Analysis
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13% More Contracts Signed This Year than Last |
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![]() It has been a busy few months for home buyers in Harrisonburg and Rockingham County. During the first four months of this year, 510 contracts have been signed for residential properties. This is 13% higher than the number of contracts during the first four months of last year. Some might find this increase in contract activity surprising as inventory has been extremely low all year but this statistic shows that even though there are not many homes on the market at any given time, there have enough new listings coming on the market for more buyers to contract on homes this year than last during this timeframe. If I had to guess how many offers were written in the first four months of this year versus last, here are the make-believe statistics I would come up with...
There are a tremendous amount of buyers attempting to buy homes right now which results in many of them finding themselves making offers on multiple houses before they finally are the winning buyer on a particular house. It will be interesting to see how the next few months ago but at this point I suspect we will continue to see strong contract activity through the summer of 2021. | |
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Home Sales Soar In First Quarter of 2021 in Harrisonburg, Rockingham County |
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![]() Happy not-really-tax-day, friends! (taxes are due May 17 this year) What a wild first three months of the year it has been thus far in the Harrisonburg and Rockingham County real estate market! Before starting to pick through the data to find some meaningful insights, here are a few general notes for you...
Now, let's dive right into the data and see what we can learn about our local housing market... ![]() OK, some of these numbers (above) are just bonkers...
Now, then, let's take a look at a break down of detached homes (single family homes) and attached homes (duplexes, townhomes, condos)... ![]() A few things to note when we look at this data sliced a bit differently than in the first data table... [ 1 & 3 ] While sales of detached homes increased 7% over the past year compared to the prior year, sales of attached homes increased 26% during that same timeframe. [ 2 & 4 ] The median sales price of detached homes increased 12% over the past year which is just slightly higher than the 10% increase in the median sales price of attached homes. Chopping the data up one more time by City vs. County we can note some differences as to how these two portions of our local market are performing... ![]() The data above is just looking at where we are seeing home sales increase and by how much. Over the past year there has been a 3% increase in the number of homes selling in the City -- while there has been a 16% increase in the number of homes selling in the County. I believe this is primarily because the majority of new construction is now happening in the County -- thus those sales numbers have more of an ability to grow as compared to the City numbers where most home sales are resales. OK, next, let's visually contextualize that exciting month of March... ![]() Indeed, March was a BUSY month of home sales in Harrisonburg and Rockingham County. While I am only showing three years of data above, the file I'm working in when I create these reports includes data all the way back to 2003 when I started in real estate. There has never, in that time, been a month of March where we have had 137 or more home sales in Harrisonburg and Rockingham County! Given contract data (we'll look at that a bit later) it seems likely that we will see another strong month of sales in April and May, which means the year is likely shaping up to be a year of a LOT of home sales. Which leads me to... ![]() I put this graph together by stacking each month of home sales on top of the prior to see how each new year stacks up in comparison to past years. As you can see, above, this year (2021) is currently poised to be the best year ever as far as the number of properties selling in Harrisonburg and Rockingham County. So, lots of homes selling, how did we get here? ![]() We didn't get here (1500+ home sales) without some turbulence. A year ago we had seen a slow and steady increase from 1300 sales/year up to 1350 sales/year. Then the COVID dip and then the COVID spike! Looking back, we had a five month period with far fewer home sales than we would have expected given our overall trajectory. And now, we are in the fourth month of what a much (much!) more active market than we would have expected given our overall trajectory. Now, you might find yourself saying that things have been crazy for MUCH longer than four months. Yes, you are right. The graph above is looking at a rolling 12 months of home sales, which evens out some of the peaks and valleys of home sale seasonality, but also can mean it takes longer for overall trends to appear. And yes, I know you probably didn't need a graph to tell you that a lot of homes are selling these days... but this graph made me realize that these two conflicting realities are being experienced daily in our local market...
But I digress. Lots of homes have been selling. What is to come over the next few months? ![]() Well, based on a STRONG month of contract activity in March (143 contracts) it would seem that we'll continue to have strong months of home sales in the coming month or two. Furthermore, we're entering into what is typically one of the busiest seasons for buyers to be buying homes, so I expect contracts and closed sales to continue to stay at higher levels for the next five or six months, at least! And now, I think I mentioned (or you may have heard) that there aren't many homes for sale right now... ![]() Yes, it is true. Even though we are seeing an ever increasing number of homes selling, we are also seeing an ever declining number of available listings. As I recently commented to a client, if we start the month with low inventory and 5,000 homes are listed for sale and 5,000 homes go under contract, we will still end the month with low inventory. As such, understand low inventory fully by remembering that...
