Analysis
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More and more homeowners are remodeling |
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 Hmmm.....are they remodeling instead of selling their home to buy a new home? Or are they remodeling to get ready to sell? Current remodeling levels are higher than any time in the past six years! | |
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My tenants left, should I sell my townhouse? |
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 In many cases, your better option is to keep renting your townhouse --- and doing whatever it takes to find a tenant --- rather than trying to cut your losses via a sale. In the example above, you could go for years with reduced ($750/m) rent with annual losses of $1800 before you came anywhere close to realizing the full amount of loss realized by a quick sale on day 1. | |
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Home sales, contracts increase in October 2011, despite continued slow decline of home values |
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 Click here to download my full market report (27 pages, 7 MB, PDF) or read on for highlights....  October was a relatively positive month for the local housing market:
 A strong sign of strength to come in the local housing market, October 2011 was a great month of buying activity, with 84 buyers committing to buy homes in Harrisonburg or Rockingham County. This marks a 65% increase in buyer activity as compared to October 2010!  Trends are very slow to reveal themselves in annualized sales figures (shown above) because they are an indication of 12-month rolling averages. That said, it seems that it may be a safe bet that home sales and home prices are on the mend when examining the graph above, which has now been showing increases in these long-term indicators for four months.  Some price ranges are recovering more quickly than others. The graph above shows that the price ranges under $300K have been starting to see increases in sales over the past several months. This should eventually roll over into the higher price ranges as buyers move up the price spectrum.  For an even more in-depth look at the Harrisonburg and Rockingham County real estate market, click the image above to download my full market report (27 pages, 7MB, PDF). If you have questions about the report, 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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LOTS of buyers signed contracts in October 2011 |
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 Despite starting to see some colder weather (and the first snowfall of the year) October 2011 was a strong month of contracts for Harrisonburg and Rockingham County. These 84 contracts was a significant increase over last October's 51 contracts -- and at 84 was right in line with May (88), June (84) and July (86). Wow! | |
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Recovery underway in overall Virginia real estate market? |
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The Virginia Association of Realtors released their 3rd Quarter real estate market report, and one trend that stands out to me is a potential indicator that the overall Virginia housing market is starting to recover all on its own, aside from any help from a tax credit.  For a big picture look at the entire state of Virginia, definitely download their full report here.  | |
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Will homes prices decline another 10% locally? |
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Someone mentioned last week that they expect local home prices to drop another 10% or so before they stabilize. I don't think that I agree, but let's try to put it in context:  The graph above (click here for a larger version) shows the median prices for single family homes in Harrisonburg and Rockingham County since 2000. You'll note that the median sales price has fallen 17.5% from $226,800 in 2006 to the current value (in 2011) of $187,000. Will home values really drop by another 10%, down to $168,300? I don't expect that they will -- I think that as the pace of home sales stabilizes (which started in 2010) that we will see prices gradually start to stabilize. Certainly, though, if prices were to drop another 10% locally (or even 5%) that would be instructive for sellers who are holding out with aggressive list prices. | |
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Zillow is slightly more optimistic than our tax assessor |
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Zillow.com has been around for a few years, but only recently has offered thorough information on the Harrisonburg and Rockingham County area. On Zillow you can look up the estimated value of (just about) any house in this area. But the question, of course, is how valid are these estimates by Zillow? I performed a brief analysis for a client on the Greendale subdivison. Thus, admittedly, this is quite a small sample size. Perhaps I'll expand it further soon to see how Zillow performs in other areas when estimating the value of properties in the City of Harrisonburg.  The above analysis considers arms length sales from the past year in Greendale subdivision located in Harrisonburg, Virginia. This does not include REO sales (bank owned) or short sales. A few observations....
