Analysis
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Real Estate Tax Rates Moving Up and Down |
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![]() Rockingham County - tax rate down 8% The Rockingham County real estate tax rate is currently $0.74 per $100 of asssessed value, but the Board of Supervisors just approved a reduction in the tax rate to $0.68 per $100 of assessed value. But... that is in the context of recently updated tax assessed value for all properties in Rockingham County, most of which increased significantly because the last reassessment took place four years ago before significant shifts in market values in this area. As a result, most Rockingham County property owners will see an increase in their tax bill despite the reduction in the tax rate. City of Harrisonburg - tax rate up 3% (pending approval) The Harrisonburg City Council will soon consider increasing the tax rate from $0.90 per $100 of assessed value to $0.93 per $100 of assessed value. The City of Harrisonburg updates their assessed values every year, so while many or most property owners recently received notice of the updated assessed value of their property, those values likely did not increase as drastically as assessed values did in Rockingham County. As a result, almost all City of Harrisonburg property owners will see an increase in their tax bill because though small increases, their assessed value and tax rate are both likely to have gone up or to go up. | |
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Current Mortgage Interest Rates in the Context of the Past Decade |
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![]() Mortgage interest rates keep on rising. The graph above shows the average mortgage interest rate over the past decade. Periods of Green = 3._% (somewhere between 3% and 4%) Periods of Red = 4._% (somewhere between 4% and 5%) Periods of Blue = 2._% (somewhere between 2% and 3%) A few resulting observations... [1] We're getting ready to pop over 4.75%, it seems, which we've seen once (for a few months) in late 2018. [2] We might be headed all the way up towards 5%, which we haven't seen at all in the past ten years. [3] While we've spent most of the past decade below 4% (green+blue) we have certainly also seen long spells above 4% (red) as well. [4] We moved pretty quickly from 2._% to 3._% to 4._% and it almost seems like 5._% could be knocking on the door. As mortgage interest rates rise, monthly mortgage payments (for new buyers) rise, which certainly creates the possibility that at some point rapidly rising home prices won't be rising quite as rapidly. | |
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More Contracts Were Signed In March 2022 Than In Any Month In The Past Decade |
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![]() Wow! I knew that a lot of homes went under contract last month when I compiled my market report but I hadn't yet put it in a larger context. During March 2022, contracts were signed on a total of 186 properties in Harrisonburg and Rockingham County. Looking back an entire decade, there has never been a month when more contracts have been signed! In fact, there have only been a handful of months (five) when more than 160 contracts were signed. So, what gives? Why so much contract activity? [1] The market is strong, silly, sellers are excited to sell, buyers are excited to buy. [2] For some reason, more sellers than usual waited until March to list their homes (instead of January or February) causing an unexpected peak in March 2022. [3] Sellers are buyers are seeing interest rates rising and sellers want to go ahead and sell before rates get too high and buyers want to go ahead and buy before rates get too high. Maybe 1 and 2 and 3? ;-) Whatever the reason, there isn't any doubt that March 2022 was a record setting month for buyer and seller activity in the Harrisonburg and Rockingham County real estate market. | |
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Home Sales Slow Slightly, Prices Still Climbing Quickly! |
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![]() Happy Tuesday morning, friends! I hope you are enjoying the warmer weather this week, and perhaps some sporting events! We have a baseball player and a runner here in our house and the warmer weather this week is a welcome change for these outdoor sports. ![]() Whether you're watching baseball games, track meets or soccer games these days, I hope your kids are enjoying the sport and their teammates, and you are not freezing in the stands. :-) Before I get started on this month's market report, a few quick notes... Check Out Vito's Italian Kitchen... Each month in this space I highlight one of my favorite spots to enjoy a meal, or a cup of coffee, or maybe a few other surprises in the coming months. This month, it's Vito's Italian Kitchen... a familiar and favorite restaurant on Port Republic Road in Harrisonburg. If you find me enjoying a meal at Vito's, it will likely be their calzone... or of late, I have been partaking of their delicious Coconut Chicken & Fruit salad. If you haven't visited Vito's lately, do so, this week! And... maybe next week you can go back for free! I'm giving away a $50 gift certificate to Vito's... just for fun! Enter your name and email address here and I'll pick a winner in about a week. :-) Congrats to Michael S. who won the Magpie gift card last month! Featured Property... Are you tired of bidding on house after house and not having the seller select your offer? Maybe you should build your next house instead of buying one? ;-) The photo on the cover of this month's market report is a beautiful, flat building lot in McGaheysville, currently offered for sale... and ready for you to build your next home! Find out more here. Download All The Graphs... Finally, for those of you who like to download all the graphs and examine every data point, you can grab those here. Now, then, onto your data fix for the month... ![]() First off, yes, it's really true... after month after month of "more sales" and then "more sales" and then "more sales" -- this month there are a few indicators that are showing "fewer sales" instead. Don't panic. Read the entire market overview below for some analysis, context and commentary. In the chart above you'll note that... [1] There were 24% fewer sales this March than last March. A knee jerk reaction here might be "oh, I knew it, interest rates went up and home sales declined" but keep in mind that buyers that closed on their purchases