Analysis
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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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Median Sales Price of Detached Home Up $50K Over Past Two Years! |
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 This graph was in my full market report yesterday but it sort of deserves a bit of special attention by itself. Over the past two years, the median sales price of detached homes selling in Harrisonburg and Rockingham County has increased by $50,000. Before that, it took five years to increase by $50,000. As such, over the past seven years the median sales price has increased by $100,000. So... if you bought a median priced detached home seven years ago ($190K in 2014) it very well might be worth $100,000 more today! These are startling changes in property values in our area over the past seven years, especially if you haven't been reading my monthly report each month for the past 84 months! ;-) | |
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Harrisonburg Housing Market Is Hot, Hot, Hot In 2021 |
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 Happy Tuesday Morning, and welcome to day two of another surprisingly warm December week in the Shenandoah Valley! This month's market report is brought to you by... fire...  Why fire, you ask? Partly because the local real estate market is... on fire! ;-) OK, perhaps that one was too obvious. Secondly, though, because it's a great time of year to gather around a fire in the evening and spending time talking about the important things in life. Be that around the fireplace in your home... or huddling around a fire pit, barely staying warm as an evening stretches on. The fire above is in our recently built fire pit in our backyard... where I recently gathered with several friends and we talked and laughed well into the night. However you spend your evenings in the coming weeks... around a fire, or otherwise... I hope it is a time of conversation and connection with those who matter most in your life. But now, back to that local real estate market... which, yes, is on fire... The photo on the cover of this month's market report is an aerial view of Congers Creek where new townhomes are being built and offered for sale near Sentara RMH Medical Center. Also, before I start into the charts and graphs, you can also download a full PDF of my market report here. Now, let's throw another log on the fire and sort through this month's data...  A few things to point out in the data table above... [1] Home sales were actually a bit slower this November than last. We saw 135 home sales this past month -- compared to 143 last November. [2] Despite a slightly slower November, we have seen quite a few more home sales in the first 11 months of this year than last. There were only 1,358 home sales in the first 11 months of last year and we've seen 1,525 home sales in the same timeframe this year. [3] The median sales price of homes sold in Harrisonburg and Rockingham County is 10% higher this year (Jan-Nov) than last year... having risen from $244,900 to $269,450! [4] Homes are selling almost twice as fast this year (5 days) as last year (9 days) as per the change in the median days on market. Now, just to point out a few differences in the market for detached homes and attached homes, which includes townhouses, duplexes and condos...  As shown above... [1&3] We've seen almost a 9% increase in the number of detached home sales selling this year as compared to last year -- but a much more significant 20% increase in the number of attached homes that have sold. [2&4] The median sales price of detached homes has risen 9% this year -- but -- wait for it -- the median sales price of attached homes has risen 18% over the past year. This is a significant increase for attached homes, from a median sales price of $191,000 up to $225,000. When we start looking at month to month sales data, things get a bit odd...  Perhaps everything is a bit odd this year? :-) The red line above shows the number of home sales each month in Harrisonburg and Rockingham County, as compared to the blue line which is showing 2020 home sales. As you can see, home sales were extraordinarily strong in August and October... and then slower than last year in September and November. So... what does December hold in store for the local housing market? It's anyone's guess! :-) But regardless of what happens in December... this year has already outperformed last year...  Indeed, after just 11 months this year we have seen 1,525 home sales as compared to only 1,495 in all of 2020. There was a significant increase in local home sales in 2020 and in early 2021 there were doubts as to whether 2021 could really stay on pace with such a robust year last year. Well, 2021 is finishing out strong.. already having broken through the high water mark set last year. Now, a quick -- startling -- observation about the changing values of detached homes in our area... Maybe you already picked up on it based on the graph above... but... WOW! [1] Over the course of five years (2014-2019) the median sales price of detached homes increased by $50,000. Then, over the course of only two years (2019-2021) it did it again! ...and... [2] Over the past seven years (2014-2021) the median sales price of a detached home in Harrisonburg and Rockingham County has increased by $100,000... from $190,000 up to $290,000! These are startling changes in property values in our area over the past seven years, especially if you haven't been reading my monthly report each month for the past 84 months! ;-) Now, moving beyond what's selling, let's look for a moment at current inventory levels of homes that are available for sale. Remember, though, that these figures are showing "moment in time" inventory levels. There have been plenty of homes offered for sale in recent months even if very few are on the market now. First, let's look at houses for sale by property type...  