Embedded below is my full report on the Harrisonburg and Rockingham County real estate market as of July 2009.  Click the link below to read the report, and please use the comment section below to provide me with feedback or to ask any clarifying questions.
July 2009 Harrisonburg & Rockingham County Real Estate Market Report    
Click here to download the full report as a PDF.

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The Virginia Association of Realtors released their 2nd Quarter Home Sales Report last week, which clearly demonstrates that all real estate is local -- that is to say that all local markets perform quite differently!

The graph below shows the change in number of home sales in each local market in Virginia when comparing 2nd Quarter 2008 to 2nd Quarter 2009. 



Harrisonburg/Rockingham is actually one of the slowest markets in thestate, when compared to last year, with a 26.3% decline in the numberof home sales.  Interestingly, there are several parts of the statewhere home sales are picking up speed again: Northern Virginia,Lexington / Buena Vista, Greater Piedmont and Fredericksburg.  (clickon the graph above for a clearer, printable version)

Next, below, we see that there is also a great deal of variation in median sales prices across Virginia.



Harrisonburg is in the middle of the pack as far as changes in median sales price, with a -1.2% change in the last year (2nd quarter vs. 2nd quarter).  As you can see, some areas of the state have seen a 25% (or more) decline in median sales prices, and some areas have started to see median sales prices increase again.

In addition to the stats, you can also review the full (16 page) home sales report, or listen to the media conference call summarizing the report (listen carefully, and you might hear my commentary on the Harrisonburg / Rockingham market).

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Harrisonburg has a tremendous over-supply of student housing, but it's not the first time!  I've been engaged in some fascinating reading (thanks JGFitzgerald!) over the past day or so --- a Citywide Housing Analysis for Harrisonburg, Virginia compiled by S. Patz & Associates, Inc in 2005.  Yes, it's becoming dated, but it provides some valuable insights into the history of our local real estate market. 

Here are a few statements that are quite interesting within the current JMU enrollment and student housing context:


Wow --- and to think that in the past two years, new student housing units have been built to accommodate an additional 3,292 students!?!


This is interesting --- in the early 2000's there was an oversupply, then things were back to being balanced by 2005 (date of report), and we again have a significant oversupply in 2009.  This report identifies immigrants as a population that filled the vacant student housing in the early 2000's.  Will we see that again?  And if not, who will fill the vacancies?


Again --- this begs the question of who will fill the anticipated 2,470 empty "beds" this coming fall that are/were intended for college students.

If you're interested, there is a lot more very interesting data in this 129-page Citywide Housing Analysis report published in 2005.  I'll be taking a look at some additional sections in the days to come.

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In response to my monthly home sales report, Keston asked...


Let's take a look....at Massanutten, as well as other towns in Rockingham County...



Right off the bat, we see that Keston is correct.  It would take 13.7 months to sell the housing inventory in Harrisonburg & Rockingham County -- but when examining Massanutten alone, it would take 25.7 months -- nearly twice as long.

The other outliers are Dayton and Grottoes which are performing much better than the market as a whole, and Timberville which is performing very poorly (perhaps because of the small sample size).

Click on the graph above or on the data chart below for a printable PDF of the data.

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I hope you enjoy this brief overview of the June 2009 market report...



Read on for a full review of the state of the Harrisonburg and Rockingham County residential real estate market.  Or....download the full report:
June 2009 Harrisonburg & Rockingham County Real Estate Market Report



While the pace of home sales continues to decline (25% lower in 2009 than in 2008), the median and average sales price continue to stay relatively steady in our local real estate market --- showing a 2.5% decline (median) and 0.2% decline (average) when comparing the first six months of 2008 to the first six months of 2009.  Our market continues to out-perform most other markets in Virginia, evading the 20% - 40% loss in home values seen in many areas.



In this graph, we see that 2009 sales volume (purple line) is still hovering well below 2008 sales volume (blue line) --- but we are seeing the predictable seasonal increase in home sales during the summer months.  The remainder of 2009 will be interesting to observe, as many first time buyers close on properties prior to December 1st to obtain the $8,000 tax credit.  July always takes a slight dip, so we'll see if that holds true for 2009.



