Analysis
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Housing Contracts...but is that a verb or a noun? |
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![]() Today's Daily News Record is correct -- in more ways that one. The housing market has indeed contracted (verb) as home sales and prices have declined in recent months. However, further analysis of the current market reveals that Housing CONTRACTS (noun) are the more exciting part of this storyline. It was Carey Keyes that made the exciting discovery today....last June 54 contracts were written during the entire month. But in the first 14 days of this June, there have already been 51 contracts! If we project out until the end of June, here's how last June and this June would compare.... ![]() OK, OK, I realize this is extrapolating from June 1 - 14 data....so for those of you who only want to deal with actual data (not projections), let's look at the total number of contracts written thus far this year (Jan 1 - June 14) as compared to last year during the same time period)..... ![]() So, it turns out that there might still be hope for 2011 to be the year that the housing market stabilized in Harrisonburg and Rockingham County. | |
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Location make a big difference in home value |
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Thanks to Tom Barnum for pointing out this interesting contrast in values.... ![]() The two houses above seem relatively similar, right?
The value difference is at least partially based on location. House #1 is located on Monument Avenue adjacent to Purcell Park in Harrisonburg. House #2 is located on Main Street in Timberville. | |
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Monthly home sales: sliced, stacked, side by side |
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![]() For each of the past five years, there have been fewer and fewer home sales in Harrisonburg and Rockingham County. First 1669 (2005), then 1438, then 1248, then 936, then 816, then 758 (2010). After this 55% decline in home sales, I know that we haven't seen a bottom to the local real estate market until we see the number of home buyers start to increase again. I am certainly rooting for 2011 to be the year that we see a reversal -- when we'll finally see an increase in home sales. The graph above, however, shows that we'll need to see a strong second half of 2011 in order for my prediction to come true. Of interest, you might note that:
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Home sales pace, sales price decline in Harrisonburg and Rockingham County |
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I just completed my monthly analysis of the Harrisonburg and Rockingham County real estate market. Click here for a PDF of the 24-page report or read on for some highlights. While there are several indicators that Harrisonburg and Rockingham County might be starting to see a recovery in the housing market, there are still plenty of trends that are not as hopeful. ![]() Above you will note that sales are still lower this year than in 2010, with a 6% decline in May 2011 sales (compared to May 2010) and a 6% decline in year-to-date home sales. Median prices also continue to decline, with a rather steep 10% decline in median sales price over the past year (Jan-May 2010 vs. Jan-May 2011). ![]() Despite a downward trend in the pace of home sales and in median prices, we are still on a several-month run of lots of buyers committing to buy homes in Harrisonburg and Rockingham County. This should, in theory, help to stabilize the pace of home sales over the next few months. May 2011 contracts exceeded both May 2010 and May 2009! ![]() The graph above (inventory) is one trendline that we're happy to see decline. There are currently 13% fewer homes on the market as compared to a year ago! This helps to balance the market, though there are still many more sellers in the market than buyers. ![]() Over the past five years, the pace of home sales has declined almost 50% in Harrisonburg and Rockingham County. Despite this tremendous decline in the number of home buyers in our market, the median price did not start declining until 2008, and even then, only had a slight decline (8%) through the end of 2010. As 2011 finishes out, we'll get a better idea of how these two trends (pace, price) will perform. For more reading, click here to download the full Harrisonburg & Rockingham County Real Estate Market Report as a PDF. As always, if you have questions about this report, or if I can be of assistance 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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Will Harrisonburg See a Double Dip In Home Values? |
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Well, it's hard to say, because we're still in the midst of the first dip.... ![]() The blue line above shows the Case-Shiller U.S. National Index Levels, which is a measure of home values across the United States. As you can see, home values declined between 2006 and 2009, but then started to increase again in 2009 and 2010 -- due largely to the federal home buyer tax credit. Alas, home values (nationally) have started to decline again, which many are calling a "double dip" in home values. For better or for worse, Harrisonburg and Rockingham County do not need to worry about a double dip in the near future --- because we're still in the midst of the first dip. As you can see above in the red line, local home values have only gradually decreased between 2008 and today. So, while median home values are still declining in Harrisonburg and Rockingham County, there is some good news on other fronts, for example despite April being a seven month low in contracts across the country, it was a twelve month high for Harrisonburg and Rockingham County! Stay tuned for more market analysis as the May data is compiled and analyzed over the next week. | |
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An analysis of current residential listing inventory |
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Home values usually go up over the long term |
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The fine folks over at Visualizing Economics have assembled another visual look at the housing market over the past two decades. ![]() As can be seen above, nearly every state in the country witnessed an increase in home values over a twenty year horizon. Virginia fared particularly well, with a 30% - 40% increase over the twenty years. ![]() The second map (above) shows the changes in home values over the past 11 years. Quite a few states here saw a decline (purple) in home values, but Virginia still showed a 30% - 40% increase! | |
