ready to sell, and when buyers happened to be ready to buy this year as compared to last year. Regardless, the net change from last year to this year is a decline of only three home sales when combining May and June data. Looking forward, I believe we'll see a further decline in closings in July, or at least that is what has happened in most recent years. Unless contract activity convinces us otherwise....  Looking at when buyers are signing contracts, it is notable that we have seen a steady stream of buyers (132 - 140 per month) over the past four months. This is a total of 542 contracts signed in the past four months -- as compared to 560 last year during the same timeframe. As we move forward, we should have at least two more months of 100+ contracts before contract activity inevitably starts to slow in September and October. And what are all of these buyers choosing from when they contract on a home?  It seems that buyers are choosing from fewer and fewer homes these days! Inventory levels have been hovering around 400 homes for sale over the past six months -- and the normal influx of new listings in the Spring selling market has not been able to keep pace with a higher level of buyers buying homes. As such, we have not seen the typical increases in inventory levels between the Winter and Spring market -- there are actually FEWER homes on the market now than there were this past February! OK - now for a shocking statistic of the month....  Did you catch that, above, in yellow? When looking at the homes that sold in the City of Harrisonburg during June 2017 -- the median "days on market" for those home sales was 8 DAYS!?! So, half of the homes that sold went under contract within 8 days of being listed for sale. Wow! I guess that's what you get with increasing buyer demand and decreasing inventory levels. There are actually quite a few astonishing tidbits in this month's report, but I'll get into those in the coming days on my blog. Until then -- feel free to download and read my full market report as a PDF, or read the entire report online. And, my reminders for buyers and sellers last month still apply.... SELLERS -- even though it is a seller's market in many price ranges right now, you must still focus on price, condition and marketing. For further reading on buying or selling in this area, check out.... | |
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Contract Activity Strong(er) Again in June 2017 |
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 Well, things don't seem to be slowing down yet in our local residential real estate market! Looking at the first 25 days of this month, 109 buyers (and sellers) signed contracts to by (and sell) homes in Harrisonburg and Rockingham County. Comparatively, only 104 buyers (and sellers) did so in the same timeframe last year. So -- the pace of contracts is somewhat slower this month than last month (as is typical), but this June is more active than last June. More sales -- fewer listings -- it is somewhat surprising that we haven't seen more of a upward shift in sales price! | |
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Have you missed out on the majority of 2017 home buyers at this point? |
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 Short answer -- yes, but no. :) Longer answer.... In a recent conversation with a home seller, they wondered if they had missed out on the best time to sell their home since they wouldn't be ready to get their house on the market until July 1. Let's take a look at what last year looked like from the perspective of when buyers signed contracts to purchase homes. Based on the graph above....
As usual -- every segment of the market (based on price, location, property type) is a bit different -- so let me know if you want to chat more specifically about your home, and what it would look like to list your home for sale in the coming month to be aiming for one of these late-summer / early-fall buyers. | |
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58% Drop in Under $200K Listing Inventory |
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 One of the most striking changes in inventory levels has been the "under $200K' market, where we have seen a 58% decline in the number of homes for sale. A small part of this is the slow and steady increase in the median sales price -- causing some homes to no longer fall within this price bracket. Another significant reason for this decline is a slow and steady increase in the number of people trying to purchase homes in this price range. The final component is the lack of new construction in this price range. Increasing demand and decreasing supply is usually addressed via builders jumping in and starting to build new homes (or perhaps townhomes, in this case) to help bridge this gap between low supply and high demand. If we continue to see increasing demand, decreasing supply, and no new construction, we may start to see faster than normal increases in the sales prices of these properties as buyers compete for a slim number of listings. Read more about our local housing market via my most recent monthly market report....  | |
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Just HOW great were May home sales? |
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 Just the BEST month of May EVER! :) Indeed, as shown above, it seems that the 148 home sales seen in May 2017 was the most home sales we have EVER seen during a month of May. Now -- to see how things turn out in June! Read more about our local housing market via my most recent monthly market report. | |
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Best May Home Sales Ever! |
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Check out this immaculate rowhouse at Preston Lake with a rooftop terrace! Wow! Both the temperatures and our local real estate market are certainly heating up! I just published my most recent monthly market report, so apply your sunscreen, read on for an overview of the blistering sales pace of 2017, download the full report as a PDF, or read it online. But first -- for those that would rather listen/watch than read -- tune in to my monthly video overview of our local housing market...  OK -- now, back to a high level overview of where things are with the local real estate market....  