Finally, just one more graph for your perusal... ![]() This graph shows trends in the average 30 year fixed rate mortgage interest rate and there are a few things to note here as well...
Alright, that's all I have for you at this point. You are now up to speed on the latest news and developments in our local housing market. But if you are thinking about buying or selling sometime soon, these general market trends are only part of what you want (and need to know) as you also should dig into the market in which you are hoping to buy or sell -- whether that is best defined by price range, location, property type, etc. If I can be of help to you as you make plans to list your home for sale, or to seek a home to purchase, just let me know. I'd be happy to meet with you in person, via Zoom, or to chat by phone to help you think and talk through the possibilities. You can reach me at scott@hhtdy.com or via phone/text at 540-578-0102. Until we chat, or until I write again, here a few final tips... Sellers - Even though the market is hot, you still need to prepare your home well, price it appropriately based on historical sales data and market it thoroughly and professionally. Buyers - Get prequalified for a mortgage, start stalking new listings, go see them on the first day they hit the market, and get ready to compete in a multiple offer situation. Seller / Buyers - If you need to (or want to) sell in order to buy, this will require a bit more strategery than normal. It can be done, but we need a solid plan in place from the start. | |
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Is My Home Value The Same As The Tax Assessment Or Zestimate? |
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![]() Which one of the values above is the "market value" of the imaginary home in question? The answer is -- the GREEN bar -- a home's value is most often determined by how much other buyers have recently paid for similar properties. A would-be buyer might WANT the home's value to be the "tax assessed value" -- but that might be quite a bit lower than the recent sales prices -- so a home's tax assessed value is not necessarily the home's market value. A would-be seller might WANT the home's value to be the "Zestimate" from Zillow -- but that might (often, usually) vary quite a bit from a home's market value -- so a home's Zestimate is not necessarily the home's market value. A would-be seller might REALLY WANT the home's value to be the same as the list price on competing properties currently for sale -- but those listings might sit on the market forever with unreasonably high list prices -- so the list price of competing listings is not necessarily the home's market value. Now, this scenario would be much easier... ![]() As you can see here, there isn't too much of a difference between the different values -- so it matters a bit less which of the value perspectives we use when estimating a likely sales price and planning for a potential list price. But in the case where there is quite a bit of separation in these different value perspectives -- stay focused on what other buyers have recently paid for similar properties -- this alone is your best guide as to what you can/should expect the next buyer to be willing to pay for your house. | |
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The Harrisonburg Area Real Estate Market Is As Strong As Ever Two Months Into 2021! |
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![]() Happy Thursday morning to you! It's been a busy week on my end, what with St. Patrick's Day yesterday, and my daughter's 13th birthday the day before (Happy Birthday Emily!) so forgive me for the slight delay in getting the news to you that... The Harrisonburg Area Real Estate Market Is As Strong As Ever Two Months Into 2021! Before I dive into the data below, a few quick links...
Now, on to the data... ![]() As shown above, with St. Patrick's Day green numbers for ya, you'll note that...