This one surprised me. I knew that inventory levels were dropping, but I didn't know how far they had declined when it came to attached homes -- townhouses, duplexes and condos. A year ago there were 43 attached homes on the market for sale -- now, only 17 are currently available for sale. This 60% decline means that buyers are snapping up attached homes faster than sellers are listing them for sale or building them. But wait, there's more. Take a look at this breakdown between the City and County...  Again, this graph reveals a rather surprising trajectory. A year ago there were 46 homes for sale (detached or attached) In the City of Harrisonburg. Today there are only 18 homes for sale in the City. Read that twice, perhaps. There are only 18 homes (detached homes, townhouses, duplexes, condos) currently available for sale in the City of Harrisonburg. Again, this is an indication that buyers in the City are snapping up homes more quickly than sellers are selling them. Despite the 50 to 60 degree temperatures of late, you might be wondering if the market is remaining strong as we head into the winter...  Indeed, the market is remaining strong. The graph above shows the median number of days it took for houses to go under contract - with each data point calculated from the properties going under contract in the previous 12 months. As you can see, we have sort of bottomed out at a median of five days on the market here over the past five months. If the market is starting to cool off or slow down, this graph is one of the places we are likely to first see that show up in the data. Given the low availability of houses to purchase, are some buyers thinking about building a house?  Maybe so! The graph above shows the number of building lots (of less than an acre) sold per year over the past six years. As you can see, the market demand for building lots has been increasing for several years now. Unfortunately, construction costs are also increasing, which may make it at least somewhat difficult for these lot buyers to build a home and stay on budget -- but at least they will have a bit more control over getting the house they want, as compared to competing with many other buyers in the resale market. One last graph and then I'll let you go out in your backyard to start gather kindling for the fire you plan to have this evening. ;-)  For years I've been thinking mortgage interest rates will be starting to increase. It keeps not happening. Over and over. This year, it seemed -- again -- they were definitely going to increase. Back in January through March it seemed we were headed that way -- but, nope. Then again in August, September and October, but then, maybe not. So, the cost of money is still extremely low! Alright, that brings this month's overview of our local housing market to a close. Thanks for hanging in there with me if you made it to the end, and I hope the information and context I have provided has been either helpful or entertaining, or both! I hope the last two-ish weeks of 2021 go well for you, and that you are able to enjoy some down time with family and friends. If you enjoy some time around a fire, maybe you can make a s'more for me -- I like the marshmallow to be toasted very, very, very slowly and thoroughly until it is a golden brown on the outside and completely gooey in the middle -- constant rotation of the stick helps. I also find it best to leave the chocolate resting on the graham cracker next to the fire while I toast my marshmallow so that the chocolate will start to melt as well. I know, I know. It's overwhelming to get both gourmet outdoor cooking tips AND real estate updates at the same time. ;-) Finally, as we all look towards 2022, if you are contemplating a home purchase or a home sale in the New Year, let's find a time to talk further about your plans. You can reach me via phone/text at 540-578-0102 or by email here. | |
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Strong Contract Activity In Local Housing Market, Again, In November |
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 Another month -- lots more contracts. 120 buyers (and sellers) signed contracts to buy (and sell) homes in Harrisonburg and Rockingham County during November 2021. One might have thought it would have been a slow month for contracts, but not so. This puts it in the 120-139 range, along with January, June, July and September. In the past year, the two slowest months for contracts being signed were December and February. Perhaps this December will follow suit and also will be slow -- or maybe it will be another unexpectedly strong month of contract activity. | |
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More Homes Are Selling, Faster, At Ever Higher Prices |
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 Happy, Chilly November morning, Friends! This month's market report is brought to you by... turkey, stuffing, cranberry sauce, sweet potato casserole, carrot souffle, corn casserole, mashed potatoes and gravy...  Thanksgiving is my favorite meal of the year because of all of the delicious foods offered all at once. This year, my family humored me... and spoiled me... by making me a full Thanksgiving meal for my birthday at the end of October! :-) So, for everyone who hasn't had a full Thanksgiving meal for 11.5 months now, I can tell you from personal, recent, experience, you're in for a treat... nine days and counting! ;-) Speaking of Thanksgiving, there is much in my life for which I am immensely grateful -- my family, friends, health, a job I enjoy, my clients, and much more -- and I hope you are finding much in your life for which you are also thankful this year. I also hope you are able to spend some time this Thanksgiving with family and friends and enjoy a bit of downtime amidst what has been a hectic and stressful year for many. But, enough talking turkey, back to the main course -- the local housing market. ;-) The photo on the cover of my market report is a lovely, updated house on Garbers Church Road, which you can check out here, and you can download a PDF of all of the charts and graphs from my market report here. Now, let's start stuffing our faces with some of the latest stats...  