in March likely contracted on those homes in January and February, before much of the increase in interest rates. A better indicator of whether interest rates are having an effect on buyer activity will be... buyer activity... signed contracts... and we'll get to that a bit further down in the report. The data might surprise you. ;-) [2] That 24% comparative deficit in March contributed to a first quarter of home sales in 2022 that included 6% fewer home sales than the first quarter of last year. [3] Despite a slightly (6%) slower first quarter of the year for home sales, the prices of those homes keeps on increasing. The median sales price in the first quarter of 2022 was $294,400... which is 18% higher than it was in the first quarter of last year. As I do from time to time, let's look at the trends in detached home sales (in green below) compared to attached home sales (in orange below) which includes duplexes, townhouses and condos... ![]() As shown above... [1] We've seen 1,104 detached home sales over the past year... which is 3% more than seen in the 12 months before that. [3] Comparatively, though, the number of attached home sales has increased much more over the past year. We've seen 546 attached home sales in the past 12 months, which is 15% more than in the 12 months before that! And how about prices... [2] The median sales price of a detached home in Harrisonburg and Rockingham County has increased 9% over the past year, to a nice (or not nice, if you're buying) round $300,000. [3] Prices of attached homes has increased at an even faster rate, with an 18% increase over the past year to a median sales price of $230,250! Here's one of my favorite graphs each month, showing monthly sales in our area... ![]() So, plenty going on in the graph above. January 2022 was what we might have expected -- right in the middle of the pack as compared to past months of January. February sales were surprisingly high, easily exceeding previous months of February. But March, hmmm, not as exciting as we might have hoped. Why weren't there more buyers in March? Some of them might have bought in February. But more likely... home buyers didn't buy (close on a purchase) in March because there weren't enough home sellers listing their homes for sale in January and February. Fewer homes available to purchase means... fewer homes will be purchased. All that said, we are certainly seeing a significant shift in mortgage interest rates right now, and that may also affect buyer (and seller) behavior moving forward. It will be helpful to see what happens over the next three to six months to better understand the overall trends in our local housing market... which is a statement that is probably always true. The next six months of data will be the best indicator of what is going on right now. :-) Next up, stack 'em up... ![]() Here's where we'll be able to keep good track of cumulative trends as we go through the year. The first three months of home sales this year (307) is slightly lower than those same three months last year... but higher than the two years before that. Will enough home sales pile on in April to make up that deficit? One indicator that might point to a yes or no will be contract activity in March. Keep reading... Slicing and dicing the data again, we end up reviewing our basic understanding of landforms... ![]() OK, let's see how you did at geography... before you read the captions above... the green line is or is not a plateau? And how about the orange line? Indeed, the green line is definitely not a plateau... sales prices keep on climbing, higher and higher and higher again. But the orange line... might be (?) a plateau? The number of homes selling a year in Harrisonburg and Rockingham County dipped down to around 1300/year in mid 2020 at the start of the pandemic, but then accelerated well past 1600/year by the fourth quarter of 2021. Over the past eight months, however, we have been seeing a relatively steady number of home sales per year. So, lots of home sales, but that number is no longer increasing, at least for now. So, will we see annual home sales ever (even for a month) rise to 1700 sales per year? Maybe not, given the past eight months of hanging out in the 1650 - 1690 range. And below is one more sign of a possible change in a trend in our local housing market... ![]() As can be generally observed above, the number of buyers buying has been flattening out over the past six to nine months -- and the number of sellers selling (inventory levels) have been stabilizing (at a really, really low point) during that same time period. So, is something changing in our local real estate market? Maybe? We probably shouldn't and wouldn't conclude that the balance in the market is shifting unless we see a measurable decline in buyer activity AND a corresponding increase in availability in homes offered for sale. Which brings us right back around to needing to remember that in order for a high level of buyer activity to be sustained.... we also need to see a sustained high level of seller activity. No houses to buy... no houses will be bought. But before anyone starts thinking that the balance in the market is changing, let's take a look at how negotiations are going these days... ![]() Indeed, buyers and sellers in today's market will tell you that there is very little negotiating happening on price... unless you consider going well above the list price as negotiating. I listed three homes for sale last week... we had three offers on one, three offers on the second, and seven offers on the third. All are selling for more than the list price. So, even if buyer activity in the overall market is declining slightly, that might be simply a result of fewer sellers selling... because the competition for each singular listing is still quite fierce. So, no, Buyer Bruno, we certainly don't talk about negotiating. Nice try, though. OK, this next graph is what I've alluded to a few times earlier... ![]() Yowzers! Contract activity was STRONG in March 2022! After a somewhat slow start to the year as far as buyer and sellers signing contracts to buy and sell... things took off in March! There were 187 contracts signed during March 2022, which was well above the 160 seen last March! And yes, as I alluded to a few times, this probably means we're going to see a rather strong month of closed sales in April. If that, indeed, happens, the slower month of March sales will then have quickly become a distant memory. Stay tuned. Maybe more buyers are buying (in March) because more sellers were willing to sell... ![]() After many, many months of fewer and fewer homes for sale at any given time, we're finally seeing that metric staying stable and increasing ever so slightly. Maybe this is a win for buyers... at least inventory levels didn't drop any further? Whatever we can do to encourage home buyers in this market, let's do it, because it can be a discouraging time to try to buy a home right now! Below is another picture of why it can be discouraging to try to buy right now... and I guess this one is a reverse plateau...oops, a valley!? ![]() This chart is measuring the annual trend of how long it takes for homes to go under contract once they are listed for sale. That very last data point of "5" means that over the past 12 months the median "days on market" was five days. So, half of the homes that sold went under contract in five or fewer days. So, so fast! This makes it somewhat more difficult to be a thoughtful, intentional, deliberate home buyer, because you are going to need to make a decision quickly!! And one last graph, that even shocked my Apple Pencil as I doodled on this month's graphs for you... ![]() Yes, you are seeing that correctly. You can gasp as well if you'd like. Over the past two months, the average mortgage interest rate has risen from 3.55% to 4.67%. That was fast!?! For years now, I have incorrectly predicted that mortgage interest rates would really start to increase soon. As we entered 2022 it became clear that the time had really could when we would see rates start to increase... but I certainly wasn't expecting it to happen this quickly. Will rates push past 5% as we continue through the year? Will they stabilize between 4.5% and 5%? Any buyers who is hoping to buy in 2022 is carefully watching these rates as it relates to their potential monthly housing costs. OK! That brings us to the end of this month's recap of our local housing market. As you can see, there is a lot going on... home sales are slowing a bit, prices keep climbing, contracts are stronger than ever, interest rates are soaring... so much to watch as we move into the hustle and bustle of the spring market! Finally, some action items for you... [1] Go enjoy a meal at Vito's Italian Kitchen and take a friend, family member, or neighbor with you! [2] Are you preparing to sell your home this spring? Let's set up a time for me to swing by your house to walk through together and talk about house preparations, the market, the process and timing. Email me or call/text me at 540-578-0102 to get that process started. [3] Ready to buy? It can be done! Let's chat about what you hope to buy, and I can connect you with a few of my favorite lenders if you need some recommendations. Signing off now... reach out anytime if you need anything... and if you have a family member, friend, colleague or neighbor that is looking to buy or sell soon, feel free to send them my way. I'd be happy to help. | |
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Home Sales Rise Again, Along With Prices, In February 2022 |
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![]() Happy Friday Morning, and for many of you, Happy (end of) Spring Break! I hope your week has gone well, whether you had a break or not. I was able to skip town for part of this week down to Virginia Beach where I was delighted to experience several beautiful sunrises like this one on Monday... ![]() There sure is something relaxing about being near the water... and if the water (and air) were warmer, it probably would have been quite relaxing to be in the water as well! :-) Before I dive into this month's charts and graphs, a few quick notes... Check Out Magpie Diner... Each month in this space I'll be highlighting one of my favorite spots in the 'burg, or surrounding, where I enjoy dining, having a cup of coffee, etc. This month... it's Magpie Diner... a breakfast and lunch restaurant with a diner-inspired menu. If I'm at Magpie, I'll likely be having the french toast of the week with some scrambled eggs and a side of bacon. Yum! Have you checked out Magpie? If not, I highly recommend that you do so sometime this month. To make it even more fun, I'm giving away a $50 gift card to Magpie Diner. Enter your name/email here and I'll pick a winner in about a week. :-) Featured Home... The beautiful home pictured above is a custom built, single level home with amazing views from the top of Crossroads Farm. Check out additional photos and all of the details of this home by visiting 750FrederickRoad.com. Download All The Graphs... Some of you prefer to download the full slide deck of charts and graphs. You can do so here. Now, let's move on to the market data... ![]() As shown above, things started getting busier in February... [1] There have been 199 home sales in Harrisonburg and Rockingham County thus far in 2022... which is a 5.85% increase from the same timeframe last year. [2] When looking at the past 12 months there have been 1,680 home sales in our local market, which is an even larger (10.53%) increase over the prior 12 months. [3] These increase in the quantity of home sales have been accompanied by an 11% increase in the median sales price over the past year. The median sales price of all homes sold in Harrisonburg and Rockingham County increased from $247,900 up to $274,227 in the last year alone! [4] If you thought homes couldn't sell any faster... you (and I) were wrong. The median "days on market" for Harrisonburg and Rockingham County has fallen 29% over the past year... from a median of seven days to a median of five days! But, despite these strong increases across the board... not all property types have seen the same changes over the past year... ![]() As shown above, the "attached" portion of the local market (townhomes, duplexes and condos) have seen a bigger boom over the past year than detached (single family) homes... [1] We have seen 8% more detached home sales in Harrisonburg and Rockingham County over the past year as compared to the prior year, while... [3] We have seen a much larger 17% increase in attached home sales during that same time. [2] The median sales price of detached homes has increased 9% over the past year, while... [4] The median sales price of attached homes has increased by 18% in a single year! So, it has certainly been a good time to sell (and a tough time to buy) a townhouse or duplex lately! Looking at the monthly "play by play" we can see that things started to get a bit spicy in February... ![]() As you