MORE HOMES ARE SELLING -- As shown above, we have seen a 5.51% improvement in the number of home sales in this area in the first five months of 2017 as compared to the same timeframe last year. Furthermore, looking at the past 12 months (1,338 sales) as compared to the prior 12 months (1,187 sales) we see a 12.72% improvement in the pace of sales. PRICES ARE SORTA-KINDA INCREASING -- Technically, the 2017 median sales price (January - May) of $189,000 is identical to where it was last year during the same time, however, over the past year the "rolling 12 month" median sales price has increased 4.16% from $185,000 to $192,700. So, we'll say that prices are sort-kinda-mostly increasing. HOMES ARE SELLING FASTER -- The median sales price of homes selling thus far in 2017 has been 49 days. This is 23% lower than last year when it took a median of 64 days for homes to sell. This calculation is based on how many days it takes for a property to be under contract after it has been listed for sale.  Inventory levels are LOW right now (more on that later) so when April concluded, I had some serious doubts about whether we would be able to match the 133 home sales in May 2016. But -- buyers (and sellers, I suppose) didn't disappoint -- there were an astonishing 148 home sales in May 2017! I'll delve into this history a bit more in coming days on my real estate blog, but take my word for it for now -- there have NEVER been 148 home sales in the month of May in Harrisonburg and Rockingham County!  What is to come, you might ask? I'd say more sales -- maybe not quite 148 of them -- but hopefully 135 to 145 of them next month. After all, as shown above, there were 133 more contracts signed in May 2017 -- just a slight decline from the 140 and 137 seen in March and April.  As mentioned previously, inventory levels are DROPPING! There are now only 394 homes for sale in Harrisonburg and Rockingham County -- which is 32% fewer than one year ago! Of note -- we only seem to have had sub-400 inventory levels once anytime in the past MANY years -- in January 2017. That wasn't too surprising -- inventory levels have been declining, and who wants their house on the market in January, anyhow? But now, in the month of May (June, actually)? Inventory levels below 400 are quite surprising at this time of year.  Oh -- but it gets worse -- for buyers, that is. Looking at homes under $200K, in ALL of Harrisonburg and Rockingham County, there are only 107 homes for sale!? This includes single family homes, townhouses, duplexes and condominiums. This marks a shocking 57% decline in this price range of homes in our area. OK -- there is a pile of additional information bout our local housing market in my monthly market report. If you are interested in more, feel free to download the entire thing as a PDF, or read it online. And, my reminders for buyers and sellers last month still apply.... SELLERS -- even though it is somewhat of a seller's market in many price ranges right now, you must still focus on price, condition and marketing. For further reading on buying or selling in this area, check out.... | |
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All Square Footage is NOT Created Equal |
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 So -- your neighbor's 2400 SF, circa 2000, 4 BR, 2 BA home just sold for $300K. It's probably reasonable to think that your 2400 SF, circa 2000, 4 BR, 2 BA home will also sell for $300K, right? After all, you have made the same updates (systems and cosmetic) over time -- and you're on the same street! Well, maybe -- but maybe not! Consider the possibility that....
These two homes will not be seen as having an equivalent value -- not by potential purchasers and not by an appraiser. Above grade square footage has a higher value attached to it -- both specifically by appraisers, and generally by purchasers. Even if all of the other factors (condition, age, location, bedrooms, bathrooms) are the same between two houses, if one has a significant portion of the square footage in the basement then it will be seen as less valuable than the home that has all of its square footage above grade. | |
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Fewer and Fewer Homes For Sale Under $200K |
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 As shown above -- over the past nine years there have always been at least 200 (and usually around 300) homes for sale under $200K. Well, those times may be behind us now. Ever since November 2016, we have seen fewer than 200 homes for sale under $200K. Based on rapid buyer activity, and very little new construction under $200K, this is not likely to change in the near future, if ever! | |
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Will Buyer Activity Increase or Decrease in May and June? |
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 History does not tell a consistent story here. Last year, contract activity (buyers -- and sellers -- actually signing contracts) decreased between April and May and then further in June. The two prior years (2014, 2015), however, there was even MORE contract activity in May and June as compared to April. So, as a seller, it's hard to say if we've seen the peak number of buyers (per month) already in 2017, or if we'll see even stronger months of buying activity over the next 45 days. Stay tuned for more details, and until then, feel free to check out my most recent market report for lots of information about our local residential real estate market at HarrisonburgHousingMarket.com.  | |
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Home Sales Slow Slightly in April, Perhaps Due To Low Inventory Levels |
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Don't miss out on this fantastic four bedroom home in Barrington -- details here. OK -- now for your local real estate news! Happy May, everyone! I have published my monthly market report, which you can download as a PDF, or read online. For the abridged version of the most important things for you to know, read on.... First -- for those that would rather listen/watch than read -- tune in to my monthly video overview of our local housing market. There's a someone humorous technical blooper 90% of the way through. It does not affect the market data being conveyed, so I left it in there for your enjoyment. :)  OK -- now, back to a high level overview of where things are with the local real estate market....  OK -- several potential stories to unpack here....
As shown above -- April 2017 was another active month of buying activity -- following closely after March's 140 contracts with 137 in April. Again, though, this does not quite stack up against the 158 contracts signed last April. The next few months could be even stronger (see 2015) or even slower (see 2016) -- and some of that may relate to how many choices buyers have from an inventory perspective. OK -- inventory, inventory, inventory -- let's get down to it....
As shown above, today's buyers have significantly fewer homes to choose from -- with a 29% decline in the number of homes for sale in Harrisonburg and Rockingham County. That said, it gets even more striking in some price ranges....