OK, quite a few highlighted items here... [1] We have seen 1,384 home sales thus far in 2021 which is almost 14% more than we saw last year during the same timeframe. The market continues to be red hot with lots of homes selling -- more than any recent year! [2] The median sales price has risen 11.25% in the past year. One year ago, the median sales price (for 2020) was $242,000. Now, that median sales price is $269,225. That is an increase of more than $25,000 in a single year! [3] The time it takes for homes to sell has been cut in half in the past year. A year ago the median days on market was 10 days, and this year it is only five days. That is to say that half of homes are going under contract in five or fewer days! Let's break it down, now, between detached homes and attached homes. Attached homes are duplexes, townhomes and condos...  The green charts, above, are detached homes and the orange charts are attached homes, and here's what I'm noticing... [1] We have seen 10% more detached home sales this year -- an increase from 846 sales up to 933 sales. [2] The median sales price of these detached homes has risen 9.5%, from $264,900 up to $290,000. We are now pretty close to a $300,000 median sales price for detached homes in our area. Wow! [3] We have seen even more of an increase in the pace of sales of attached homes, with a 22% increase in those sales from 369 sales last year to 451 sales this year. [4] The median sales price of attached homes has risen even more than detached homes, with a 17% increase from $192,900 up to $225,000. So, many more sales this year than last, and higher prices! It's been a busy year for buyers and sellers in the local housing market. Breaking it down month by month, here's what we're finding...  It's been a bit of a roller coaster ride in the second half of this year... JUN: highest month of sales in many years JUL: slower sales than last year AUG: highest month of sales, by far, in many years SEP: slower sales than last year But, the market is back in full force in October, with the... highest month of sales in many years. :-) We are likely to see a slow decline in monthly home sales in November and December as is typical most years -- but then again, maybe I'll be surprised yet again! If we do stay on track with a relatively solid November and December, here's what that might look like...  As you can see, with only ten months of sales thus far in 2021 we have already eclipsed the total number of sales in 2017, 2018 and 2019. We may very well rise above 2020 just with the addition of November sales, and when 2021 is completely in the books, perhaps we'll get all the way up to 1,600 home sales! Here's an another visualization of how we made our way to this pace of home sales...  Yeah, that orange line. The orange line is showing the annual pace of home sales in Harrisonburg and Rockingham County. The annual pace of sales slowed in mid 2020 due to Covid -- that's the multi month dip on the left side of the graph. But when Fall 2020 came into view, the pace of buying activity took off like a rocket and has not slowed down much since. The annualized pace of home sales has actually been over 1,600 for five months in a row now, which is a relatively good indicator that we'll see a total of 1,600 home sales in 2021. Will the pace of home buying activity slow in 2022? I don't think that it will. I believe there is a good bit of unmet buyer demand that has built up in our local market over the past five years. I think there are plenty of would be home buyers that are just waiting on resale homes, or newly constructed homes, to be available so that they can buy a home. Assuming we continue to see growth in new construction options, and assuming mortgage interest rates don't rise dramatically, I think we are likely to continue to see an annualized pace of 1,600+ home sales as we work our way into and through 2022. And what about home prices...  Between 2011 and 2019 the average increase in the median sales price of detached homes was 3.4% per year. Over the past two years (2020, 2021) the average annual increase in the median sales price of detached homes was... 10%. So, clearly, home values are increasing much faster now than they were for most of the past decade. Looking ahead, what will we see next. I believe we will soon (2022) or eventually (2023) see that annual increase return to that longer term norm of three to four percent. I am not thinking, at this point, that we will see sales prices drop -- but I don't think we will continue to see those prices increase as fast as they have for the past two years. Looking ahead at what closed sales might be in the next two months requires looking backwards at what we've seen in the way of contract activity over the past few months...  As noted by the red and green arrows above the last five months above... [1] In June, July, August and September of 2021 we saw fewer contracts being signed than in the same month in 2022. [2] In October 2021 we saw more contracts being signed than in October 2021. [3] In the total of those five months there were 762 contracts in 2020 and only 688 contracts in 2021. So, contract activity might be (?) slowing a bit, which means home sales activity might (?) slow a bit as we finish out 2021 and roll into 2022. Stay tuned as I continue to track this over time. Here's a bit of a confusing graph, at first glance...  