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March 2012 shows a SURGE of buyers in the market! |
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![]() One factor that is helping our housing market to show continued signs of improvements (in the pace of sales) is that we continue to see strong levels of buyer activity in the form of contracts. Now, bear in mind, not all contracts result in closings -- but without a contract, closings rarely occur. ;) See above -- last month (March 2012) there were 87 contracts --- that is more than some of the summer months last year. We are likely due for a strong remainder of our spring housing market as well as a strong summer market based on the amount of buyers in the market these days. Of note -- even with Spring Break, and Easter, there have already been 28 contracts in the first 9 days of April. | |
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Harrisonburg housing market shows continued signs of improvement in March 2012 |
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Harrisonburg and Rockingham County home sales were at a four year high during March 2012, and for the entire first quarter of 2012. Click here to jump to the PDF of the full market report, or keep reading. ![]() March continued the trend of positive indicators in our local housing market:
![]() March 2012 was a fantastic month for home sales in Harrisonburg and Rockingham County, with 66 home sales closing -- the highest we have seen in the past four years. This sets the year up with a strong base as we move into the remainder of the spring and then summer market. ![]() The pace of home sales certainly varies based on price range. The graph above shows the average number of home sales per month (given a 12-month average) as we have passed through the past two years. You'll note that the sale of homes for less than $200,000 increased through June 2010 and then declined for the next 12 months. This phenomenon is almost positively a result of the federal home buyer tax credit that encouraged these sales during 2009 and 2010. Of note, however, this segment of the market (under $200,000) has shown steady increases since June 2011, as has the $200,000 to $300,000 market. ![]() Home buyers continue to find amazingly low interest rates on 30-year fixed rate mortgages, with the current average rate of 3.99% continuing the five-month streak of staying below 4.0%. ![]() There is plenty more to read, analyze and understand. Click here (or on the market report cover above) to download my full monthly market report. 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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Virginia home sales surge ahead (+9%) in February 2012 |
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In another sign of potential stabilization of the housing market in Virginia, home sales rose 8.6% in February 2012 as compared to one year prior. This strong increase is after a 2.7% year-over-year increase in January 2012. Virginia's unemployment rate of 5.8% in January is the lowest level seen since December 2008 and provides a strong climate for growth in the housing market. Download the full February 2012 Virginia Home Sales Report below which also highlights:
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Is an improving housing market good news for everyone? |
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![]() photo source: erix The local housing market is improving (sales up, prices up) but as someone pointed out to me earlier this week, that's not necessarily good news for everyone. But I do think it's good news for just about everyone. Certainly, it's good news for sellers -- they're now more likely to be able to sell, and don't have to worry (as much) about their home losing even more value before they sell. Certainly, it's good news for homeowners -- the value of their home now seems to be stabilizing. It's mixed news for near-term buyers -- it might mean that there are fewer deals to be had in the coming months, but since they're buying soon they can console themselves with the realization that their newly purchased property is not likely to continue to decline in value after their purchase. It is bad news for far-future buyers -- if you're not buying for a few years, it is understandable (sort of) that you'd like the market to get worse, so that you would have better buying opportunities. So, what about you? Are you glad the housing market is improving? | |
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Home sales and median prices on the rise in Harrisonburg, Rockingham County |
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Good news! With two months of 2012 under our belts, our local housing market is showing signs of continued stability and growth. Click here to jump to the PDF of the full market report, or keep reading. ![]() As shown above, the pace of YTD home sales has increased 8% from 78 home sales (Jan-Feb 2011) to 84 home sales (Jan-Feb 2012). Furthermore, the YTD median sales price has increased 3%, and the average sales price has increased by 4%. After quite a few years of seeing declines in median and average sales prices, this is a welcome change!. The time it takes to sell a home, however, is still on the rise --- showing a 27% YTD increase. ![]() February 2012 was another strong month of buyer activity, with 80 buyers signing contracts to buy homes. This marks a significant 16% increase over last February -- and even comes close to the summer months of 2011. ![]() Remarkably, even now through the beginning of March, there are fewer and fewer homes for buyers to select from in our local market. Inventory levels have dropped 18% over the past year --- from 807 homes down to 665 homes. Typically we start to see an increase at this time of year, but I welcome these lower inventory levels, as it can help our market to continue to stabilize. ![]() After many years of a declining pace of home sales, we have now seen a reversal in this trend over the past eight months as the annualized pace of sales has increased from 706 sales/year to 800 sales/year. This is welcome news, and likely contributes to the relative stability in annualized median sales prices that we have seen over the past four months. ![]() There is plenty more to read, analyze and understand. Click here (or on the market report cover above) to download my full monthly market report. 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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Punxsutawney Phil must have meant winter-like levels of housing inventory, not winter-like weather |