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Sales of building lots in Harrisonburg, Rockingham County appear to have stabilized |
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![]() Click on the image for a larger version The median sales price of building lots (less than an acre) skyrocketed in 2005 and 2006 up to a peak of $99,900. But alas, these elevated values did not stick -- they fell just as quickly back down to $58,300 just two years later in 2008. After several years now in the mid $50K's, it seems (relatively) safe to say that the value of building lots has stabilized at a median of around $55,000. Lot sales also seem to have stabilized because the decline in the annual number of lot sales has ceased. There were more lot sales in 2010 than in 2009, and we seem to be poised to have another increase in 2011. The good news (perhaps?) is that this is still an overall increase above where values were before the rapid 2005/2006 escalation. In 2004, the median sales price of such building lots was $42,000, which makes today's median value of $55,000 a reasonable place to be given long term gradual increases in values. | |
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Where (in Rockingham County) are home values increasing? |
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Each area of Rockingham County has performed a bit differently over the past year. Some areas have seen an increase in median sales price, and some have seen a decrease. ![]() As you can see above (and below) South-East and North-West Rockingham County performed the best when comparing the median sales price from the last 12 months with the prior 12 months. ![]() | |
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Strong Sales, Stronger Contracts, Fewer Homes For Sale |
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Taking a look at the first four months of 2011, there are some signs of good news in our local market.....and certainly still some indicators that are not quite as positive. Click here to download the full Harrisonburg & Rockingham County Real Estate Market Report as a PDF, or read on for some highlights.... ![]() As seen above, year-to-date sales are only down 6% -- though median prices are down 12% as compared to a year ago. ![]() Home sales have been going strong through March and April (the red line above), after a slow start in January and February. Hopefully we will continue to see a sales trajectory that will exceed May 2010, and perhaps come close to June 2010. ![]() Buyers were QUITE active in April 2011 --- the number of contracts written (104) was the highest month of contracts in the past three years with the exception of last April. This bodes well for strong sales numbers in May and June! ![]() Even better news is that while buyer activity is increasing, seller activity isn't getting too out of hand. We have significantly lower numbers of listings this spring as compared to the past two springs. Our real estate market still has a long way to go before it is stable -- but April 2011 market activity seems to indicate that we are headed in that direction. For more reading, Click here to download the full Harrisonburg & Rockingham County Real Estate Market Report as a PDF. As always, if you have questions about this report, or if I can be of assistance 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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How much do banks typically negotiate in selling a bank owned property? |
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Buyers can often find great opportunities in bank owned properties, but they often wonder how much they should expect to be able to negotiate off of the list price of a bank owned property. Let's take a look.... For all residential sales in Harrisonburg and Rockingham County in the past year, we find:
I suppose the important thing to remember is that the list-to-sell ratio of any property is largely dependent on how realistic the asking price is. Both a homeowner and a bank can price a home too high when putting it on the market. Perhaps banks do that less often, and thus achieve a (slightly) higher list-to-sell ratio despite still offering great deals on properties? Additional Relevant Information:
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Buying options under $200K keep increasing, but otherwise, your options are vanishing |
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I often hear that there are too many homes for sale (sellers tell me this) and that there aren't nearly enough homes on the market (buyers tell me this). Let's examine how inventory levels have changed over the past several years..... ![]() It may be a result of an overall decline in median sales prices (home values), but whatever the reason, the number of options under $200K keeps increasing. Three years ago, you would only have had 263 homes to choose from in Harrisonburg and Rockingham County -- but that has now ballooned to 447 listings. ![]() Listing inventory between $200K and $300K has gradually declined over the past several years, though it did surge upwards in the spring and summer of 2010. We may again see a surge as homeowners prepare to list their homes for the summer 2011 buying season. ![]() The decline in $300K to $400K listings has been a bit faster than in the $200K to $300K range (32% versus 27%). ![]() Housing options over $400K have drastically declined over the past several years, with an overall 37% decline. This is likely an appropriate decline relative to the overall decline in the number of buyers in the market. Whatever the price range, we will likely start to see a surge in homes listed for sale as we continue through spring and summer of 2011. Hopefully we will not reach past seasonal peaks of 1,000+ homes as we did in mid-2010. | |
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Buyers are writing offers in droves |
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April 2011 was a busy month of contracts, with 105 contracts inked on properties in Harrisonburg and Rockingham County. Having surpassed 100 contracts, we'll call that droves of buyers.... ![]() But what, you might ask, did these buyers actually contract to buy? Let's expand our search a bit and look at the price range of homes that have gone under contract in the past 60 days.... ![]() As you can see, houses priced under $200K are still HOT! To put this in perspective.... Active listings under $200K: 435 26% of active inventory may go under contract in the next 60 days Active listings between $200K and $300K: 224 17% of active inventory may go under contract in the next 60 days Active listings between $300K and $400K: 97 19% of active inventory may go under contract in the next 60 days Active listings over $400K: 83 12% of active inventory may go under contract in the next 60 days When compared to the active listing inventory, the under $200K and $300K to $400K price ranges are performing the best at this time. | |