This graph, above, shows the number of homes on the market at any given time, measured monthly. Inventory levels have been dropping for many years now -- but home sales have been increasing during that same timeframe. Confusing, right? Here's the skinny... [1] More homes have been listed over the past year than the previous year. [2] Homes have sold much more quickly this year than last. [3] As a result, the number of homes on the market at any given time has dropped over the past year. Maybe that's clear, maybe not. As with all of this data and these graphs, just ask if you have a question! As per #2 above, homes are selling rather quickly...  A few things we can pick up from the graph above... [1] As scribbled on the chart, four out of five homes are going under contract within 30 days. [2] Narrowing the focus a bit, we can note at the bottom that per the median of five days, at least half of the homes that have sold in the past year have been under contract within five days of being listed for sale. Here's an even more interesting visualization of how quickly homes are going under contract in Harrisonburg and Rockingham County these days...  This graph takes a look at the median days on market of all residential sales in Harrisonburg and Rockingham County in a year's time. This shows the speed of home sales in our marketplace and that speed has been steadily increasing over the past 18+ months. Alright, that brings my monthly overview of our local real estate market to a close for now. As noted throughout... more homes are selling, more quickly, at ever higher prices. It is not clear when these trends will slow down, stop or reverse themselves, but for now, the local market keeps on moving steadily ahead. If you made it through reading the entire overview of my market report, kudos to you, and you can consider yourself to be well informed on the latest local market trends. You are now dismissed from class to go daydream about your favorite foods you will devour on Thanksgiving day. As we continue through November, I hope your Thanksgiving season is one full of plenty of relaxation, delicious food, and enjoyable time with family and friends. Looking ahead, if you hope to buy a home or sell a home yet this year, or in early 2022, let's chat sooner rather than later to prepare you for entering into this fast pace local housing market. You can reach me via phone/text at 540-578-0102 or by email here. Happy Thanksgiving! :-) | |
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Is The Local Housing Market Starting To Cool Off? |
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 Several local agents have recently said, conversationally, that they think the local housing market is starting to cool off. Is it? Maybe yes and no, depending on what you mean, and how you measure it? ;-) No - After only seeing 148 home sales in September 2021, there were even more (158) in October 2021! No - After seeing only 125 contracts signed in September 2021, there were 156 contracts signed in October 2021! Yes - It took a median of five days for homes to go under contract in September 2021 and a median of six days in October 2021. Slower. Much slower. By a day. Gasp! Maybe - Six to twelve months ago it was not uncommon to have 2, 5 or 10 offers on a house within 48 hours of the property hitting the market. Now, I'm often, but not always, seeing fewer offers within the first few days. This is definitely anecdotal, not based on data. So, is the market cooling?
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Home Sales Up 15%, Prices Up 12% In 2021 Despite Slightly Slower September Sales |
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 Happy Tuesday Morning, Friends! I hope October is treating you well and that you are enjoying the cooler temperatures as much as I am. Earlier this month I had a great time picking apples at Showalter's Orchard in Timberville for the very first time. I brought home plenty of apples and some of their delicious apple cider. I had high hopes of baking some of those apples into a crisp... probably to be enjoyed with some vanilla ice cream and caramel sauce... Delicious! Alas, thus far those delicious, crisp, apples have only been enjoyed with a side of peanut butter -- but maybe I'll break out the apple crisp recipe yet this week. I hope you are enjoying some delicious flavors of fall yourself, and perhaps you'll consider a visit to Showalter's Orchard...  But moving past delicious, freshly grown, hand picked apples... and the desserts they might produce... let's explore the latest numbers from our local housing market for a bit. As always, you download a PDF of all of the charts and graphs here or, if you are intrigued by the beautiful house in Fairway Hills that graces the cover of my market report this month, check it out here. Now, let's break down the stats...  From a big picture perspective, here's what jumps out to me above... [1] Home sales were a bit slower this September (143) than last September (159). [2] Despite a slightly slower September, we've seen 15% more home sales thus far in 2021 than during the same time period in 2020! [3] When looking at a full year (12 months) of data there has been a 21% increase in the number of homes selling, annually, in Harrisonburg and Rockingham County. That is a significant surge! [4] The median sales price thus far in 2021 is $269,675 which is 12% higher than it was a year ago when it was only $241,000. This is a large increase in median sales prices in just a year. [5] Homes were selling fast a year ago. They are selling faster now. Median days on market has dropped 55% from 11 days to five days over the past year. When we break things down between detached homes and attached homes we can learn a bit more about what is happening in our local market. An attached home is a duplex, townhouse or condo...  