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It sure doesn't seem that we're having six more weeks of winter weather. But we certainly ARE having (at least) six more weeks of winter-like levels of housing inventory. In fact, current inventory levels (664 homes) are lower than anytime in at least the past four years. Even in the coldest of months over the past four years, we have not seen inventory levels so low. Here's some perspective.... March 2008 = 814 homes for sale March 2009 = 838 homes for sale March 2010 = 863 homes for sale March 2011 = 807 homes for sale TODAY = 664 homes for sale OK, seriously, why the winter-like levels of housing inventory? Inventory levels fell below 700 for the first time in a long while back in December, and they are not yet showing any signs of recovering. | |
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The past five years of foreclosures |
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![]() Bloomberg has an interactive tool that explores the number of foreclosure filings in the United States over the past five years. | |
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2011 Virginia Housing Report |
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![]() Last week, the Virginia Association of Realtors® released its 2011 Pieces of Home Housing Report including housing market data, trends, and comparisons. BIG PICTURE: Virginia homes sales in 2011 exceeded home sales levels in 2010 despite the lack of a stimulus. HOORAY FOR OUR LOCAL AREA: The Central Valley regions experienced the greatest increase in sales and the Northern Virginia region experienced the only decline. View the whole report by clicking here. | |
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Contracts do not always result in closings |
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![]() During 2010, buyers wrote 820 contracts --- and during the same year, only 758 closings took place. Why the difference? Technically, some of the 2010 closings are based on 2009 contracts....and some of the 2010 contracts will be 2011 closings. I don't suspect, however, that this timing issue significantly effected the relationship between the number of contracts and closings during 2010. Looking back, there were 47 closings during 2010 that were under contract at least twice. That closes the gap most of the way: 758 closings + 47 contracts that fell through (but then were contracted on again) = 805 closings. That leaves just 15 properties (with this rough math) that were under contract but never sold. Interestingly, 2011 was even more disproportionate.... Again, let's pretend ignore the overlap between years -- yes, I know that late 2011 contracts will close in 2012, but in theory almost all of those will be offset by late 2010 contracts that closed in 2011. So, the math gets interesting here..... There were 64 closings during 2011 that were under contract at least twice. 791 closings + 64 contracts that fell through (but then were contracted on again) = 855 closings. That leaves 100 properties (as compared to 15 in 2010) that were under contract but never sold. Again, it's rough math, here is the probability that a contract on your house would result in a closing during the past two years:
Don't get me wrong --- I like contracts, and houses going under contract -- however.....
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Local housing market stable in January 2012 |
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Our local housing market remained relatively stable in January 2012, showing some indicators that we will continue the new trend we saw in 2011. To remind you..... In 2011, after a five year slide (and a 55% drop) in the pace of home sales, our local real estate market showed a 4% improvement in the pace of home sales last year, even though the median sales price declined another 3%. Jump to the PDF of my monthly market report, or keep reading for an overview. ![]() Important trends to note:
Inventory levels continue to decline (as shown above) with a 14% decline over the past year, and an overall 17% over the past two years. Perhaps one month of data is too small of a data set to draw some conclusions --- otherwise we'd think our market has REALLY recovered, as the median sales price increased 11% when comparing 2011 to January 2012. For a more detailed look at the Harrisonburg and Rockingham County real estate market, download my full market report as a PDF. | |
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Virginia housing market shows signs of returning stability |
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How much are buyers (and sellers) negotiating on price? |
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![]() More than they ever have! Pre-boom, buyers (and thus sellers) were negotiating an average of 2.6% on price -- that is to say that homes were selling for 97.4% of the list price. That went as low as an average of only 0.9% of negotiating room in 2004-2005, before rising quickly to current market conditions where the average negotiations are 5.3% of the list price. ![]() If we look closer at the data pre-boom (c2000), mid-boom (c2005) and post-boom (c2011) we find some interesting facts:
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Attached vs. detached homes over the past 11 years |
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![]() Detached home = single family home Attached home = duplex, townhouse, condominium So, which property type has shown a stronger performance over the past 11 years in Harrisonburg and Rockingham County?