This graph captures all residential real estate activity as reflected in the Harrisonburg/Rockingham MLS.  The 2009 year-to-date sales figures now include six months of sales data, and show only a slight decline in median sales prices ($195,500 to $190,000).  They sales volume (yellow bars), however, continue to decline.



When examining only single family home sales in Harrisonburg and Rockingham County we see that the median sales price continues to decline at a relatively slow rate (1%, 4%, 3%) when comparing 2009 to 2008 -- the good news is that single family homes (as a whole) aren't losing value as they are in many other markets.



When examining only townhome sales in Harrisonburg and Rockingham County we note that while the sales volume has dropped dramatically since 2005 (-18%, -15%, -37%), the median sales price has gained during that time period (2005 vs. 2009) and has stayed relatively steady between 2006 and 2009.



This graph shows a normalized trend of home sales by charting the ongoing sum of the preceding 12 months' sales.  We continue to see a decline in this metric, and likely will until the pace of sales stops its decline.



Inventory levels have stayed relatively level over the past three months, and have declined as compared to a year ago (932 vs. 956).  Lower inventory levels will (slowly) lead to a healthier local real estate market, as a balance between buyers and sellers returns.



With inventory levels holding steady, the number of months of supply of homes in the three lower price ranges noted above has stayed relatively steady.  We continue to see an increase in supply of $400k+ homes as compared to the sale pace of these homes.



After a relatively sharp decline in median price per square foot between 2008-Q2 and 2008-Q4, we have now seen an increase over the past two quarters in this metric.  This may be any early indicator of the stabilization of our local market, as the price that buyers are willing to pay per livable space stabilizes.



The chart above examines time on market for homes sold in Harrisonburg and Rockingham County during the past six months.  Homes with the lowest price points are selling the quickest, and homes in the upper price ranges are taking the longest time to sell. 

For example, overall only 11% of homes took longer than 1 year to sell, but 26% of homes selling over $400,000 took longer than a year to sell. 

Of note, the average days-on-market has actually declined since last month's market report.  Last month's report showed an average of 193 days, compared to the new overall average of 188 days.



When examining new single family homes in our local market, we see a steady decline since 2005 in the number of homes that are selling (yellow bars) accompanied by a slow decrease in the median price per square foot since 2006 (green line).  Of note, the  current median price/sf is still well above the 2005 level.



The graph above depicts the number of lots (less than 1 acre) selling in Harrisonburg and Rockingham County since 2000.  We continue to see only a small number of buyers in the market for building lots, with only 14 such closings having occurred during the first six months of this year.



Land sales (tracts larger than 1 acre) have also markedly decreased since 2005, but aside from the spike of activity in 2005, the pace of these land sales remained relatively constant between 2002 and 2007.  Last year, and the projected figures for this year show that there are very few buyers in the market for land at this time.

Download the full report here:
June 2009 Harrisonburg & Rockingham County Real Estate Market Report

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If you ask most people, you'll be told that starter homes are a much more stable segment of our market right now --- and that the higher end market is definitely doing much more poorly.

As it turns out, both markets are performing well, depending on how we examine the issue.

Starter homes are performing well!



As you can see in the chart above, there is a much healthier supply of homes below $200,000 than in any other price range.  Put a few other ways:

• It would take 10 months for all homes currently on the market under $200,000 to sell, as opposed to the 24 months it would take for homes priced above $400,000.
• Each month 1 in 10 homes on the market priced under $200,000 is sold --- as compared to 1 in 15, 16 or 24 for the higher price ranges.

Yet at the same time, expensive homes are performing well!