The green sections above are tracking the sales of detached homes where we find... [1] There have been 17% more detached home sales (1,124) in the past 12 months as compared to the prior 12 months (957). [2] The median sales price of detached homes has increased 12% over the past year, from $257,500 to $288,775. That is an increase of more than $30,000 in a single year. The orange sections above are tracking the sales of attached homes where we find... [3] There was a much larger, 29%, increase in the sales of detached homes over the past year. The annual pace of these detached home sales increased from 409/year up to 526/year. [4] The median sales price of these detached homes has increased 15%, from $189,900 up to $217,650. I mentioned earlier that home sales slowed down in September -- but maybe partially because August was bonkers?  As shown above, September 2021 fell short (143 sales) of September 2020... but... [1] Don't forget about August! There were an astonishingly high number of home sales (184) in August 2021, and if we combine August and September we find that there were 292 home sales during those two months last year, compared to 327 this year. [2] The last four months of 2020 were abnormally active because many home sales that would have likely taken place in the first half of 2020 were pushed into the second half of 2020 because of Covid. As such, looking towards the remainder of the year, I would not be surprised if 2021 continues to under perform as compared to 2020. Now, let's stack all of those months up to see how 2021 compares to past years...  Remarkably, the home sales in the first nine months of 2021 was more than in the first ten months of 2020 and more than the first eleven months of 2018 and 2019! So, we can take a month off, right? We could have no home sales in October and we'd still be outperforming last year! Alas, it doesn't seem like home sales will be taking a break in October. But as for predicting future sales activity, the best bet is to look at recent contract activity...  The most recent four months of contract activity (Jun-Sep) have definitely been slower than the contract activity we saw a year ago. There have been a total of 534 contracts signed between June 1 and September 30 this year -- as compared to 617 contracts signed during the same timeframe last year. This likely means we'll see somewhat fewer home sales over the next few months. This next graph won't surprise you as you've likely heard about the extremely low inventory of available homes in this area...  As I have mentioned before, this graph can be a bit misleading. Some might understand it to mean that there are fewer and fewer homes for sale and thus fewer and fewer homes are selling. But, in fact, we have seen 21% more home sales in the past 12 months as compared to the prior 12 months -- so what's the story? The second half of my comment above "at any given time" is the key to unlocking this mystery. Homes are selling (going under contract) quickly, and thus the number of homes on the market at any given time is continuing to stay low. That doesn't mean that there aren't homes on the market to buy -- there are, or were -- but most will go under contract and not be available for any more than a few days. So, as a buyer, be prepared to act quickly, likely compete with other buyers, and possibly have to wait a bit to find the right opportunity. Interestingly, the changes in inventory levels haven't affected all property types in the same way...  The blue line above is showing changes in the number of detached homes on the market at any given time. You'll note that these inventory levels have dropped quite a bit over the past two years. The red line, showing attached homes) has been very low and remained very low for quite some time now. Neither property type is likely to meaningfully increase until and unless we see a significant amount of new construction to help offset high buyer demand.  This graph is a new one, but I think an important one for keeping an eye on the mood of the market. Days on market, as shown above, measures how quickly homes are going under contract. Independent of how many homes are selling and the prices at which they are selling -- if they are going under contract quickly then the market is strong and power is tipped towards sellers -- and if homes are taking a longer time to go under contract the market is not quite as strong and power is starting to balance out between sellers and buyers. Over the past three years we have seen a steady decline in how long it takes homes to go under contract, with a current median of five days on the market. I'll continue to monitor this "days on the market" metric over time to see if things are cooling off at all in our local market. That doesn't seem to be happening yet. :-) You might have heard that mortgage interest rates are increasing, but...  I have read quite a few headlines lately about how rising interest rates are certain to dampen home buyer enthusiasm. If I had a dollar for every time someone told me (or I told you) that interest rates were going to rise over the past seven (+) years... Mortgage interest rates were around 3.5% a year and a half ago, and around 3% a year ago, and are around 3% now. So, are interest rates rising? Sure, a bit, depending on when you pick as the "then" to compare to the "now" but they are still very (very!) low. Alrighty then! That brings my monthly deep dive into our housing market statistics to a close, for now. As usual... If you are thinking of selling your house this fall or winter, let's talk sooner rather than later about timing, pricing, preparations and more. If you're thinking of buying this fall or winter, start looking now, because there aren't many houses on the market, so we'll likely need to patiently wait for the right opportunity to come along and then jump on it, quickly! Have a great remainder of the week, and if you visit Showalter's Orchard and subsequently make apple crisp, text me a photo to make me jealous... or invite me over to sample it... I'll bring the ice cream and caramel sauce! ;-) | |
