Analysis
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Housing supply suddenly nearing healthy levels! |
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 "Housing Supply" is usually a comparison of how many buyers are in the market to buy as it relates to the number of sellers in the market to sell. Consider these two, very different examples....
In the first example, there are 6 "months of supply" on the market. If buyer demand stays steady (10 buyers per month) it would take six months to sell all of the existing inventory of homes for sale. In the second example, there are 60 "months of supply" on the market. If buyer demand stays steady (10 buyers per month) it would take 60 months (five years!) to sell all of the existing inventory of homes for sale. When there are six months of housing supply available, many analysts consider a housing market to be in a balance between buyers and sellers. If there are lower supply levels (for example, only three months of housing supply available) it would be a seller's market, with sellers having the upper hand as buyers fight over a small number of available houses. If there are higher supply levels (for example, 15 months of housing supply available) it would be a buyer's market, with sellers pining over the comparatively small number of buyers in the market. With that context, take a look at the chart above, which examines the number of months of housing supply available in several price ranges of our local housing market. You'll notice that many price ranges are approaching that balanced level of six months of available supply:
While many price ranges are now much closer to a healthy balance between sellers and buyers, keep in mind that:
If you're interested in even more specific data --- supply levels based on location, a custom price range, etc. --- just drop me a line at scott@HarrisonburgHousingToday. I am happy, as always, to provide custom analysis to help you make the best real estate decisions. | |
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Year End Report: Home Sales Up 9%, Prices Up 1% |
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 Having closed out 2012, we can say with certainty that the the local housing market has turned the corner, and brighter times are ahead.
Download the January 2013 Harrisonburg & Rockingham County Real Estate Market Report to pore over the details, or read on for highlights....  As shown above, while home sales declined (-29%) in December the year-end figures show an overall 8.8% increase in home sales during 2012. Furthermore, median sales prices increased (+0.57%) between 2011 and 2012.  As shown above, after a brief slow down during November, buyer activity increased again in December --- marking a 26% increase over December 2011.  Inventory levels have dropped again, down 15% over the past year to 572 homes on the market. This is a 27% decline over the past two years, and is definitely helping our local housing market return to a balance between buyers and sellers.  If you have questions about the local housing market, or if I can be of assistance to you with real estate that you own, or that you'd like to own, please be in touch. You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com. Oh, one last thing....here are a few articles I have written over the past month that might be of interest:
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When do the buyers start buying? March? April? |
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 At least last year, they start jumping into the market in good number starting in February! If you are planning to sell this Spring, let's start talking now about:
Let me know if I can be of help to you as you consider whether to sell your home this Spring. | |
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What Do Declining Inventory Levels Mean? |
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 Two and a half years ago (June 2010) there were an astonishing 1,015 homes on the market in Harrisonburg and Rockingham County – including single family homes, townhomes, duplexes and condominiums. As of yesterday, there were just 551 homes for sale in our local marketplace. This startling 46% decline in local housing inventory has far reaching implications for many of us in our local community. Homeowners are losing less sleep. The median price of homes in our area has declined 10% in the past six years – but what is telling is the trend in median prices over the past 18 months as inventory levels have declined. For the past year and half, median prices have hovered between $173,000 and $177,000 with very little variation. After 18 months without further declines in median sales prices, homeowners in our local area can relax a bit, knowing that their home's value is not continuing to decline. Would-Be Sellers are still waiting. As is evident from the continued declines in the number of homes for sale, we are not seeing a flood of would-be home sellers putting their houses on the market after having seen that home values have stabilized. If anything, it seems fair to say that the high inventory levels of 2006 were would-be sellers hoping to catch the tail end of the housing boom. Today, those would-be sellers that were not successful seem to be waiting to put their homes on the market until there are signs of increasing sales prices. That is certainly a very reasonable approach unless there is some specific impetus for selling – moving out of the area, a growing family, etc. Would-Be Buyers are simultaneously frustrated and elated. Many of today's home buyers are not finding very many homes that match what they are looking for in a new home. They often feel they are scraping the bottom of the barrel with the current low inventory levels. Yet at the same time, buyers realize that since we seem to be at the bottom of the market that their opportunities to buy a home at a greater price have been never been better. The added bonus for would-be buyers is the historically low interest rates – as low as 3.25% on a 30-year fixed rate mortgage. Home builders are dusting off their hammers. As home values declined over the past six years it became increasingly difficult for home builders to compete on price with homeowners who were selling their homes. As inventory levels have declined, however, buyers have had fewer options and prices have stopped declining. As a result, some home builders are starting to see renewed interest in their homes or subdivisions. While we are likely to see inventory levels start to increase again in the Spring, it is quite likely that we will continue to see historically low inventory levels over the next 12-24 months as our local housing market continues to recover. As always, not only do you need to understand the general market trends in our area, you also must dig deep to explore the specifics of the market that pertain to your particular home. For a thorough understanding of the overall local housing market, please refer to HarrisonburgHousingMarket.com. | |
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It has been years (at least 5) since we have seen inventory levels this low! |
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Today (this morning) is likely the low-water mark for the number of houses on the market in Harrisonburg and Rockingham County. But even as some houses start to come back on the market over the coming weeks and months it seems that inventory levels may stay significantly below where they have been for the past several years. These low inventory levels should help our local housing market continue to recover, especially given the low mortgage interest rates currently available to buyers. Just a reminder, those are currently hovering around 3.35%. | |
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2012 Year In Review |
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 Based on preliminary data as of the morning of Dec 31, 2012. | |
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The State Of The Massanutten Resort Real Estate Market |
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 As can be seen above, the pace of sales has recovered more quickly at Massanutten Resor than in our overall market.