might notice, above, the 104 home sales we saw this January fell right in the middle of the pack for what we might have expected in a January. But... February was different. We saw 95 home sales this February which was well and above any other recent month of January. Where do we go from here? We'll know within the next few weeks as we finish out March. Will we be able to surpass last March's very, very active month with 139 home sales? Will we fall somewhere between March 2020 and March 2021? Stay tuned to find out. I know we're only two months into the year, but... ![]() Yes, again, we are setting new records. In 2020, the 163 home sales see in January and February was the fastest start in many years. Then in 2021, I said the same about January and February with 188 home sales. And yet, here we are again, with 199 home sales in the first two months of the year, we seem poised to see another fast paced and highly active year in our local real estate market! Someone asked me recently if Covid had been a real drag on the local housing market. Yes, I said, for a few months... ![]() You'll notice on the graph above that Covid did seem to drag down the annual pace of home sales in early 2020... between April 2020 and September 2020. But then as we kept moving through fall 2020, and then into and through 2021, things just wouldn't let up. We saw month after month (with only a few exceptions) of stronger and stronger home sales. What caused this? At least some of it was, really, Covid. The place and space we call home became even more critical during the pandemic, and many folks found themselves living in homes that didn't work that well when all of a sudden they were working from home or had kids learning from home. So, "home" became even more important than ever -- causing plenty of homeowners to move to a new home. That, plus super low interest rates (to try to stabilize the economy), plus less discretionary spending, plus stimulus funds, all put more money in the bank accounts of would-be buyers, allowing many of them to jump on into the real estate market. Finally, an increasing number of people found themselves able to work from home... causing some folks to relocate to the Shenandoah Valley to work from a much more beautiful and relaxing place than they may have lived previously. As we continue to work our way through this pandemic that might eventually be considered an endemic, will we eventually see a flattening out or a decline in the pace of home sales in Harrisonburg and Rockingham County? I'm not convinced that we will. Alongside all of the factors referenced above, the overall population growth in this area persists based on employers expanding, local college graduates staying in the area, parents of local college graduates retiring to the area, and much more. I think it is relatively likely we will continue to see a similarly active local housing market over the next few years. OK... tangent over... back to the numbers. ;-) ![]() This graph is showing the overall trends in home sales (quantity) and median prices over the past few years. I included it this month to draw out the magnitude of the raw data... we have seen the median sales price increase $62,000 over the past three years! That's great news for sellers, and for homeowners, but certainly is not very welcomed news for home buyers who have not yet bought a home. We saw a 10% increase in the median sales price in 2020 and 2021. I'm not thinking the increase will be as large in 2022, but I do think the median sales price will increase yet again this year. ![]() And where might the market be going from here, you might ask? Well... with a very strong month of contract activity in February (see above) it seems very likely that we'll see a strong month of closed sales in March. So, yes, we're about to enter the busiest time of the year... between March and August. Get ready! ![]() If you are hoping to buy a home soon, you might look at the graph above and get depressed by the low inventory levels. But... scroll back up to the previous graph for a moment and look at all of the contracts we usually see signed between March and August. Those buyers signing contracts (one could be you!) are almost all buyers signing contracts on homes that are listed for sale between March and August. So, while inventory levels at any given moment are not likely to increase over the next six months... there are almost positively going to be lots (and lots) of options of houses for you to buy over the next six months... or at least options of houses for which you can compete against lots of other eager home buyers. :-/ ![]() Indeed, the competition is fierce... and the market is moving quickly! The median "days on market" is five days right now... which means you need to go try to see any new listing of interest within the first day or two of when it hits the market for sale -- and you need to be ready to make an offer shortly thereafter if you are interested in buying that exciting new listing. Eventually we might (should?) see this metric start to increase a bit as the market slows... but we are definitely and assuredly not there yet. ![]() Lastly, how about those interest rates? If there is one external factor that has the highest likelihood of affecting home buying activity in 2022... it is rising mortgage interest rates. Just six months ago, the average mortgage interest rate on a 30 year mortgage was 2.87%... and it has risen more than a full percentage point in the past six months to 3.89% at the end of March. As such, not only are today's home buyers paying a higher purchase price for nearly any home that they might purchase -- but their monthly mortgage payment will also be higher now (than it has been in recent months and years) because of rising interest rates. It seems likely that these rates will either level out near 4% or continue to rise even a bit above 4% as we continue through 2022. OK! That makes it to the end of this month's recap of our local housing market. A few reminders for you... [1] Go eat at Magpie Diner. You're certain to love it! :-) [2] Looking to buy soon? Email me so we can chat about what you'd like to buy, and talk to a lender ASAP. Let me know if you'd like some recommendations. [3] Planning to sell soon? Let's meet to talk about your house, any needed improvements or preparations, pricing, timing, the market and more. Email me to set up a time to meet to talk. That's all for now. Be in touch anytime (email me or call/text 540-578-0102) if I can be of help to you or your family, friends, neighbors or colleagues. Hope to talk to you soon! | |