So -- more home sales, at higher prices, selling more quickly! Sounds like a good time to be a seller and a bit less exciting of a time to be a buyer! What might develop as we finish out March? ![]() You might notice that the 77 home sales seen in February 2021 was higher than last February (63) but was not the strongest recent month of February home sales. There were 81 home sales back in February 2018. Looking ahead to March, will we see more than 110 home sales close? It seems quite possible! Here's the data stacked up a bit differently... ![]() As shown above, the January + February sales pace during 2021 of 182 home sales is the fastest start we've seen in the past several years. This is a good indication (though not a guarantee) that a relatively strong year of home sales lies ahead of us. You've seen a version of this graph below, but it surprises me again every time I see it... ![]() The orange line (above) is tracking the number of home sales per year -- measured each month. Throughout 2019 and into the beginning of 2020 this was steadily increasing, from just below 1300 to nearly 1400. Then, Covid hit -- and within a few months the annual pace of home sales had dropped back down to 1300 sales per year. That's the downward dip shown above. Then, as we made it into the summer and fall (and winter) of 2020, the pace of home sales picked up incredible momentum, and accelerated beyond where we might have expected it to have been otherwise -- as shown with the dashed red line. All the while, the median sales price just kept on climbing, up to its current level of $247,700 as compared to $222,150 a year ago. So, Covid dealt us two surprises -- a rapid slow down and then a fast and furious rebound! ![]() As noted previously, sales prices are on the rise. The median sales price of all detached homes (not duplexes, townhouses or condos) sold in Harrisonburg and Rockingham County (via the HRAR MLS) rose 12% in 2020 -- from $240,000 up to $269,000. If you bought a home in the past year, you likely paid 5% to 15% more than you would have a year prior. Not as fun for you as a buyer -- though the seller on the other end of your purchase transaction likely thoroughly enjoyed that increase! Looking ahead, again... ![]() While we have seen a significant increase in the annual pace of contracts being signed (1364/year up to 1548/year) the number of contracts signed in February did actually drop off a bit from last year. Admittedly, the January 2021 contracts helped keep the Jan/Feb numbers higher this year than last, but this February did have a bit slower pace of contract signing than I expected. Maybe this smaller number of contracts has something to do with inventory levels?? ![]() A year-ish ago I thought it was quite something that we had broken through the 200 mark -- and all of a sudden we were in the 190's as far as the number of homes for sale in all of Harrisonburg and Rockingham County. But now -- we might break through the 100 mark?? A month ago there were 107 homes for sale -- now 106. Please, let's keep it to triple digits -- let's not get down to only 95 or 97 homes for sale!? One of the reasons buyers haven't minded (too terribly) that they were paying higher prices for homes over the past year was because mortgage interest rates were soooooo low... ![]() But now, yes, mortgage interest rates are starting to rise a bit. It doesn't seem likely that they will rise dramatically through 2021, but the lows of being below 2.75% might be (??) behind us for good. OK -- I'll wrap it up there for now. A bit less than a month from now I'll send you another update on where we are a full quarter of the way through the year. My how time flies! Until then... Sellers - Even though the market is hot, you still need to prepare your home well, price it appropriately based on historical sales data and market it thoroughly and professionally. Buyers - Get prequalified for a mortgage, start stalking new listings, go see them on the first day they hit the market, and get ready to compete in a multiple offer situation. Seller / Buyers - If you need to (or want to) sell in order to buy, this will require a bit more strategery :-) than normal. It can be done, but we need a solid plan in place from the start. | |
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Are Home Prices Only Going Up Because Mortgage Interest Rates Are Going Down? |
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![]() Disclaimer: I am not an economist. I don't play an economist on TV. Or on this blog. Feedback from actual economists, or accountants, or financial analysts, or wise guys is welcome: scott@hhtdy.com So, are home prices going up because mortgage interest rates are going down? Maybe yes AND no? Yes...
No...
So What...
Why...
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Why Did So Many Homes Sell In Our Area In 2020? |
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![]() As shown above, the annual pace of home sales took a nose dive in April 2020 related to COVID, but has taken off since August 2020 and quickly accelerated the market to a pace of almost 1,500 home sales per year. Why is this happening? Here are some of my best guesses... Pre-COVID, most of us likely spent the minority of our waking hours in our homes. We would be at work much of the time. During COVID, many folks find themselves spending 90% or more of their waking hours in their homes. For many people, this made them quickly realize that their home was no longer working for their needs or those of their family. If you're working from home and your kids are learning from home, you suddenly have higher expectations for the space and spaces that your home offers. I suspect this "being at home much more than normal" dynamic caused more people to decide to sell their home and buy a new home during 2020. Mortgage interest rates have been dropping throughout most of 2020, making it an excellent time to buy a home from a monthly mortgage payment perspective. These lower rates likely made it pretty easy for the "my home doesn't work during COVID" buyers to consider upgrading to a new home. There is an extraordinary amount of pent up buyer demand in our area. Perhaps more sellers than usual listed their homes in the second half of the year, most of which were scarfed right up by eager buyers, thus leading to higher than normal home sales. This also seems to have lead to higher sales prices! What do they say? The whole is greater than the sum of its parts? It seems that... more buyers wanting to upgrade to a new home + super low interest rates + pent up buyer demand + quickly rising home prices = a red hot real estate market in 2020! As one other aside, it is also possible that we may have seen more second home purchases in 2020 than in other comparable years. More and more people found they could work from home, or from out of town, and this likely drove at least some number of new buyers of second homes into our market. | |
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Home Sales Up, Prices Up, Inventory Down in January 2021 |
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![]() Happy Wintry Monday Morning, friends! It looks like it might be a touch above freezing temperatures today, so perhaps some of the lingering snow and ice and will start to melt today. This has been one of the coldest and snowiest and iciest months of January / February that I can remember anytime recently in the Harrisonburg area! As a preview of where we're headed in this overview of the local real estate market:
So, no huge surprises. It seems the 2021 housing market is trying to keep the momentum going from 2020. Read on for a recap of what is happening in our local housing market or:
Now, onto the data and some pretty charts and graphs... ![]() A few observations from the overview data presented above...