   *** 2009 total sales figures are extrapolated from Jan 1 - June 15 data.

Of note, the decline in home sales in our market has not affected all price/size ranges in the same way.  Since prices change over time (homes shift into different price segments), I examined the change in pace of home sales by dividing our market into starter homes (0 - 1499 SF), mid-range homes (1500 - 2500 SF) and large homes (2500+ SF).  You'll note that:

• The pace of starter home sales has fallen 58% between 2006 and 2009.
• The pace of mid-range home sales has fallen 58% between 2006 and 2009.
• The pace of large home sales has only fallen 30% between 2006 and 2009.

So, while it almost certainly takes longer for larger homes to sell, it's not because there are fewer buyers seeking that product.  In fact, the buyers haven't fallen out of that price/size range nearly as much as they have disappeared from the starter home and mid-range sized home markets.

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View a video introduction to the May 2009 Real Estate Market Report:



Read on for a full review of the state of the Harrisonburg and Rockingham County residential real estate market.  Or....download the full report:
May 2009 Harrisonburg & Rockingham County Real Estate Market Report



The four most commonly referenced measures of our local housing market (sales volume, median sales price, average sales price and average days on market) are all in worse shape in May 2009 than they were a year ago.  However, the median sales price is likely the most meaningful of the measures, and it continues to show a decline of only 3% when comparing May 2008 to May 2009, or when comparing January-May 2008 to January-May 2009.



In this graph, we see that 2009 sales volume (purple line) is still hovering well below 2008 sales volume (blue line) --- but the gap closed slightly in May as compared to March and April.  Perhaps we are seeing a normalizing trend, and sales volume in June, July and August of this year will be much closer to 2008 sales levels.  Greater stability will return to our market when sales volume stops declining.



This graph captures all residential real estate activity as reflected in the Harrisonburg/Rockingham MLS.  The 2009 year-to-date sales figures now include five months of sales data, and show only a slight decline in median sales prices.  Of note, the median residential sales price has not significantly changed since 2006.



When examining only single family home sales in Harrisonburg and Rockingham County we see that the median sales price continues to decline at a relatively slow rate (1%, 4%, 7%) when comparing 2009 to 2008.  Amidst these slight declines, the pace of sales (yellow bars) continues to decline drastically.



When examining only townhome sales in Harrisonburg and Rockingham County we note that while the sales volume has dropped dramatically since 2005 (-18%, -15%, -37%), the median sales price has gained during that time period (2005 vs. 2009) and has stayed steady between 2006 and 2009.



This graph shows a normalized trend of home sales by charting the ongoing sum of the preceding 12 months' sales.  We continue to see a decline in this metric, and likely will until the pace of sales stops its decline.



Of note, inventory declined slightly between the end of April and the end of May.  This is great news for the overall health of our market, as it will reduce the high inventory levels and slowly start to balance out our market.  This is a surprising trend for the early summer months!



With inventory levels holding steady, the number of months of supply of homes in each price range noted above has stayed relatively steady.  Of note, this is the first month that any of these trend lines have crossed, as can be noted between the $200k-$300k and $300k-$400k lines.



The median price per square foot of all single family homes sold since 2002 in Harrisonburg and Rockingham County shows that homes have started selling at a somewhat higher rate over the past several quarters when examining their cost per functional space. 



The chart above examines time on market for homes sold in Harrisonburg and Rockingham County during the past six months.  Homes with the lowest price points are selling the quickest, and homes in the upper price ranges are taking the longest time to sell. 

For example, overall only 10% of homes took longer than 1 year to sell, but 26% of homes selling over $400,000 took longer than a year to sell. 

In contrast, only 13% of these homes over $400,000 sold in the first three months, while 37% of homes selling for less than $200,000 sold in the first three months of being on the market.



When examining only new single family homes in Harrisonburg and Rockingham County, we can see a steady decline since 2005 in the number of such homes that are selling (yellow bars) accompanied by a slow decrease in the median price per square foot since 2006 (green line).



The graph above depicts the number of lots (less than 1 acre) selling in Harrisonburg and Rockingham County since 2000.  The last several years have been unbelievably slow for lot sales, likely because many builders have been holding back on starting construction on new homes given the trends in the residential sales market.