But despite all of this, I believe the detached home market will be a stronger performer over the next five years, because:
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Was 2011 "the new normal" for the pace of home sales in Harrisonburg and Rockingham County? |
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In 2000, there were 829 home sales. That zoomed up to 1,669 in 2005. This past year (2011) there were 791 home sales. Certainly, 1,669 home sales a year is not a normal pace of home sales, but is 791 home sales per year a reasonable assumption for the pace of our local housing market going forward? To explore this issue, I have created a model showing what home sales would have been if a constant percentage of our local population bought a home each year, and I have included population increases from the past decade. ![]() Above you'll note that in 2000, a total of 0.77% of the population purchased a home (829). Then, for each following year, I have shown how many people would have bought a home if it continued to be 0.77% of the total population. Per these calculations, home sales in 2011 (though improved over 2010) are still well below where they (theoretically) should be. If 0.77% of the population bought in 2011, home sales would have been 23% higher than they were last year. ![]() Above is a second illustration, assuming that 2011 was a normal year -- and that each year we should expect 0.97% of the population to buy a home. In this scenario, home sales should have been 56% higher last year to have 0.97% of the population buy a home. Regardless of the actual numbers, my conclusion based on the data above is that 791 home sales per year (as in 2011) is not the new normal for our market. I believe the market will improve further as to the annual pace of home sales -- at least to 1,000 sales per year. | |
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The impact of distressed sales (bank owned, short sales) on the Harrisonburg, Rockingham County housing market |
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Housing markets across the country have been affected by an increase in distressed sales over the past few years -- both bank owned homes (that were foreclosed on) and short sales (where the sales price didn't pay off the mortgage). So, what was the impact in our local area? ![]() A few observations based on the data above....
Again, given the decline in foreclosures in 2011, I am hopeful that we'll see a smaller number of distressed sales in 2012, leading to greater stability in our local housing market. | |
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Sellers, sellers, where have you gone? |
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As I commented in my monthly market report earlier this week, inventory has declined significantly (15%) over the past year! ![]() Why is inventory dropping so much??? I have a theory.... First and foremost, I believe there are quite a few homeowners who are deciding to lease their properties instead of selling them, after having had little success in the sales arena. I have seen this quite frequently over the past 6 months, and it makes sense --- leasing the property can provide a stream of income with which to pay the mortgage payment. Leasing a property also gets the homeowner down the road a bit (perhaps a year or two) after which they can try to sell again in a market this has hopefully improved. Second, I believe some sellers are either pulling their property off the market, or never putting them on the market, because they don't believe they can sell their home right now for a price that would either: a) make them happy, b) payoff their mortgage, or c) allow them to move into their next home. Finally, after six years of steady increases in foreclosures in our local market, that trend finally reversed itself in 2011. There were 17% fewer foreclosures in 2011 as compared to 2010 -- which means there are fewer bank owned homes coming on the market. We'll have to wait a few months to see, but I think it's quite possible we'll continue to see much lower inventory levels than we saw last year. | |
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Land sales increase, in pace AND price! |
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![]() The housing market as a whole in Harrisonburg and Rockingham County seems to be stabilizing. As per my market report earlier this week, sales increased by 4% in 2011, even though prices declined by 3%. Land sales, however, are looking even better! There is quite a bit of information packed into the graph above, but here are the main things I think are important to note:
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2011 Summary: Stability is returning to the Harrisonburg, Rockingham County housing market |