Now, I was telling you that January was a bit unusual, even though it was a repeat of last January, right? Let's take a look... ![]() Indeed, the 100 home sales we saw in January 2021 was merely a repeat of January 2020 -- boring! ;-) -- but that is many more home sales than we typically see in January. We usually see 60 to 70 home sales in the month of January. Last year's super strong month of 100 home sales was followed by a super slow month of only 63 home sales in February. Stay tuned to find out whether home sales will again quickly slide downward in February, or will remain strong. Keep reading to see how many people signed contracts in January, which might be at least some indication of what we'll see as far as February sales. Looking for a big picture graph that summarizes what has been happening in our local housing market over the past year? It's this funny looking one... ![]() Starting with the bottom, orange, line -- this is showing the number of home sales per year for each of the past 12+ months. You'll note that the annual pace of home sales took a nose dive last year between April and August, which are usually the strongest months of the year for home sales. But then, home sales took off quickly in the fall and continued to accelerate into winter, leading to huge rebound in the pace of home sales in our area. This seems to mostly be able to be attributed to COVID. There was a lot of uncertainty in the market in March, April, May, etc. which slowed down home sales, but then as people realized that the housing market wasn't falling apart AND they realized that their homes weren't working as well for them when they were in them 95% of the time (thanks, COVID) AND they realized that super low interest rates made it a compelling time to upgrade their home, we saw home sales take off quickly! The top, green line, then is the median sales price. We have been seeing steadily increasing sales prices in our local area for the past few years and those prices kept marching upward quickly in 2020. The annualized median sales price at the end of January 2021 was $246,500 -- a significant increase above a year ago when it was $223,500. So, remember that I mentioned that January contracts might give us an idea of what to expect for February sales? Let's take a look... ![]() It seems January wasn't just a busy month of closings - it was also a busy month for buyers (and sellers) signing contracts to buy (and sell) homes. There were 95 contracts signed in January 2020, and 123 in January 2021! As such, it seems likely that February (and March) will be busy months for closed home sales. What's it like buying a home these days? It can be a bit challenging, and stressful, mostly because of the very (very, very) low inventory levels at any given point... ![]() A year ago, a buyer would have been choosing from 196 homes on the market in Harrisonburg and Rockingham County. Today, there are only 107 homes on the market for sale!?! This huge (46%) decline in inventory levels means that a buyer doesn't have a whole lot of options at any given moment in time. Now, that's not to say that they don't have options at all -- they do. If we see 1400 home sales over the next 12 months it will be because around 1400 homes will be listed for sale. So, there will be plenty of options of what a buyer might buy -- but if recent market dynamics continue through 2021, most of those new listings will go under contract quickly (median of eight days on the market) which will keep the inventory levels quite low! Finally, those interest rates. Yes, they are still low... ![]() Some part of what fueled the wild real estate market in 2020 was super low mortgage interest rates. As shown above, the average 30 year fixed mortgage interest rate has been below 3% for over six months now. This has kept monthly housing prices affordable for buyers amidst rising prices and has also allowed plenty of folks to refinance and see cost savings on a monthly basis. So there we have it. We're a month (ok, really a month and a half) into 2021 and thus far we're seeing a continuation of the strong local housing market that we saw in 2020. Generally speaking that means it will be pretty fun to be a seller, pretty challenging to be a buyer, and you'll get to experience the full range of emotions of you are selling AND buying! If you are making plans for selling or buying in spring 2021... Sellers - Even though the market is hot, you still need to prepare your home well, price it appropriately based on historical sales data and market it thoroughly and professionally. Buyers - Get prequalified for a mortgage, start stalking new listings, go see them on the first day they hit the market, and get ready to compete in a multiple offer situation. Seller / Buyers - If you need to (or want to) sell in order to buy, this will require a bit more strategery :-) than normal. It can be done, but we need a solid plan in place from the start. If I can be of help to you as you start to think about the possibility of making a move, selling your home, buying a new one, etc. -- just let me know. I'd be happy to meet with you in person, via Zoom, or to chat by phone to help you think and talk through the possibilities. You can reach me at scott@hhtdy.com or via phone/text at 540-578-0102. Enjoy the second half of February, and we'll check in again in early March! | |