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Harrisonburg Area High End Home Sales Booming In 2021 |
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 Only 7% of local home buyers spend $500K or more on their home purchase (per sales data over the past 12 months) but this segment of the local housing market has been strong over the past few years. As shown above, there were 76 home sales over $500K last year - which was wellmore than any time in the past decade. This year we have already exceeded that pace of $500K+ home sales even with just the first ninemonths of the year. There have already been 85 home sales over $500K up through October 4, 2020 and there is still time for a more before the end of the year.  We also saw a big jump in the number of home sales over $600K last year Last year was an extraordinarily strong year for home sales over $600K - with 38 such sales - well more than in any other year in the past decade. This year -- we're seeing even more $600K+ home sales, with 43 thus far and still three months to go! Let's keep narrowing our focus, now to sales over $700K...  The number of $700K home sales a year was averaging four sales per year between 2016 and 2018 and then more than tripled in 2019 to 14 sales, followed by another 15 sales in 2020. But this year -- wow! The number of home sales over $700K looks like it will likely double this year as we have already seen 26 such home sales in the first nine months of 2021! And... one more time... let's look at even more expensive homes...  This one surprised me. Well, most of the graphs did, but this one particularly. Before 2019 we were seeing around two sales a year over $800K. In 2019 and 2020 that jumped up to 7 (2019) and 5 (2020) -- but this year -- we have already seen 16 buyers pay over $800K for homes in Harrisonburg and Rockingham County! So -- overall, the high end home sales market is doing extremely well as compared to performance in past years! If you are thinking of selling your high end home (over $500K, $600K, $700K or even $800K) this might be the time to do so! | |
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The Speed Of Home Sales (Days On Market) Is Likely The Best Indication Of The Mood Of The Market |
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 The number of homes that sell in a given timeframe is somewhat indicative of the strength of the local housing market - but not necessarily. The number of homes selling in a given timeframe is affected not only by how many buyers want to buy -- but also how many sellers are willing to sell. The median price of homes that sell in a given timeframe is a somewhat better indication of the strength of the local housing market - but it is somewhat slow to respond to changes in the market. Even if (when?) the market starts cooling off, we're not likely to see an immediate impact in the sales price of homes. But days on market -- how quickly homes are going under contract -- that can be an excellent indication of the mood of the local housing market. Independent of how many homes are selling and the prices at which they are selling -- if they are going under contract QUICKLY the market is strong and power is tipped towards sellers -- and if homes are taking a longer time to go under contract the market is not quite as strong and power is starting to balance out between sellers and buyers. The graph above shows the median days on market (the number of days it takes for a home to go under contract once it hits the market) measured each month by looking at the 12 months leading up to and including that month. So, for example...
Looking at the graph, we can notice a few things...
Some cynics might say -- but Scott, this is looking at a year's worth of data, so it will take months and months to see any changes that are actually happening in the here and now. This is a fair point -- if things are slowing down over the course of a month or two, it might take several more months after that for us to start to see this trend line change. I do, however, intentionally look at this data with a 12 month timeframe. Looking at it with a shorter timeframe makes the data jump up and down a bit more and makes it harder to recognize any trends that are likely to actually be sustained over time. But, for those who are curious about the most recent of recent data -- when I look at sales from the past two and a half months (7/1/2021-9/20/201) I find that the median days on market is... still five days. :-) So -- the market is strong, and buyers are moving quickly on new listings, and we're not really seeing that change yet -- but as you'd expect, I'll continue to monitor this trend over time. | |
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Putting The Pace of August 2021 Home Sales In Context |
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 I knew August 2021 was a busy month of home sales in our local market -- Harrisonburg and Rockingham County. I didn't know HOW busy when put in the context of past years. Looking back a bit -- 10 years -- it seems that the 176 home sales that took place in August 2021 was the highest number of home sales seen in any month over the past 10 years! Runner Up = June 2021 with 174 home sales (yes, two months ago) Third Place = June 2018 with 174 home sales What, oh what, shall September... and October... bring in our local housing market!? | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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