Land sales (tracts larger than 1 acre) have also markedly decreased since 2005, but aside from the spike of activity in 2005, the pace of these land sales remained relatively constant between 2002 and 2007.  Last year, and the projected figures for this year show that there are very few buyers in the market for land at this time.

Download the full report here:
May 2009 Harrisonburg & Rockingham County Real Estate Market Report

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For some time I have been tracking price per square foot trends for all single family homes in Harrisonburg and Rockingham County.  These appear in my monthly market report, and show a median price per square foot of $80/sf back in 2002, a high of $131/sf in 2006 and a current value of $123/sf.

In talking to a potential developer last week, he inquired about price per square foot trends for new construction.  This isn't an easy thing to calculate, for several reasons:

• We don't have a consistently used "New Construction" field in our MLS. 
• Single family homes built on larger parcels would inflate the median price per square foot
• Finished and unfinished basement square footage can muddy the waters.

We devised a plan to account for two of these three challenges.  First, I would search in any given year for homes reported as being built that year or the year prior (for 2003 homes, I'd look for 2003 closings where the home was reported as being built in 2002 or 2003).  I'd also limit the search to homes built on lots of one acre or less to remove the value of the land as a significant factor.

Below you will see the results, with a starting value of $99/sf in 2002, a high of $150/sf in 2006, and a current value of $140/sf.



I also graphed the number of applicable home sales in each year since 2002 to put the market into perspective.  Click here, or on the image above, for a clearer PDF version of this graph.

Closing thoughts:

• This represents all single family homes, regardless of size or location.
• If you're pricing a new construction home to sell, you'll need a more specific analysis to address your level of construction quality, the location of the building lot, etc.
• If you are evaluating a builder's proposal, please bear in mind that these figures are based on homes sold as total packages, thus including water/sewer/well/septic, driveways, sidewalks, etc.

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The questions continue:

• Are home values increasing or decreasing in our local real estate market?
• Are homes more or less affordable now as opposed to a year ago?
• Will homes in Harrisonburg and Rockingham County hold their value over the next year?

Looking back at last month's real estate market report showed that the median value of single family homes had held steady between 2008 and 2009.  The median sales price during Jan-Apr 2008 was $215k, and it was again $215k for Jan-Apr 2009.

I'll be issuing my May report in the new few days, but in the meantime I thought I'd explore the big value questions again from a few perspectives.  Here's what I found:

Median Homes Prices Decline

When now examining January through May, we see a median home value of $215,000 (still) for 2008, but a median value of $205,000 for 2009.  How did we drop $10k when comparing Jan-Apr 2009 and Jan-May 2009?  Smaller and less expensive homes sold in May 2009 (avg = $197k, 1906sf) as opposed to during the first four months of 2009 (avg = $240k, 2048sf).

So....despite Jan-May 2009 median home prices being down compared to the same months in 2008, perhaps it is because smaller (and less expensive) homes are selling?

Larger Home Market Outpaces Smaller Home Market

The data above suggests that perhaps median home values are declining because smaller homes are selling right now.  Not so fast!

During Jan-May 2008, 39% of homes that sold had 1500 or fewer square feet.  This declined in 2009 to only 35% of homes sold during Jan-May 2009.

During Jan-May 2008, 21% of homes that sold had 2500 or more square feet.  This increased in 2009 to 26% of homes sold during Jan-May 2009.

These are relatively small differences, and they may not be significantly, but they refute the hypothesis that median home prices are declining because smaller homes are selling.

Are First Time Buyers Procrastinating?

The data above is a bit surprising to me --- I suspected that we would see an increase in "starter homes" (often less than 1500 square feet) because of the financial incentives currently available for first time buyers.  The combination of an $8,000 tax credit, plus historically low interest rates is predicted to bring lots of first time buyers into the market. 

These first time buyers don't seem to have shown up in large numbers so far, based on the slower sales in the most affordable price range.