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Did City Home Prices Really Drop For The First Time Since Spring 2019? |
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![]() Today's edition of the Daily News Record leads with a story about home prices dropping in the City of Harrisonburg. The headline and much of the article might cause you to misunderstand the bigger picture of what is going on with City home prices. After all, most people would read that and say "oh, City home prices have fallen" when I think most people would come to a different conclusion when examining the actual data and/or if trying to buy a home in the City right now. :-) Let's dig in... The article states that the "median sales price dropped from $214,400 in the fourth quarter of 2019 to $205,200 in the fourth quarter of 2020, a difference of 4%" which is from data provided by the Harrisonburg Rockingham Association of Realtors. Here's the problem... The City is sufficiently small such that there aren't many home sales per quarter (only 116 in 2020-Q4) and thus the data can lead you to the wrong conclusions if you are looking at too small of a data set. When looking at just one quarter of data...
Oh my, home prices are falling, right? But let's look to see what happens when you expand the data set to include a longer time period to avoid improper conclusions drawn from smaller data sets...
Are home prices falling? It seems they have actually risen 11% over the past year. The graph above attempts to offer a slightly clearer picture of home prices. It shows the median sales price over a 12 month period for each of the past (10) quarters. You'll note that the median sales price has been steadily increasing over the past several years. Did it tick downward slightly in 2020 Q4? Yes. By $950. Could it decline further as we get through 2021 Q1 and 2021 Q2? Yes, certainly. Anything is possible. Is it accurate to say that City home prices dropped in 2020 Q4? I guess? Technically? But that seems to be focusing in pretty narrowly and missing the larger picture. But you tell me -- what does the data say to you? | |
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January Housing Inventory Levels Sink To New Lows |
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![]() We like somethings to be low - like mortgage interest rates. But inventory levels - it really isn't ideal for them to be this low - except for sellers, I suppose. For each of the past five years, home buyers in our local market have found themselves worse off as far as having options for houses to buy in Harrisonburg and Rockingham County. Today, buyers are choosing from 117 homes for sale in the entire City and County. Ouch! Just a year ago, that was 195 homes, two years ago 269 homes, oh -- and can you imagine having 500+ homes to choose from such as back in 2016!? Here's hoping for a flurry of homes coming on the market in February and March to help meet the apparently never ending surge of buyer demand! | |
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Will Buyer Activity Continue Full Strength In January? |
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![]() As shown above, the past three months (October, November and December) were absolutely bonkers as far as contract activity in Harrisonburg and Rockingham County. We saw far more contracts being signed than is typical for those months of the year. If we average the number of contracts seen in the fourth quarter of 2018 and 2019 we might have thought we would have seen 310 contracts signed in the fourth quarter of 2020. Instead, there were 435 contracts signed! So, how will things turn out in January? So far -- it seems buyer activity will continue to be strong in January 2021. There were 75 contracts signed between January 1 and January 20 which points to a projected total of 116 contracts potentially being signed during the full month of January, which would -- again -- surpass normal market activity for the month of January. Stay tuned to see how long this strong wave of buyer activity will continue... | |
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Maybe Some Townhouse Developments Have Fewer Homeowners (Living In Those Townhouses) Than I Thought |
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![]() Before I look at any given set of real estate data, I usually have some sort of an idea in my head of what the data is likely going to indicate. I'm not always exactly right in my guess as to what I'll find when digging into the data - but I'm usually not overly surprised. A fellow agent asked me a few weeks ago about how many townhouses in Taylor Spring I thought were owner occupied vs. tenant occupied. I think I guessed that 80% or more were owner occupied. That was just my general feel for the neighborhood. It seems to mostly be homeowners. I was wrong. Pretty significantly wrong. I pulled the property records for all townhouses in Taylor Spring and then determined which were owner occupied based on whether the tax bills are sent to the actual property (likely owner occupied) or sent to a different address (likely not owner occupied) and this is what I found... Total Townhouses = 185 Owner Occupied = 94 Percent Owner Occupied = 51% So, it seems that about half of the townhouses in Taylor Spring are rentals. I was surprised, though mainly just because of my general assumption about what I was going to find. Are you surprised? | |