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Friends and Colleagues --- Our local housing market has finally done it -- after a five year slide (and a 55% drop) in the pace of home sales, the tide has finally turned in 2011. Our local real estate market showed a 4% improvement in the pace of home sales last year, even though the median sales price declined another 3%. Jump to the PDF of my monthly market report, or keep reading for an overview. Speeding through the finish line.... ![]() The local housing market didn't slow down for the close of 2011 -- it poured on the gas to accelerate through the finish line with a strong month of 79 home sales in December. This was the strongest December in at least four years. October and November could have had us worried, with sales in the 50's, but apparently the market was holding back to create an exciting photo finish in December. The Great Reversal.... ![]() After five years of seeing fewer and fewer home sales in our local area (from 1669 in 2005 down to 758 in 2010) we finally experienced an increase in buyer activity during 2011 -- with 791 home sales. This marks a 4% improvement in the pace of home sales. The not-quite-as-exciting news, of course, is that the median sales price declined another 2.83% over the past year. But certainly, we needed to see this stability (and now growth) in sales pace before we could reasonably expect to see stability in sales prices. Hello Buyers, Good Bye Sellers.... ![]() For the past few years, there have been too many sellers in the market, and too few buyers. 2011, however, has told a different story -- one of returning stability. Not only did home sales increase 4% in 2011, but inventory levels declined 15%. While we still have a ways to go, both of these trends are headed in the direction of increased stability in our local real estate market. We Won't Miss You Mr. Foreclosure.... ![]() Foreclosures (and then bank owned homes) have dragged housing markets down across the country. Thankfully, not only did home sales increase this year in our local market (blue bars above), but foreclosures also declined (red bars above). This 17% decline in foreclosures during 2011 shows promise for fewer bank owned homes, and greater market stability in 2012. What else would help? Lower interest rates? Lower unemployment rates? ![]() The stage is set for further stability in our local housing market during 2012 -- mortgage interest rates are at historic lows (below 4%) and our local unemployment rate is at its lowest level in over two years. Looking Forward After a 2005 peak, and a 2010 valley, 2011 brought a long awaited step towards stability in our local housing market as sales began to increase again. The pace of home sales is likely to increase even further in 2012, and we just might start to see some stability in median prices --- if not in 2012, then I would imagine we would certainly see that in 2013. For a more detailed look at the Harrisonburg and Rockingham County real estate market, download my full market report as a PDF. 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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Predictions for 2012 in the Harrisonburg and Rockingham County Real Estate Market |
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One of the best indicators in our local housing market is the pace of single family home sales. Townhouses and duplexes are sometimes bought by investors, and thus if we include those sales, we aren't getting the best picture of the pace at which homeowners are purchasing homes. Given that single family (detached) homes are a good indicator for the market, I made a prediction in January 2011 as to what would happen in our local real estate market this past year. Let's revisit those predictions for 2011.... ![]() So, how did I do? I estimated that the sales pace of single family homes would stay within 2% of the 2010 pace of home sales. Either a 2% increase in sales, a 2% decrease in sales, or somewhere in between. Drum roll, please.....After 555 single family home sales in 2010, there were......618 single family home sales in 2011 -- an 11% increase!!!! Wow, was I wrong! ![]() Please note that the 618 sales in 2011 might actually increase a bit further -- I'll publish my full market report in another week which will include final stats. So, now for predictions for 2012. It's actually a bit more difficult this year. After an 11% increase in single family home sales during 2011 --- it's hard to be conservative in my estimates. Before seeing these figures, I would have estimated we'd see a 2% to 5% increase in single family home sales in 2012. But given that 2011 showed a whopping 11% increase in sales pace, I think I'll have to predict that we'll see a 5% to 10% increase in 2012. That would put us somewhere between 649 and 680 sales in 2012 -- which is on pace with 2008. As always, let me know if you agree or disagree. I value your input as well. | |
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Why am I cautiously optimistic about the future of our local housing market? |
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You don't need to tell me --- I know --- home prices are still on the decline. But here is the basis for my cautious optimism about our local housing market.... ![]() This illustrates the trends in general housing market indicators two years ago, as compared to the trends in general housing market indicators today. What do you think? Do I have some basis in reality for my cautious optimism? | |
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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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