While prices have fallen significantly over the past six years at Massanutten Resort (-26%) as compared to the overall market (-9%) the improvement over the past two years has been more rapid at Massanutten Resort (+4%) than in the overall market (-3%). The significant declines in price (-28%) and sales pace (-48%) at Massanutten Resort between 2006 and 2010 were likely due to the significant decline in second home purchases as housing markets softened across the nation. I believe we will see continued recovery in the Massanutten Resort market over the next few years, though it might be many years before we return to median prices as high as we experienced in 2006. | |
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Foreclosures up a bit in Harrisonburg, Rockingham County |
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 Foreclosures in the Harrisonburg and Rockingham County (shown in red above) are actually up a bit this year after having declined in 2011. In the first 11 months of this year there have been 225 completed Trustee Sales, whereas there were only 223 in all of 2011. Thus, look for more bank owned properties to be coming on the market in the coming months and likely well into 2013. While foreclosures have increased over the past few years (compared to historical norms) we still have far fewer foreclosures than many other parts of the country. Learn more about our local real estate market at HarrisonburgHousingMarket.com. View upcoming Trustee Sales at HarrisonburgForeclosures.com. | |
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Local Online Real Estate Resources |
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See below for a quick re-cap of several local online real estate resources that may be helpful to you as a home buyer, home seller, home owner, investor or developer in the Harrisonburg and Rockingham County area. Central Shenandoah Valley Property Search ScottPRogers.com Monthly Real Estate Market Reports HarrisonburgHousingMarket.com Ongoing Housing Market Analysis & Commentary HarrisonburgHousingToday.com Comprehensive Data on Harrisonburg Townhouse Communities HarrisonburgTownhouses.com New Home Communities HarrisonburgNewHomes.com Trustee Sales in Harrisonburg & Rockingham County HarrisonburgForeclosures.com Bank Owned Properties in Harrisonburg & Rockingham HarrisonburgREO.com Potential Short Sales in Harrisonburg & Rockingham County HarrisonburgShortSales.com Owner Financed Properties in Harrisonburg & Rockingham County HarrisonburgOwnerFinancing.com Lease/Purchase Properties in Harrisonburg & Rockingham County HarrisonburgLeasePurchase.com Property Transfers in Harrisonburg & Rockingham County HarrisonburgPropertyTransfers.com Do you have an idea for another online resource? E-mail me (scott@HarrisonburgHousingToday.com) and let me know what would be helpful to you! | |
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New Construction Is (Slowly) Making A Recovery |
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 The graph above shows the number of new single family homes sold per year in Harrisonburg and Rockingham County, per the HRAR MLS. We saw a 78% decline in these new construction single family home sales between 2005 (186 sales) and 2010 (41 sales). During the past two years, however, we have gradually seen the pace of such sales start to increase again --- with 41 sales in 2010, then 45 sales in 2011, and 48 sales in the first 11 months of this year. The median price per square foot of these homes has also stabilized around $129/$130 per square foot --- after rising as high as $150 per square foot. | |
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Local Home Sales Up 10%, Prices (Finally!) Stable |
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 NEWS FLASH --- with 11 precincts now reporting (ok, months) we are ready to predict the outcome of this race (ok, housing market) as a convincing win for homeowners. The pace of sales has increased 10% in 2012, and prices have (finally!) stabilized! Download the December 2012 Harrisonburg & Rockingham County Real Estate Market Report to pore over the details, or read on for highlights....  The pace of residential sales is up 10% in Harrisonburg and Rockingham County. We have been suspecting a strong comeback for 2012 for some time, but with November sales figures added into the mix we are now seeing a 10% increase in year-to-date sales as compared to 2011.  The median sales price threatens to stay at $175,000 eternally. After 20 straight months of hovering between $173K and $177K, I think it is safe to say that the median sales price has stabilized. Each data point above is a 12-month median sales price.  Inventory levels keep dropping. One reason the local housing market is slowly steadying itself is because there are fewer and fewer homes for sale. And no, that's not just the seasonal slow down --- as shown above, inventory levels have declined 17% over the past year. Click on the image below to download the full December 2012 Harrisonburg & Rockingham County Real Estate Market Report.  If you have questions about the local housing market, or if I can be of assistance to you with real estate that you own, or that you'd like to own, please be in touch. You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com. Oh, one last thing....here are a few articles I have written over the past month that might be of interest:
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Are national home prices up for the 8th consecutive year? |