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Home sales increase 44% in September |
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 Click here to download my full, 27-page report on the Harrisonburg and Rockingham County real estate market, or read on for highlights....  The housing market in Harrisonburg and Rockingham County continues to show signs of stabilization and recovery:
 While contracts were down slightly in September (67 compared to 74 last September), contracts year-to-date are up 15%. Yes, that's right, 15% more buyers have committed to buy properties this year as compared to last year -- indicating that we should see continued strength in closed home sales over the next several months.  Helping to balance the housing market, inventory levels have declined 14% over the past year.  After three years of declining sales pace and sales prices, both metrics are now increasing when examined from an annualized basis.  If you have questions about the report, 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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September home sales continue recent positive trends |
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Thus far, September is looking good, with 38% more home sales than last year!  Re-read last month's report if you missed it, and know that we have more positive data in September to continue what appears to be a stabilization of the market. | |
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Is it wise to put my house on the market in Sept? Oct? |
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Everyone knows, the summer is the busiest sales season -- but how does the rest of the year compare? And is it reasonable to list a home for sale now (in the Fall) or should homeowners wait for Spring?  The graph above shows the percentage of homes that go under contract each month through the year. Thus, if 1000 homes were available for sale in January, we could expect that 6.9% of them (69) might go under contract that month. The red line running through the graph shows the average -- on average, 7.7% of available homes go under contract each month in this area. Thus, the "better than average" months to have your home on the market are March through July. But....does that mean that homeowners who didn't sell in those months should give up until the following March? I say no..... First, on average, 423 homes will go under contract in those better-than-average months of March through July. But an additional 405 homes will go under contract in the remaining worse-than-average months of the year of August through February. Second, other than November (6.2%) and December (5.5%) all of the other months show roughly 7% of homes going under contract --- a mere 0.7% lower than the average of 7.7%. So, homeowners, you need not be depressed from now until next March when the buyers come back out of hibernation. There will continue to be buyers in the market even if we are currently in the not-quite-so-active months of the market. | |
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With contracts still on the rise, the local housing market is showing continued signs of stabilization |
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August was another strong month of contracts....  Contracts year-to-date are also still quite strong!  Stay tuned for my full market report next week --- could this finally be the year when home sales stop declining in Harrisonburg and Rockingham County? | |
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Unwillingly keeping your townhouse might be your best (unintentional) financial move yet! |
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As I pointed out a few days ago, if you bought a townhouse a few years ago, you might be in a position where you can't sell it -- and thus end up being an accidental landlord. But there may be some unintended very positive consequences for keeping that townhouse. Let's examine what might happen if you kept your townhouse for the remainder of the term of your mortgage.  In the illustration above, let's imagine you bought your townhouse for $160K in January 2005 and financed 100% of the purchase price. You stay in the townhouse for seven years, and then move out of the area for a new job. Faced with a tough townhouse sales market, you feel forced to keep the townhouse. What happens next.....
 As you can see, after investing $0.00 on Day 1, you end up having a cumulative $230,352 benefit after 30 years. Wow! So, can this make you a bit more optimistic about being (or feeling) forced to keep your townhouse? | |
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July 2011 Virginia Housing Market Report Released, Harrisonburg Looks Good |
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 The graph above starts Harrisonburg (and Rockingham County) and Virginia on the same footing based on the number of sales in July 2010. Then, comparing the subsequent 12 months, we see that the Harrisonburg and Rockingham County housing market is (using this analysis tool) performing quite well compared to the entire state of Virginia. Our local housing market has especially performed well over the past four months, as shown above in yellow, which echos what we have seen in recently analysis of our local sales data. Click the image below to download a PDF of the entire July 2011 Virginia Housing Market Report.  | |
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Did the federal home buyer tax credit impact the pace of home sales in Harrisonburg and Rockingham County? |
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 The federal home buyer tax credit did not seem to have a lasting, positive impact on the local housing market. While the federal home buyer tax credit (timeframe shown in green above) did cause the pace of home sales to increase, it was not lasting -- sales declined again after the tax credit expired. We're now roughly a year out from the expiration of the tax credit, so we are now getting close to being able to analyze the local housing market without a backwards reference to the (long) period of time with government intervention as an influencing external variable. It's great, thus, that the real estate market seems to finally be improving as of mid-August. | |