Price Per Square Foot Declines

As one last look at home values, I thought I'd take a look at the average price per square foot of the single family homes sold in Harrisonburg and Rockingham County in Jan-May 2008 versus Jan-May 2009. 

Last year we saw an average price per square foot of $130 during this time frame, as compared to $118 per square foot this January through May.

Making it Actionable

To obey my own imperative, here are a few thoughts on how this might affect you and your real estate decisions:

• If you're selling a home, or preparing to do so, price it well.  Don't get overly greedy (or hopeful) --- base your pricing on recently sold data, and competing properties for sale.
• If you receive an offer on your home for sale, consider it within the context of value trends and supply trends.
• If you are buying a home, negotiate knowing that supply is high (good negotiating point) but that home values aren't declining 10% - 40% like they are in some areas of the country.
• If you're a first time buyer, get in the game already!  Don't forget you need to close by November 30, 2009 to take advantage of the $8,000 tax credit.
• If you're a first time buyer, consider renting if you won't be in your newly acquired home for at least 3 or more years.
  

Stay Tuned!

A far more detailed analysis of our local real estate market will be available in the next few days.  Until then, wrestle with the data points above, and let me know if you have any related revelations or hypotheses.

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In a meeting last week with a potential client, I was asked a great question amidst showing off some of my recent market report:


What a great point --- it's marvelous to have lots of interesting analysis of market data, presented in an easily comprehensible format --- but how do we transform it into something that actually helps my clients make better real estate decisions.  Here were/are my responses:

1. Everyone selling or buying in our local market (or considering doing so) needs to have a solid understanding of the state of our local real estate market, regardless of how "in touch" they consider themselves to be.  This should be based on facts (sales data analysis) as opposed to conversations around town about "how things are going."
   
   
2. Once a buyer, seller, builder or developer knows where we are now, they need to be able to guess (with some certainty) where we're headed.  My market reports solely provide a perspective on the past, but you can easily follow the local trends to make save estimates of future market performance.
   
   
3. Perhaps the most important aspect to consider is that in almost all cases, a buyer, seller, builder or developer will need more than just my regular market report to make good decisions.  You may need specific sales data on townhomes under $160k in the city, or lot sales over 1 acre, etc.  The best way to make good real estate decisions is to have data analysis performed that is directly related to the properties in which you have interest.

So....do you have any questions about our local real estate market that would be helpful to answer here in this space, or shall we take it offline?

And by all means, if you see data analysis or reporting on this blog that is not providing actionable information or statistics, call me out!  I'd like to make them actionable for you!

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We've experienced several years of significant declines in sales activity in Harrisonburg and Rockingham County. 

• There were 14% fewer home sales in 2006 as compared to 2005.
• There were 13% fewer home sales in 2007 as compared to 2006. 
  
• There were 25% fewer home sales in 2008 as compared to 2007. 
  
• Thus far (Jan-Apr) there have been 28% fewer home sales in 2009 as compared to 2008.

My hope for this year, however, has been that we'll be able to at least have as many home sales as there were last year (2008).  As mentioned above, we're not doing so well at meeting that target --- being 28% below last year so far.

However, we (Coldwell Banker Funkhouser Realtors) continue to see a strong increase in the number of properties being viewed on our collection of (65) web sites.  This is often a leading indicator of forthcoming sales activity.



So, I'll remain optimistic for the last 10 days of this month and see where we end up.  So far this month there have been 45 home sales in our market, and last year during the same time period there were 46 home sales.  Perhaps we'll catch up with last year this month, and then stay ahead or surge ahead!?

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As a brief variation from my typical long and detailed analysis, here are two quick market observations...

1. BAD: Only 11 residential properties sold in the entire month of April in the City of Harrisonburg.  There are 338 for sale right now, which makes this particularly unexciting.
    
   
2. GOOD: Thus far in May, 44 residential properties have sold in Harrisonburg and Rockingham County --- this is in contrast to 46 properties in the same period last May.  Perhaps our year-to-date sales trend (29% decline) won't continue into the summer months!?