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Lots Of Home Buyers Are Still Competing For New Listings |
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![]() For many new listings, the competition is still quite fierce in Harrisonburg and Rockingham County. Here are three recent examples I've been involved with or heard of in the past 10 days... [1] A townhouse in the City of Harrisonburg under $200K received 12 offers within three days. [2] A duplex in the County in the $300K's received 7 offers within three days. [3] A detached home in the City of Harrisonburg in the $300K's received 16 offers within four days. Wow! Now, this won't be the case for every new listing, in every price range, in every location... there are more buyers in some price ranges and for some locations than others. This also won't hold true independent of how a seller prices their home. A home that ends up selling for $200K will likely have a different number of offers based on whether they priced the property at $195K, $199K, $205K or $225K. But... yes... the market is still quite active, with plenty of buyers ready to buy, and many (to most) new listings being scooped up quite quickly. If you're getting ready to sell this spring, we should talk sooner rather than later about timing, preparations, pricing and more. | |
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Home Buyers Just Entering The Market Should Despair, Then Rejoice |
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![]() Blue Line = Despair Orange Line = Rejoice As any buyer in today's market will tell you... there is very little on the market to buy right now. That's the blue line. Over the past 13 years there have been fewer, and fewer, and fewer homes for sale at any given time. But... more homes than ever before (in the past 13 years) sold in the past year, so there are very likely to be plenty of options of houses to buy coming on the market in future weeks and months. That said, they will likely go under contract - quickly - leaving us with low inventory levels all over again. So... would be home buyers... despair only for a moment about the lack of current inventory, and then rejoice that spring is coming and there will likely be plenty of homes to consider purchasing! | |
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Each Year, 10% - 15% Of Home Buyers Pay Cash In Harrisonburg, Rockingham County |
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![]() How often are home buyers paying cash for their homes in this area? It seems between 10% and 15% of home buyers are doing so each year according to data from the HRAR MLS. When a home sale is reported to the MLS, one of the required details is whether the purchase was made with cash or with financing. As shown above, 2021 feel right in the middle of the pack as far as the portion of home buyers who paid cash for their homes. So, what do you say, will you pay cash for your next home purchase? 😉 | |
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New Homes are an Increasing Share of Total Home Sales in the Harrisonburg Area |
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![]() First, some raw data... Resale Home Sales:
So, there have been more and more resale homes selling over the past five years. New Home Sales:
There have also been more and more new homes selling over the past five years. The graph at the top, though, tells a third story -- an increasing portion of home sales are new home sales. Between 2017 and 2020 new home sales comprised 12% - 14% of all home sales. Then, in 2021, that jumped up to 19% new home sales. Thus, last year, approximately one in every five homes sold was a new home. This would seem to be good news, generally, as there is an ever increasing number of people who want to buy homes and make Harrisonburg their home -- so we'll need to see more new homes to help provide that housing. | |
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200 Home Buyers Paid More Than 5% Over Asking Price For Their Homes In The Past Year |
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![]() Sometimes, you have to be willing to pay the price to get the house... Over the past year-ish (Feb 7, 2021 - Feb 6, 2022) there have been 1,660 home sales in Harrisonburg and Rockingham County. As noted earlier this week, 73% of buyers paid full price or more for their home -- which is 1,229 of those 1,660 home sales. But going a bit further... 200 buyers paid more than 5% over the asking price for the home they purchased in the past year. Looking just at those 200 transactions where buyers paid more than 5% over the asking price... on average, buyers paid $25,561 over the list price! How does that number strike you? It was much higher than I thought it would be... I guess the guy in the photo above is holding out $40,000 of cash -- slightly higher than the average of $25,561 noted above -- sorry for my illustrative exaggeration. ;-) | |
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January 2022 Home Sales, Like the Temperature, A Bit Cooler Than 2020, 2021 |
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![]() I'm sure a few more January home sales will still show up in the data before I put my market report together, but a first look at January home sales in Harrisonburg and Rockingham County indicates that the pace of home sales cooled a bit (like the temperatures) this January as compared to the last to months of January. Before the COVID surge (of home sales) we were often seeing 60 to 70 home sales in January, but there were more than 100 home sales in Harrisonburg and Rockingham during January of 2020 and 2021! Stay tuned for a full report of January home sales later this month, but it seems they will have dropped off a bit from last January. | |
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Will Home Prices Drop As Mortgage Interest Rates Rise? |