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Most Homes Sold Quickly In 2020! |
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![]() The graph above is an analysis of all of the homes that sold during 2020 in Harrisonburg and Rockingham County. You'll note that 69% of those homes sold (went under contract) within 30 days of being listed for sale! I expect that we will continue to see this dynamic in 2021. There are still plenty of buyers looking to buy homes, and very low inventory levels. As such, many homes are being scooped up by buyers within days (or weeks) of first hitting the market for sale. Home buyers in 2021 will need to be ready to act QUICKLY to secure a contract to purchase a home! | |
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Not Much Negotiability In Home Prices In 2020 |
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![]() Looking back at a full year of data now for 2020, it is impressive to note that the median "list price to sales price ratio" was 100% for the year. This means that at least half of sellers sold at or above their list price! Home buyers likely aren't surprised by this revelation as they have experienced it first hand if they bought - or tried to buy - in 2020. New listings that are prepared well, priced well and marketed well are receiving multiple offers within days of hitting the market. Oftentimes, buyers are not discussing whether to make a full price offer - they are discussing how far above list price to go with their offer. Home sellers must still remember that this is not a blank check. Just because buyers are so eager to buy that they are often going above list price does not mean that you can list your home for any price you'd like. If your home is potentially worth $300K in the market right now, you ought not list it for $350K and then be surprised when you don't have a rush or showings and don't have any offers. You still need to price your home based on recent sales, though you might be able to round up a bit more than you had in the past when pricing your home. I expect this dynamic (most homes selling for the list price or higher) to continue as we move through 2021. | |
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At Year End, Home Sales Up 13%, Prices Up 10% in 2020 in Harrisonburg, Rockingham County |
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![]() Happy New Year, friends! 2020 was a year like no other - in our local housing market - and in many (many!) other ways. I hope you and your family are doing well, staying healthy, and are full of hope looking forward to the year ahead! Below, I'll walk you through some of the overall trends we are seeing in our local housing market when reflecting back on a full year of 2020 home sales data. Before we get started, though, check out the featured home above here and feel free to download the full PDF of my market report here. Now, to the data... ![]() What a wild finish to the year! A few things to note when looking at this overall data...
Looking a bit further, let's break down the detached homes as compared to attached homes. Attached homes are duplexes, townhomes and condominiums. ![]() As you can see above...
It's hard to think of the best metaphor for the monthly pace of home sales in 2020. Perhaps someone running a race that tripped and fell and slowed down considerably a third of the way into the race, but who slowly picked up speed over the next third of the race and who absolutely SPRINTED through the final third of the race? ![]() Take a look at September through December of 2020 above, marked with a red line. This is not normal / typical / expected. We expect to see an average of about 100 home sales per month for the last four months of the year. In 2020, it was an average of 149 home sales per month! This, clearly, makes me hesitant to guess about what we'll see in January and February. These winter months are typically the slowest months of the year for home sales -- but not in 2020. I expect we'll continue to see stronger than usual home sales for at least the first few months of 2021. And, looking at those sales on an annual basis... ![]() If you track along any particular color band in the graph above you can see where we were at that point of the year for each of the past five years. In August (yellow) of 2020 we were tracking right around where we would expect to be based on 2019 sales. But then those last four months of the year happened, catapulting us waaaaay ahead of where we have been for any recent year in Harrisonburg and Rockingham County! Here's an even crazier look at what has been happening for the past four months... ![]() The more interesting (confusing!?) line above is the orange one. That is showing the number of home sales we're seeing per year in our area. That trajectory took a nose dive in early 2020 thanks to COVID but has been absolutely skyrocketing over the past four months. Why, why, why? Here are some guesses...
OK, I went on a bit more than I expected there, let's look one more time at the annual trends before we move on... ![]() Two main things to note above...