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Seller concessions increase as market activity decreases |
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Thank you, Michael, for suggesting that I analyze this....  As seen above, more sellers are giving concessions these days to close the deal. These concessions are most often a credit towards closing costs -- and thus far in 2011, 41.2% of sellers have provided such concessions at closing in Harrisonburg and Rockingham County home sales. This is a 30% increase over just three years ago.  Not only are more sellers making concessions, the average concessions are also on the rise --- from $1,213 three years ago to $1,858 thus far in 2011. This shows 53% increase, though the current average of $1,858 is less than 1% of the current average sales price of $201,364. | |
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Halfway through August, and the real estate market still seems to be performing well in Harrisonburg and Rockingham County |
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 For the past five years, I've had to answer the question of "so, how's the real estate market" with responses such as "well, not so great" or "well, it could be worse." Now, the answer is a bit different, more along the lines of.... While we're not out of the wood yet, there are many positive indicators in our local housing market that seem to show a modest and slow start to market recovery. As shown above, above:
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Should I be worried if I am paying more than the assessed value for a house? |
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 If you're buying a single family home in Rockingham County, chances are, you're paying more than assessed value for the house. Should you be concerned? No --- it just means that the assessed values aren't currently as close to market value as they are intended to be. To check in on the relationship between purchase prices and assessed values, I pulled all single family homes that sold in the past month in Rockingham County that were not bank owned sales. I then compared each sales price to the assessed value and found that most buyers paid at least 5% more than the assessed value (shown in red above). If almost all buyers were paying significantly less than assessed value, I'd be concerned about you paying more than assessed value --- but assessed values in Rockingham County are still quite low right now, leading to the data above. For your reference, in these 38 transactions, buyers paid (on average) 15% more than the assessed value of the home. | |
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What Monday's (rather positive) local real estate market report does and does not mean for you |
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There are lots of positive trends in the local housing market right now!
Is the future now rosy and bright? Will home value start going up, up, up again? While there are some wonderful, positive indicators in Monday's housing market report (PDF) here are some other not-as-exciting current market realities:
I would suggest cautious optimism. While we're not out of the woods yet, there are lots of indicators that would suggest that we're nearing a turning point in the market. | |
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Just wait until all of these contracts turn into home sales! |
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 It is exciting to see how quickly contracts are coming together on homes in Harrisonburg and Rockingham County compared to the past several years. At the rate that properties are currently going under contract, 2011 should finish out a (relatively) strong year of home sales -- very likely exceeding 2010 sales. Increased contracts will eventually lead to increased sales will eventually lead to stabilized home values will eventually lead to a more balanced real estate market. Stay tuned! | |
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Home Sales Increase, Prices Increase, Contracts Increase! |
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Finally, some signs of hope for the local housing market! I just completed my monthly analysis of the Harrisonburg and Rockingham County real estate market, and there are plenty of reasons to be excited. Download the full market report (PDF, 7MB) or read on for some highlights.  As seen above, July 2011 home sales shot past July 2010 by 48% --- which helped the year-to-date sales pace to come within 6% of last year's pace. Furthermore, we did not see a decline in median sales prices when comparing this July and last July....and....the average sales price INCREASED by 5% comparing July to July.  But it gets better --- the next few months should be rather exciting as well, since July 2011 buyer activity (shown above) exceeded both July 2009 and July 2010 contract levels.  Finally, some good news for local home builders, new home sales may finally be stabilizing, with both the pace and price of new homes looking to stay relatively consistent between 2010 and 2011 (as shown above).  One of the reasons (among many) that we are continuing to see improvement in the local housing market is because mortgage interest rates continue to stay below 5%. As shown above, they have started to increase a bit, but are still at an average of 4.6%.  Click on the image above to download my full Harrisonburg & Rockingham County Real Estate Market Report for further analysis of our local housing market. As always, I have included both the good news and the bad news -- my hope is that my analysis will empower you to make the best real estate decisions possible. If you have questions about the report, 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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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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