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![]() Question... Will Home Prices Drop As Mortgage Interest Rates Rise? Short Answer... I don't think so Long Answer... Above you'll find a graph showing the median sales price in Harrisonburg and Rockingham County over the past ten years, shown in blue, and the average mortgage interest rate during the same timeframe, shown in green. A few things to point out... [1] Yes, it is accurate to observe (see the red arrows) that while the median sales price was increasing rather quickly over the past four years, the the average mortgage interest rate was also dropping steadily. Did prices only rise because rates dropped? No, that does not seem likely at all. Did prices continue to rise as much as they did at least partially because rates were so low? Yes, that seems relatively likely. [2] Interest rates rose sharply in June 2013 and December 2016 (see the first two yellow circles) and sales prices did not start declining -- though, those increases in rates were followed by prolonged periods of declining interest rates. [3] Interest rates rose steadily (!) between mid-2017 and early 2019 (see the third yellow circle) and sales prices did not decline. [4] Interest rates started rising, and falling, and rising, and falling through pretty much all of 2021 (see the fourth yellow circle) and prices kept right on climbing. So... as we head into 2022 and as we start to see mortgage interest rates rising... will home prices decline? It seems unlikely that an increase in mortgage interest rates, alone, would cause home prices to decline. Yes, it is true that a buyer's potential mortgage payment will increase with higher interest rates, so that might reduce their buying capabilities - but plenty of home buyers, in this area, these days, seem to be buying below the top of what they could afford to buy -- so slightly higher mortgage payments may not affect them as much as we'd think. That was a lot of thoughts -- about a lot of numbers -- if you have thoughts of your own, feel free to email me as I welcome a variety of opinions and perspectives! | |
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2021 Harrisonburg Area Home Sales Were Amazingly High, But Not Quite Record Breaking! |
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![]() Nice try, 2021, but you didn't quite set a new record after all... Home sales have been on a roll for the past decade, increasing in pace almost every year between 2010 and 2021, and more than doubling in that timeframe. Way back in 2010 there were only 799 home sales in Harrisonburg and Rockingham County, and last year (2021) there were 1,666 home sales! But... that shocking 1,666 sales in a year was not quite a record. :-) Back in 2005, there were... 1,669 home sales! So, nice try, 2021... should have tried just a little bit harder. Will we see an actual all time record in 2022? Could we really see 1,670 home sales (or more) in Harrisonburg and Rockingham County? Stay tuned to find out. ;-) | |
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Wow! Yes, You Read That Correctly, Local Home Prices Increased 40% In Five Years |
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![]() The median sales price five years ago (2016) was $192,500. Last year, five years later, it was $270,000. That's a 40% increase in the median sales price over five years! A variety of thoughts come to mind as a result...
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Only About Half of Home Buyers In The City Of Harrisonburg Buy Single Family Homes |
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![]() Yesterday I observed that about two thirds of home buyers in our area (City of Harrisonburg plus Rockingham County) buy single family homes each year. In the City alone, it's a different story. Only about half of buyers in the City of Harrisonburg buy single family homes each year. The other half buy attached dwellings -- townhouses, duplexes or condos. That ratio of approximately half and half detached vs. attached has remained mostly consistent over the past decade. In fact, looking even further back... It appears that before the townhouse building boom of 2002-2007, it was closer to 60/40 with more buyers buying single family homes. As lots (and lots) of townhouses were built in the City of Harrisonburg between 2002 an 2007, the share of buyers buying townhouses increased significantly -- getting as high as 63% in 2005. Given the existing inventory of housing in the City it seems likely that this ratio now may stay around 50/50 for the foreseeable future unless we see some major new construction developments within the City with homes (detached or attached) for sale. | |
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Two Thirds of Buyers Purchased Single Family Homes Last Year in Harrisonburg, Rockingham County |
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![]() Last year (2021) two thirds of buyers purchased detached single family homes in Harrisonburg and Rockingham County. The other third of home buyers bought townhouses, duplexes or condos. It's interesting to see how this breakdown between detached and attached homes has fluctuated over the years. Way back in 2000 and 2001 four out of five buyers (81%) were buying detached homes. 2005, 2006 and 2007 were the years with the highest proportional share of home sales falling into the attached categories. Lots of townhouses were being built in that timeframe in many new (at the time) townhouse developments in the City of Harrisonburg. Now, we are seeing townhouses (and other attached homes) gaining more momentum again as their share of the market has increased from 72% to 67% between 2019 and 2021. Finally, it is interesting to see how this breakdown differs between the City and County for 2021 home sales... City AND County = 67% single family homes (33% not) City = 49% single family homes (51% not) County = 75% single family homes (25% not) Yes, you read that correctly, more attached homes (townhomes, duplexes, condos) than single family homes sold in the City of Harrisonburg last year. | |
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2021 Year In Review in the Harrisonburg Area Real Estate Market |