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 I received several e-mails last night from clients who were a bit confused by the story WHSV ran yesterday about the housing market. Here are some clarifications.... "National home prices are up for the eighth consecutive year." Actually, prices are up for the eighth consecutive month, as measured on a year-over-year basis. An improvement for eight straight months is quite different than eight straight years. (source)"The homes that are selling the quickest are actually homes priced between $200,000 and $250,000." Average days on market is actually lowest for homes priced under $200K, not for those priced between $200K and $300K. (source - page 26)"Bridgewater, Dayton, southwest Rockingham county area. That's where we've had the most significant price increase. Prices have increased 12 percent in that area this year." Per my calculations, it's actually a 3.6% increase, not a 12% increase. The Median Sales Price for Single Family Homes in SouthWest Rockingham County in 2011 was $205,000. The Median Sales Price for Single Family Homes in SouthWest Rockingham County in 2012 (YTD) is $212,500.I agree with the overall sentiment of the news story --- the local housing market is improving --- but there were a few items in the story that ended up being misleading (presumably, unintentionally). Here's to improvements in national (and local) housing prices for the next eight years! :) | |
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When do most $300K-$400K homes sell in Harrisonburg, Rockingham County? |
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 It seems (see above) that there are many more $300K-$400K home buyers in the market during the summer months than any other time of year. And before you say this is just the normal seasonal trend for home sales, compare it to the overall market (below). Perhaps the high buyer count in the summer for $300K-$400K range is related to incoming JMU professors?  | |
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Bigger Picture: Inventory Levels Quite Low! |
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 Not only are inventory levels down 19% in the past year, they are also quite low as compared to the past few years. | |
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Harrisonburg, Rockingham County Home Sales Surge Forward in October 2012 |
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I just published my monthly Harrisonburg & Rockingham County Real Estate Market Report. Download the full PDF here or read on for some highlights.  Our local housing market continues to slowly and steadily recover:
October 2012 was a fantastic month of home sales, with 74 home sales, compared to only 62 last October. This October, in fact, was the best October in at least 3 years. The remainder of the year (Nov, Dec) should continue to show strong sales figures based on many buyers contracting on homes in October. (download the full report for details)
Inventory levels continue to decline, helping to bring our local housing market close to being in balance. An over-supply of sellers and under-supply of buyers in recent years has caused many of the less-than-exciting market conditions of late. It is a positive sign to see inventory declining steadily over the past 12 and 24 months.
There's lots more inside! Click above (or here) to download my full local housing market report for November 2012. And, if you have questions about the local housing market, or if I can be of assistance to you with real estate that you own, or that you'd like to own, please be in touch. You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com.
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Median Price Per Acre in Rockingham County |
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 Land values have declined over the past few years, and the median price per acre varies quite a bit based on the size of the parcel of land. The median price per acre of all tracts of land with 5+ acres that have sold in Rockingham County thus far in 2012 is $7,000. When we look only at those with 10+ acres, that drops to a median of $4,704 per acre. Read on for further analysis of each segment of the land market in Rockingham County     | |
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Home sales up 6% year-over-year in Virginia |
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 Other good news includes....
View the entire report as a PDF here. | |
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Explore 22 Townhouse Communities in Harrisonburg, VA |
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Learn all about Harrisonburg's 22 townhouse communities on HarrisonburgTownhouses.com, now updated with 2012-Q3 sales trend data.  | |
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VAR: CNN doesn't understand the concept of a bubble |
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From the fine folks at the Virginia Association of Realtors....  "Home prices may not return to peak until 2023," is the CNN Money headline. The story is that housing prices may take that long to hit their 2007 levels — that is, the levels they were at the peak of the housing bubble. This is news? During the bubble, property values prices rose way above rational levels, and thus way above where they should have been. ("Should have," being defined as where they would go if they stuck to normal levels of inflation.) It's as if CNN was expecting prices to look like this:  When in reality they're going to look like this:  You can't expect prices to hit 2007 levels any time soon. Home prices have, on average, tracked inflation. After the bubble burst, prices dropped below where they should have been (think of it as the pendulum swinging far in the other direction), and are making their way back to their "natural" state. At which point they'll proceed to track inflation, barring another bubble or bust. So if, like CNN, you were expecting the market to quickly make its way back to 2007 levels, think again. And give it time. | |
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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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