Now, looking briefly at what is to come... ![]() After I meticulously drew all of those purple arrows to point something out (see below) I realized it might seem like I was saying those numbers were decreasing. They're not. I didn't re-draw the arrows. You'll forgive me? OK - now to the point -- if you look at the seven purple arrows on the left you'll see that I'm pointing out the contracts signed between June and December of 2019 -- a total of 724 contracts. The seven purple arrows on the right are pointing out the contracts signed between June and December of 2020 -- a total of 960 contracts. So -- here's that evidence of a big increase in contract activity in the second half of the year. We saw that bear itself out in lots of closed sales between September and December, and I think that is going to keep on rolling into January and February. I expect we will see stronger than normal months of home sales for the first few months of 2021 if not longer. As I've alluded to a few times thus far, there is a lot of competition amongst buyers as each new listing hits the market. This abundance of buyers in the market, and scarcity of sellers, has caused continued downward shifts in inventory levels... ![]() As you can see above, end-of-year inventory levels fell 33% over the past year. The important detail to note here is that these are just "moment in time" inventory levels. How many homes are on the market, actively listed for sale, on a particular day. Clearly, the 33% decline in inventory levels did not result in a decline in home sales in 2020. Perhaps it's actually the other way around -- the 13% increase in home sales in 2020 caused inventory levels to drop another 33% OK, one last graph to illustrate something I've referenced above... ![]() I told you mortgage interest rates had fallen - but look at how far they have fallen! Less than two years ago, the average 30 year mortgage interest rate was above 4%. Only a year ago it was 3.74%. Now, it's 2.67%. That marks a 29% decline in interest rates over the past year. This makes mortgage money cheap -- and monthly payments low -- and is part of what allowed median sales prices to rise 10% over the past year. Buyers were willing to pay higher prices for homes at least partly because their monthly costs keep declining. OK, I'll wrap it up there for now. Again, 2020 was a wild year and not at all what I expected it to be in March and April when things started slowing down. I did make a few predictions for 2021, but given how many surprises 2020 threw at us, it's certainly hard to imagine where exactly things might go in 2021. If you're thinking about buying a home in 2021, let's chat sooner rather than later if I can be of help to you in that process. You'll want to get pre-approved for a mortgage right away and then we'll want to start stalking the new listings as they hit the market. If you're thinking about selling your home in 2021, it is likely going to be a lot of fun to do so -- even if still a bit stressful. You will still need to prepare your house well, price it according to pertinent market data, and we'll need to market it thoroughly, but many sellers in most price ranges and locations are finding it to be a very favorable time to sell. If/when you're ready to connect to talk about buying or selling, feel free to email me (scott@hhtdy.com) or call/text me at 540-578-0102. Happy New Year! | |
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Largest Inventory Declines In Lowest Price Ranges |
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![]() As will come as absolutely no surprise to anyone looking to buy a home under $200K, or even under $300K, there are far fewer options of houses on the market now as compared to two years ago. The graph above compares "beginning of the year" inventory levels today (blue bars) to two years ago (purple bars) to see how the market has shifted. As noted in gold, the lowest price ranges (under $200K, $200K - $300K) have seen over 60% declines in the number of homes on the market. It is a lot tougher to find a house to buy these days if you are hoping to buy for less than $200K, or even less than $300K. If you are planning to buy in that price range, get pre-approved, plan to see new listings the first day they come on the market, plan to make an offer immediately if it is of interest, and consider including an escalation clause to compete on price! | |
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Local Home Prices Increase 32% In Five Years |
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![]() The median sales price five years ago (2015) was $185,000 in Harrisonburg and Rockingham County. Last year, five years later, it was $244,900. That's a 32% increase in the median sales price over five years! A variety of thoughts come to mind...