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![]() Happy New Year, Friends! I hope you had a delightful, relaxing, fun and healthy holiday season and New Year celebration. Today I am coming to you with a "year in review" of the Harrisonburg area real estate market in 2021. Before we get started, though, I'll introduce you to the sponsor of this month's market update. ;-) This month's market update is brought to you by... cookies!!! ![]() A delicious part of our family's holiday celebration is the annual Christmas Cookie Contest and this year there were some fantastic entries! The photo above actually only shows six of the ten cookies from this year's 19th Annual Christmas Cookie Contest - and it does not show the winning cookie - congrats, Aiden! As you reflect back on your holiday celebrations, I hope you are reminded (as I am) of plenty of delicious food, and even better... wonderful, cherished time with family near and far! Now, though, let's dive into some real estate data to better understand how exactly the year wrapped up in the Harrisonburg and Rockingham County real estate market. For those that like to check out every graph, even those not in this narrative summary, download the PDF with all the graphs here. ![]() The chart above quickly gets us into the big picture for our real estate market. First (1) you'll see that home sales ticked upwards a bit in December with a 1.46% increase over December 2020. But the numbers you've all been waiting for are shown as 2, 3 and 4 above... Home Sales Increased 11% in 2021. Sales Prices Increased 10% in 2021. Time On The Market Decreased 44% in 2021. So, a rather strong year for our local housing market! It was a fast paced market, with homes usually going under contract in less than a week. We saw more sales than in 2020, and prices were (as noted above) 10% higher in 2021 than 2020. I do think, however, that slicing and dicing this overall data a bit can be helpful. Let's first break it down by detached vs. attached, and then by City vs. County. Here is a summary of 2021 sales of detached homes... ![]() As shown above, there was an almost 8% increase in the pace of detached home sales in Harrisonburg and Rockingham County in 2021. This increase (8%) is slightly less than the overall market-wide 11% increase, meaning that a greater share of the increase home sales were of attached homes. The median sales price of detached homes in 2021 was $291,500... up 8% over the median of $269,000 in 2020. A few thoughts here... first, the 8% increase in the median sales price of detached homes is less than the overall market-wide 10% increase, meaning that the sales prices of attached homes must have *really* increased in 2021. Stay tuned for that. Secondly, it is pretty wild to see the median sales price of a detached home now approaching $300,000. That means that in 2021, only slightly fewer than half of home sales were over $300,000! Now, then, about those attached homes, which includes townhouses, duplexes and condos... ![]() Indeed, as predicted above... The pace of attached home sales increased more than that of detached home sales and more than the market as a whole. There were 20% more detached home sales in 2021 than we saw in 2020! The increase in the median sales price of these attached homes also increased much more in 2021 than the median price of detached homes. The median sales price of an attached home increased 17% from $193,000 to $225,000 in all of Harrisonburg and Rockingham County! So, half of buyers paid more than $225K for a duplex, townhouse or condo in 2021! Now, looking a bit more closely at the City vs. the County... ![]() Despite seeing very few homes on the market for sale in the City at any given time through most of 2021, we managed to see a rather large (!) increase in the number of City homes selling in 2021. After only seeing 416 City home sales take place in 2020, there were 24% more in 2021... with a total of 514 home sales. Despite this significant increase in the number of City homes that sold in 2021, we actually only saw a 3% increase in their median sales price. The median sales price of City homes selling in 2021 was only $225,000. This is somewhat striking in comparison to the market-wide (City + County) median sales price of $270,000. So, then, how about the County? ![]() Over the past year we actually saw a smaller increase in the pace of home sales, with only 7% more home sales in 2021 than in 2020. The median sales price of those County homes increased quite a bit more, though, with an 11% increase in the median sales price -- which moved up from $254,000 in 2020 to $281,000 in 2021! So, the pace of home sales increased more in the City than the County -- but the median price of those home sales was higher in the County than the City -- and that median price increased more, year-over-year, in the County than the City. Do what you will with that newfound comparative understanding of our local housing market. ;-) Next, looking at one of my favorite monthly graphs, the pace of monthly sales seemed to be just as chaotic as many of the other constant changes in our lives in 2021... ![]() Monthly home sales were *anything* but predictable in 2021. They bounced all around, jumping to record new highs, usually followed immediately thereafter by surprising lows. The market seemed to want to take an "every other month things will be crazy" approach to the timing of sales through out the year!? And what if I told you that the market "slowed down" in 2021? ![]() Yes, yes, I know, it's a bit of a stretch. Home sales rose 11% in 2021, so that's not really slowing down, right? Right. But... home sales increased 13% in 2020... and only 11% in 2021... soooo... slowing down, right? ;-) That's probably not an objective characterization of the market. By all accounts, the market sped up in 2021, even if the definitely-faster-than-normal acceleration was slightly slower than in 2020. We'll go with that. Looking now, at detached home sales trends on a graph... ![]() When looking at detached home sales only: The pace of detached home sales increased 8% in 2021... after having increased 9% in 2020. The median price of detached home sales increased 8% in 2021... after having increased 12% in 2020. So, maybe flattening out, barely, slightly, slowly? Or maybe not. And how about the attached home sales market? ![]() When looking at attached home sales only: The pace of attached home sales increased 20% in 2021... after having increased 22% in 2020. The median price of attached home sales increased 17% in 2021... after having increased 10% in 2020. Right, so, in such a strong seller's market are sellers having to negotiate much? ![]() We'll say "nope" -- sellers are decidedly NOT negotiating much, at all! Half of buyers paid 100% or more of the list price of the house that they purchased in 2021... following the same trend as in 2020! So, unless a house is obviously overpriced, and perhaps has been on the market for weeks or months, you likely won't be negotiating much if any as a buyer. Sooooo much buyer interest and activity has lead to inventory levels falling, and falling and falling... ![]() We are now experiencing (and have been for the past year) the lowest inventory levels I've ever seen. There are currently only 119 homes on the market in all of Harrisonburg and Rockingham County, which is 39% fewer