Perhaps we're starting to see the impact of the $8,000 first time buyer credit?  Or the historic low interest rates?  Or the huge selection of properties for sale?

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Some of you think this, don't you?  For the past month I have been discussing this topic (via e-mail) with a statistician at JMU, and it has been a very helpful dialogue (for me) as I've explored some new perspectives from which we can examine home values. 

The statistician's hypothesis is that homes have increased so quickly in value here in Harrisonburg and Rockingham County, that they are now significantly overvalued and will need to decline by 30% - 50%.  I started to explore this a few weeks ago in this article:  Home Value Projections for Harrisonburg and Rockingham County.

But here's the latest...



Here's what we're seeing above:

• The blue line shows actual median home sales prices based on data from the Harrisonburg-Rockingham MLS. 
  
• The green line uses the 2000 data point from the blue line, and then tracks what the median sales price "should be" --- by accounting for inflation, as well as a 2.3% increase per year.
• The 2.3% increase per year is the average increase in home values per year (after inflation) per the U.S. Census Bureau.
• Per the chart above, between 2005 and 2008, homes were indeed "over-valued" in our market.  But with the relatively steady median sales price since 2007, we are now getting back towards the projected median sales price given normal inflation and normal home value increases.
• As you can see, the actual median sales price in 2009 and the predicted median sales price are very close --- in fact, there is only a 2.78% gap between the two data points.
  

My Conclusion:  Homes (as a whole) in Harrisonburg and Rockingham County are not significantly over-valued, but it may be until the end of this year, or into next year that we start to see a steady increase in prices again.

Your Conclusion:  Regardless of whether you are a statistician or someone who just barely understands the chart above, I'd love to hear your thoughts.  What do you think of the data presented here?   Do you think homes in our area are over-valued?

  For those of you who just have to see the numbers....

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Read on for a full review of the state of the Harrisonburg and Rockingham County residential real estate market.  Or....download the full report:
April 2009 Harrisonburg & Rockingham County Real Estate Market Report



Homes in Harrisonburg and Rockingham County are continuing to sell more slowly than in recent years -- when examining January 2009 - April 2009, we see a 29% decline compared to 2008.  However, we continue to see median and average sales prices staying relatively level, with a 3% decline in median sales price and a 3% increase in average sales price.  The homes that have sold this year took, on average, 21% longer to close than in 2008.



As with each of the past three years, we saw a decline in home sales as compared to last month (March).  April 2009 home sales (50 sales) were 38% lower than April 28 (80 sales).  We will likely start to see an increase in May, as we have each of the past three years.  The important thing to note will be how quickly sales increase, and whether we will be able to match the 2008 sales pace.



This graph shows a normalized trend of home sales by charting the ongoing sum of the preceding 12 months' sales.  We continue to see a decline in this metric, and likely will until the pace of sales stops its decline.



Some people have noticed an increase in activity in the real estate market, but it is likely simply an increase in homes for sale that they are noticing.  These increasing inventory levels are not welcome news to sellers, as it continues to over saturate our market.



Unfortunately, the increased inventory of homes on the market over the past several months has not been matched by a corresponding increase in sales.  Thus, the number of months of supply has started to increase again in all price ranges.



This graph captures all residential real estate activity as reflected in the Harrisonburg/Rockingham Multiple Listing Service.  The 2009 year-to-date sales figures now include four months of sales data, and show only a slight decline in median sales prices.  This is positive, however, the pace of sales continues to decline.



When examining only single family home sales in Harrisonburg and Rockingham County we see that the median sales price is holding steady as compared to last year and has not had a significant net increase or decrease since 2006.  This is occurring despite a drastic reduction in sales pace between 2006 and 2009.



Sales of townhomes in Harrisonburg and Rockingham County continue to slow, and median prices have started to slip ever so slightly down to $156,500.  This marks a median value slightly below the 2006 median value of $160,850, and is coupled by a continued decline in sales pace for townhomes.