That last one is shocking, and perhaps problematic -- our most active price range (average of 60 sales per month) has seen a significant drop in the number of home available to buyers. One year ago, these buyers could have selected from 256 homes -- today, only 125! OK -- there is a pile of additional information bout our local housing market in my monthly market report. If you are interested in more, feel free to download the entire thing as a PDF, or read it online. And, my reminders for buyers and sellers last month still apply.... SELLERS -- even though it is somewhat of a seller's market in many price ranges right now, you must still focus on price, condition and marketing. For further reading on buying or selling in this area, check out.... | |
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Buyers have to be ready to act FAST these days! |
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 So many homes these days are going under contract QUICKLY and sometimes with MULTIPLE OFFERS! Depending on the house, and the location, and the condition, and the price, it may garner a lot of attention very quickly from buyers. This is mainly a result of the very low inventory levels we are seeing right now in many price ranges. So, what does it mean to be ready as a buyer?
The new listings are coming -- and one could be just what you are looking for -- will you be ready? | |
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Can Home Buyers Keep Up The Pace in April 2017? |
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 Last year (2016) was a startlingly strong year in the residential real estate market in Harrisonburg and Rockingham County -- and thus far, 2017 seems as if it will hold its own. The graph above shows the number of contracts signed per month over the past three months of 2017 (orange) -- and how that compares to the pace of contract signing in 2016. As you can see, despite a slightly slow start in January, both February and March of this year showed MORE contracts being signed than the year below. How, then, are we doing thus far in April??? Could we possibly see a jump all the way up to 158 contracts signed??? Here's what we can see so far.... April 1 - 18, 2016 = 91 contracts April 1 - 18, 2017 = 92 contracts ! ! ! So, yes, it seems April might continue on the strong streak of home sales in 2017! | |
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Is a balanced market always this fleeting? |
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 The graph shown above is an illustration of changing inventory levels (blue line) and the number of buyers buying in a six month period (orange line). The point at which the two lines meet is when there was exactly six months of inventory of homes on the market for sale. All of the months prior to when the lines met are times when (to varying degrees) there were many more homes on the market (housing surplus) than there were buyers to buy them (low demand). All of the months after the point when the lines met are times when (to varying degrees) there have been far fewer homes on the market (housing shortage) than there are buyers to buy them (high demand). Perhaps what has surprised me the most in the past year is how quickly the balance seems to be swinging towards a seller's market (low supply, high demand) when I thought we might stay in a relatively balanced market (high supply, high demand or moderate supply, moderate demand) for some time. | |
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Half As Many Options for Buyers Under $200K |
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 Housing inventory levels are declining in Harrisonburg and Rockingham County, but perhaps none so precipitously as the under $200K market. As shown above, there are HALF as many homes for sale under $200K now as compared to one year ago. This leaves many buyers in this price range in a difficult spot of trying to find a home to purchase that will fit their needs. I believe some of this is related to a lack of new construction of homes in this price range. Read more about our local housing market at HarrisonburgHousingMarket.com. | |
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Strong Home Buying (Contract Signing) Activity in March 2017 |
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 This beautiful home is 2930 Brookstone Drive - check it out here! Wow! March was a wild and crazy month in the real estate world in Harrisonburg and Rockingham County. Let's put it this way -- in the past three years, there have only been three months when more buyers have signed contracts than in March 2017! But I'm getting ahead of myself -- read on.... As you'd guess from the header image above, I have published my monthly market report, which you can download as a PDF, or read online. For the abridged version of the most important things for you to know, read on.... First -- for those that would rather listen/watch than read -- tune in to my monthly video overview of our local housing market....  And now, some general indicators of market performance....  Some basic notes from this general market overview:
As shown above, each month of 2017 (so far!) has barely surpassed the same month of the previous year. That said, we may be about to see a significant change in that trend because....
As shown above, homes were flying off the shelf (buyers were signing contracts) faster (slightly) than I can eat donuts from Peace, Love and Little Donuts. No joking, though, as noted above, the 140 signed contracts in March 2017 exceeds all but three months from the past three years. So -- it seems likely that we'll see a pop in April 2017 home sales! With all of these homes selling, are we running out of homes for folks to buy?
Why yes, we are! There has been a 30% decline in the number of homes for sale over the past year. And -- get this -- if we look solely at homes under $200K, there has been a 50% decline in housing inventory levels! OK -- so, more homes are selling, at higher prices, more quickly -- sounds good for sellers, right? Yes, but I would still remind all sellers that even in a seller's market it is still essential to focus on price, condition and marketing. And what is a buyer to do in some crazy times as these? Be prepared! Know the market, know the process, know your buying power, and monitor new listings closely! If you're interested in even more market data, read my full online market report, download the PDF, or click here to sign up to receive my real estate blog by email. Here are two handy references to prepare yourself to buy or sell a home.... | |
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Strong Home Buyer Activity Continues in March 2017 |
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 Buyers were at it again in March 2017 -- with a 10% increase in buyer activity in the first 26 days of March as compared to the same timeframe a year ago. Look for a strong month of closings in April based on these strong March contract figures! | |
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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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