options for buyers (at any given time) than where we were just two years ago! Which is probably why listings are going under contract SO quickly... ![]() A whopping 81% of all houses that sold in 2021 went under contract in the first 30 days of being listed for sale. And as mentioned earlier, the median is five days... so half of properties sold are going under contract in five or fewer days. Speedy! ![]() Visualized slightly differently, the graph above shows the annual trend in median days on market... so... homes have been going under contract faster and faster and faster over the past year and a half. It doesn't actually seem that they can go under contract any faster than they are now. If or when the market starts to slow down, we'll likely see it first in a change in this metric of how quickly homes are selling. Finally, did you hear mortgage interest rates are rising? ![]() Ha ha, sort of, kind of, but not meaningfully. Mortgage interest rates stayed below 3.25% for the entirety of 2021! This is so low in any historical context, that an increase over the past six months from 2.8% to 3.1% is not overwhelming or concerning to most buyers. As shown above, the average mortgage interest rate was actually at or below 3% (!) for most of the year! And... just like that... we have reached the end of my recap of the 2021 housing market in Harrisonburg and Rockingham County. Do you have questions about this data or these graphs? Or do you have questions that this data and these graphs did not answer? Ask away... just reply to this email! Finally, if 2022 will be the year that you hope to buy or sell a home, let me know if I can be of help to you with that process. I'd be delighted to work to help you accomplish your goals of buying or selling this year. Just reach out by email, phone or text (540-578-0102) and we can set up a time to meet to discuss your dreams, goals and timing! Now, go find that snow shovel and start doing some stretches to prepare for some extended shoveling time... they're now calling for 11 inches of snow for the Harrisonburg area on Sunday! | |
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My Predictions for the 2022 Real Estate Market in Harrisonburg and Rockingham County |
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![]() Keep in mind as you read this that I was horrendously off target with my 2021 predictions for our local housing market. :-) But, that being said, here's what I'm predicting and why... As shown above, there have been big gains in the number of home sales per year over the past few years in Harrisonburg and Rockingham County.
Why, then, am I being so conservative and predicting that we'll only see a 3% increase in the amount of homes selling in this area in 2022?
The usual disclaimer applies - I am very comfortable in saying that I might be completely wrong with this prediction...
Now, then, where will prices be headed in 2022? ![]() Sales prices of homes in Harrisonburg and Rockingham County increased dramatically over the past two years...
You'll note above that I am predicting a 5% increase in the median sales price over the next year. I'm actually split between two theories, and I ended up averaging them out for my prediction. :-)
So, which of these changes will we see this year in the median sales price? Will it be 0% or 2% or 5% or 10%? You'll note that I am not predicting a decline in the median sales price. Some (not many) home buyers seem to be thinking or hoping or theorizing that home prices will eventually come back down if they wait long enough. That seems relatively unlikely -- so I am not including declining sales prices as one of my predictions for 2022. Well, that about sums it up... I think we'll see 3% more home sales in 2022 at prices 5% higher than in 2021. But I'm ready to be wrong... quite wrong! What do you think? Where will sales and prices head as we move into 2022? | |
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My Predictions for the 2021 Harrisonburg Real Estate Market Were Terribly Inaccurate |
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![]() It seems I have been much too conservative in my predictions for our local housing market over the past few years. After a 12% increase in the number of home sales in Harrisonburg and Rockingham County during 2020, I thought we'd see a much smaller increase in 2021. I predicted we would see 3% more home sales in 2021 than in 2020. In actuality -- we saw 11% more home sales in 2021! This was the second year in a row of double digit (12%, 11%) growth in the number of homes selling in the Harrisonburg and Rockingham County area via the HRAR MLS. And how about those sales prices? I was also terribly wrong on this prediction... ![]() Again, we saw a big increase in 2020 -- with a 10% increase in the median sales price -- which led me to believe we'd see a smaller (4%) increase during 2021. Not so. The median sales price increased *another* 10% in 2021 up to $270,000 in Harrisonburg and Rockingham County. So -- in summary -- my predictions were not at all accurate. While 100% of the data is not recorded yet, it seems we saw an 11% increase in home sales during 2021 and a 10% increase in the median sales price! Stay tuned for my predictions for the 2022 real estate market -- which -- might be just as inaccurate as my 2021 predictions!? :-) | |
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City of Harrisonburg Housing Inventory Levels Fall Below 20 Homes For Sale... For First Time Ever!? |
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![]() There are now fewer than 20 homes for sale in the entire City of Harrisonburg! As you can see, above, the number of homes for sale at any given time has been falling rather consistently over most of the past five years. The several times when you see inventory levels rising are typically in the spring season. These extremely low inventory levels do not mean that fewer houses have sold in the City over the past five years. Here are the annual City home sales during that timeframe...
So -- plenty of homes are selling in the City this year -- more, in fact, than any of the past five years. These extremely low inventory levels thus mainly mean that as soon as City homes are coming on the market they are almost always quickly going under contract -- keeping inventory levels at any given moment QUITE low! | |
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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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