Examining the median price per square foot of sold single family homes in Harrisonburg and Rockingham County shows that homes have started selling at a somewhat higher rate when examining their cost per functional space.  We are now approaching mid-2005 levels, at $123 per square foot.



The chart above examines time on market for homes sold in Harrisonburg and Rockingham County during the past six months.  Homes with the lowest price points are selling the quickest, and homes in the upper price ranges are taking the longest time to sell. 

For example, overall only 10% of homes took longer than 1 year to sell, but 34% of homes selling over $400,000 took longer than a year to sell. 

In contrast, only 10% of these homes over $400,000 sold in the first three months, while 39% of homes selling for less than $200,000 sold in the first three months of being on the market.

Download the full report here:
April 2009 Harrisonburg & Rockingham County Real Estate Market Report

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When preparing to sell your house, bear in mind that the value of your house is not (necessarily):

• what you paid for it plus X% appreciation per year
  
• what you paid for it plus the cost of your upgrades
• what you paid for it
• the tax assessed value of the property
• what it appraised for a year ago

Here's how I work with homeowners to determine the value of their home...


 click image above for printable (and legible) PDF

If you click on the analysis above, you'll see that I am comparing the property being evaluated to a set of recently sold properties and a set of currently available properties.  (Or, that's what I was doing at the time --- this analysis is from 2008). The theory is this --- we can best understand what your property is worth by evaluating it in the context of very similar homes that have recently sold, as well as in the context of what is on the market today.

A few notes about this general market analysis I perform before putting properties on the market:

• In most cases, the homes we're using as comparable properties ("comps") aren't exactly identical to the subject property.  Thus, you'll note in the analysis above that I make value adjustments to each comp based on how it is different (better/worse) than the subject property. 
  
• After adjusting each comparable sold (and active) property to bring it closer in line with the subject property, I then average the adjusted values to determine a market value as suggested by sold properties, and a market value as suggested by properties for sale.
  
• There are some cases where I don't conduct this thorough of an analysis, if there are multiple identical comps.  An example of this is a 4-bedroom condo at Hunters Ridge.  We don't need to conduct a detailed analysis of the characteristics of each condo that sold or is available --- they are all very similar.
• As a colleague of mine said to me today --- the best pricing strategy today is to be just barely above the highest sold comparable, and to make sure that the price is below the lowest active comparable. 
• After conducting the analysis shown above, I typically send a market analysis document to my clients with this spreadsheet as well as the full property details on each sold and active property.  We then discuss the entire situation to make sure we are seeing eye to eye on where we should be to price most competitively for the market.
   
  

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A few days ago I mentioned that lot sales in Harrisonburg and Rockingham County (of less than an acre) have slowed dramatically.  In fact, the rate of such lots sales has fallen 82% since their peak in 2004.

Lane Chesley then asked about lot sales of over an acre, hypothesizing that such sales might not have fallen as much as those may be more desirable parcels.  Let's take a look....



As you can see above (click the graph for a PDF) --- sales have also fallen rather dramatically of parcels larger than an acre, but Lane was correct in his assumption.  Lot sales (larger than an acre) have only fallen 69% since their peak in 2005.  Also of interest is that even though less than an acre lot sales slowed 25% between 2004 and 2005, lots sales greater than an acre increased 57% during the same time period.

Thus, buyers of smaller lots (likely in a subdivision) began pulling back in 2005, but it wasn't until 2006 that buyers of larger lots started pulling back.

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As I expressed some time ago, my hope for the 2009 Harrisonburg and Rockingham County real estate market is that we would see the end of the ever-decreasing number of home sales in our market.  We have seen (approximately) a 25% decrease in number of sales between 2006-2007, 2007-2008, and 2008-2009.

Lot sales, however are doing much worse!



In the first four months of this year (2009), In all of Harrisonburg and Rockingham County, there have only been 11 lot transfers of less than one acre. 

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One of the most difficult questions to answer in our current real estate market is how long it will take for a home to sell.  The data below will start to shed some light on what you might expect, but there are still many variables that could make your property sell very quickly or very slowly.