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The Central Valley fares well in home sales, and better than most in home prices |
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The Virginia Association of Realtors just published their first quarter home sales report (available here as a 6.65MB PDF). Let's take a look at how Harrisonburg and Rockingham County (encompassed in the "Central Valley" region) are doing..... ![]() As you can see above, the Central Valley had a 6.5% increase in home sales in 2011-Q1 as compared to 2010-Q1. While we haven't yet seen such an increase in Harrisonburg and Rockingham County, it is a positive sign that our region is performing well overall. ![]() Above you will note that the median sales price declined in every region of the state during 2011-Q1, as compared to 2010-Q1. After Northern Virginia's negligible decrease (-0.3%) the best performing region was the Central Valley, which includes Harrisonburg and Rockingham County, with only a 4.9% decline. See a few more explanations of VAR's First Quarter Home Sales Report here, or download the full PDF of the report here. | |
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How did Virginia fare in the housing bubble? |
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These helpful maps were created by the folks over at Design & Geography.... Virginia fared better than most states pre-bubble with a 80% to 120% increase in housing prices between 2000 and 2006. ![]() Virginia homes lost value between 2006 and 2010 (0% - 20%) but not as much value as some states such as California, Florida, Nevada and Arizona. ![]() Virginia is one among a handful of states that experienced a net gain in housing prices between 2000 and 2010. ![]() Virginia's housing market continues to fare well, and hopefully we will see a further increase in the market both in Virginia as well as Harrisonburg and Rockingham County. | |
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Foreclosure Rates in Harrisonburg, Rockingham County |
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Inspired by a great article in yesterday's Daily News Record about foreclosure rates in the Harrisonburg and Rockingham County area, here is a comparison of foreclosure rates in Harrisonburg and Rockingham County as compared to Virginia. ![]() A few other notable observations from the DNR article:
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Buyers Are Moving Fast! Contracts Up 29% In April 2011! |
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![]() In the first 20 days April 2010..............58 contracts were written... In the first 20 days of April 2011..............75 contracts were written! Beyond this 29% increase in the pace of sales this April, it is interesting to note how many buyers are moving quickly once they see a house come on the market that works well for them, and is priced right. ![]() Note the large percentage of homes above that went under contract within the first two months that they were on the market. | |
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Home Value Trends in Harrisonburg, Rockingham County |
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We have seen significant declines in home values in Harrisonburg and Rockingham County over the past several years --- though nowhere near the level of declines seen in many metro areas. One common question, however, is what does the future look like. ![]() Between 2003 and 2006, we might have thought that home values would increase forever (shown above). This was obviously unrealistic and unsustainable. ![]() I also don't think we'll see median prices fall in a straight line forever in the same trajectory as we've seen for the past several years. ![]() Projecting based only on 2000 to 2001 data might get closer to reality, but we'd have to start seeing a rather dramatic uptick in values here in the next year or so to get back on track. ![]() The graph above is perhaps my best guess for the future. It presupposes that 2000 through 2003 showed normal increases in home values, and that things then escalated out of control from 2003 through 2006. The market then stayed relatively level between 2006 and 2008 before finally starting to correct between 2008 and 2011. The question remains, however -- will we have to dip below the trend line before coming back up to meet it? | |
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How do you think our local real estate market is doing? |
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One of the questions we asked hundreds of visitors to our booth at the 2011 Shenandoah Valley Builders Association Home & Garden Show was..... "How do you think our local real estate market is doing?" Here are the responses.... ![]() So, what do you think? Do you agree with those in attendance at the Home & Garden Show? | |
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Home Sales Strong Despite (or because of) Price Declines |
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March 2011 home sales show plenty of positive indicators, though the local market is still a ways off from a full recovery. ![]() After mediocre performance in January and February, the Harrisonburg and Rockingham County housing market finally witnessed some growth in March 2011. March's 61 home sales exceeded March 2010 (49 sales) and March 2009 (57 sales), and contributed to an overall decline in home sales of only 6% between 2010 (YTD) and 2011 (YTD). ![]() Not only did buyers close on properties in March, they also contracted on properties --- though probably not the same buyers. March 2011 showed another strong month of contracts (75), exceeding March 2009 figures (68). Last March's contract figures (95) were significantly affected by the home buyer tax credit. ![]() Despite increases in inventory over the past two months, it appears that 2010's peak of over 1,000 properties for sale will not be met this year. We have seen an overall decline of 13.5% over the past year in the number of residential properties for sale, which can help restore balance to the market. ![]() Despite the strong indicators noted above, we do see that the median sales price of single family homes has started to decline again more sharply after a relatively steady year last year. We may not be totally out of the woods yet. ![]() There's plenty more news in my monthly housing market report -- click on the image above (or here) to download and view the full PDF. As always, if you have questions about this report, or if I can be of assistance 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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