This chart analyzes all homes sold in Harrisonburg and Rockingham County in the past six months, and attempts to provide more meaning to the "Days on Market" metric than I typically provide in my market reports.  Many thanks to Liz (who suggested a histogram format) and Tisha (who suggested breaking it down by price range).



Several observations can be made based on this analysis...

1. The sole days on market indicator I had been using (average = 183 days on market) is woefully inadequate for describing how long it is taking homes to sell.
    
   
2. Price is a huge factor --- homes that sell below $200k take (on average) 5 months to sell.  Homes that sell above $400k take (on average) 10 months to sell!
    
   
3. Of the homes that sold in the past six months, 31% of the homes that sold above $400k took more than a year to sell.  In contrast, only 3% of homes that sold below $200k took more than a year to sell.
    
   
4. Amazingly, one-third of homes that sold below $200k closed within 90 days.  In contrast to that, only one-tenth of the homes that sold above $400k closed within 90 days.
   

Before listing your home for sale, it can be helpful to look at days on market data for homes in the geographic area and/or price range of your home.  It won't always provide clear-cut guidance for you, but it may help further refine your expectations.

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Things may be picking up in the Bridgewater real estate market according to observers on the Bridgewater Buzz --- not to mention that my new listing in Bridgewater went under contract in less than a week (with two offers). With all that excitement, let's take a moment to look at the last two years of the Bridgewater real estate market.



A few broad generalizations that can be made include:

1. When comparing 2007 and 2008, the real estate market slow down that was seen across the country affected Bridgewater a bit more than the county at large.
2. While home values (according to median and average numbers) stayed steady between 2007 and 2008 in the County, they may have slipped slightly in the Bridgewater area.  The average sales price is unchanged, but the median sales price is down 9%.
3. Homes in Bridgewater continue to sell faster than in Harrisonburg and Rockingham County at large, even though it took a little longer to sell homes in 2008 as opposed to 2007.

A few other interesting facts about the the homes that are selling in Bridgewater, when examining sales from Jan 1 '08 to the present:

1. Homes sold in Bridgewater were of an average age of 34.5 years, with 12 homes built since 2000, 12 homes built in the 80's or 90's, 15 homes built in the 60's or 70's, 6 homes built between 1900 and 1950, and 3 homes built in the 1800's!
2. Homes sold in Bridgewater had an average square footage of 1932 square feet.  Of these, 19 had less than 1500 square feet, 17 were have between 1500 and 2500 square feet, and 12 were larger than 2500 square feet.
3. Homes sold in Bridgewater are built on average of a third acre.  12 homes are on less than a quarter acre, 9 homes are on a half acre are more.

If you are looking to buy a home in Bridgewater, you currently have 39 choices, though only 6 are less than $200k, and 8 are over $500k!  Click here to view these 39 homes  The link expires in 14 days, so if it's past May 2, 2009 call (540-578-0102) or e-mail (scott@cbfunkhouser.com) me for a new list of properties for sale in Bridgewater.

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Homes in the City of Harrisonburg are currently selling at approximately 95% of their assessed value.



Taking a look at the data above, you'll note that approximately 30% of homes in Harrisonburg sold above their assessed value in 2009 thus far.  An additional 40% (roughly) of homes sold between 90% and 100% of their assessed value, and the final 30% sold for less than 90% of their assessed value.

The average (and median) ratio between sale price and assessed value is 95% thus far this year. 

Is this actionable?  Not necessarily --- assessed values are not a reliable measure of what you could sell your home for in any given real estate market.  But, do note that we can no longer assume that most if not all properties sell at or above their assessed value.  In fact, 3 out of 4 properties selling these days are selling below their assessed values!

Additional yet-to-be-opened can of worms:  are home prices lower now than they were a year ago, or are assessments to high?

This is another great question from a client --- if you have a question about our local real estate market that could be best answered with some data analysis, send it my way!  Call me at 540-578-0102 or e-mail me at scott@cbfunkhouser.com.

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