That's all from me, for now. If this 32% increase in prices over five years seems shocking, or depressing, or awesome to you -- drop me a line (scott@hhtdy.com) and let me know what you're thinking or how you're feeling about these changes in home values in our area. | |
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So, Will My House Sell For 10% More This Year Than Last? |
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![]() It's a reasonable question. The median sales price increased from $223,000 to $244,900 between 2019 and 2020 -- which is a 10% increase. So, would your house sell for 10% more this year than last? Maybe. A good, solid, maybe. Whether your home would sell for 10% more than a year ago largely depends on its location and the buyer demand for homes like your home. If you live in a popular neighborhood where lots of buyers want to buy homes -- and few sellers are selling homes -- it is much more likely that your home would now sell for 10% more than it would have last year. In analyzing the market value of a property to prepare to list it for sale, we aren't going to look for comparable sales from 12 to 18 months ago and then add 10% to those sales prices. We will look for comparable sales from 6 to 12 months ago and then also examine current listings that are either actively for sale or are under contract. When prices are increasing quickly (10% over a year puts us in that zone) it is even more important to be precise and intentional with the pricing of your home. Pricing your home for sale won't always be a super straight forward decision but usually there are enough data points of recent sales and pending listings to give us enough guidance to make a good decision to maximize both the price for which you sell your home and the speed at which you sell your home. If you're getting ready to list your home this spring, it is definitely worthwhile to start looking at market value now. We can then continue to monitor listings and sales between now and when you list your home for sale to affirm our decision on pricing. | |
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My Predictions for the 2021 Real Estate Market |
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![]() As I mentioned yesterday, my 2020 predictions for our local housing market were WAY off base. :-) I did not see such a strong market coming, and if I had known about COVID my predictions for 2020 would have been even more dire. But yet, despite COVID, 2020 was a robust year in our local housing market with 12% more sales and a 10% increase in the median sales price. So - knowing that my 2020 predictions were quite wrong - will I still take the time to make some predictions for the 2021 market? Sure! Why not!? :-) As shown above, I am anticipating a 3% increase in the number of homes selling in Harrisonburg and Rockingham County in 2021 as compared to 2020. Here's why...
So, given that I am anticipating an increase in home sales, albeit smaller than last year, what am I predicting on sales prices? ![]() After as 7% increase in the median sales price in 2018 and a 5% increase in 2019, we saw a much higher, double digit, increase in 2020. The median sales price increased 10% from $233,000 up to $244,900. Again, I did not see this coming. I think this increase in the median sales price was largely the result of lots of buyers wanting to buy, low interest rates keeping mortgage payments affordable despite higher sales prices, and a limited inventory of homes for sale. So, where are we headed in 2021? I am predicting a 4% increase in the median sales price in 2021 in Harrisonburg and Rockingham County, which would get us up to $255,000. Here's why...
OK - enough about my predictions --what about for you? Email me (scott@HarrisonburgHousingToday.com) and let me know where you think our local market will go in 2021. And keep up with all the market data between now and next January by signing up to receive my monthly housing market report by email if you are not already receiving it. | |
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Comparing My 2020 Housing Market Predictions To Reality |
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![]() As shown above, I was terribly (!!!) inaccurate in predicting how many home sales would take place in Harrisonburg and Rockingham County in 2020. We saw a 1% increase in home sales between 2018 and 2019 and so I made the rather unexciting prediction that we'd see another 1% increase in 2020 to a total of 1,340 home sales. Wow, was I wrong! Home sales actually increased almost 12% to 1,481 home sales in 2020. This double digit increase in the pace of home sales is surprising because we were in the middle of a global pandemic for much of 2020 - but perhaps this is a part of why the increase happened. Here are some ways that the global pandemic (Covid) could have contributed to a significant increase in local home sales in 2020...
These (above) are some but certainly not all of the reasons why we saw an increase in home buying activity in 2020. In March and April of this past year as many aspects of our lives slowed to a stop, I certainly would not have predicted we see such a large increase in home sales locally -- but once we hit July, there seemed to be no stopping this quickly moving local housing market. So, given that I was wildly wrong on the number of home sales we would see in 2020, is it safe to assume I also erred on predicting the change in median sales price? Let's see... ![]() ...and, yes, I was also quite off the mark when it came to predicting the median sales price for 2020! After a 5% increase in the median sales price in 2019, I predicted that we would see another 5% increase to a median sales price of $235,000. When the year closed out, we actually saw a 10% increase in the median sales price -- from $223,000 in 2019 up to $244,900 in 2020. Wow! So, what could have caused this significant increase in the median sales price?
So -- given how inaccurate my 2020 predictions were you must, certainly, be looking forward to my predictions for 2021, right? :-) Stay tuned for my best guesses on what we'll see in our local market in the year ahead! | |
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Home Sales Rise Around 12 Percent In 2020! |
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![]() All home sales have not yet been reported but it is seems that we will see around a 12% increase in the pace of home sales in Harrisonburg and Rockingham County between 2019 and 2020! There have been 1,481 home sales recorded in the MLS thus far for last year and we may see that figure rise a bit more over the next few days, but not by much. This 12% increase is a SIGNIFICANTLY larger increase than we have seen in the last few years...
Stay tuned for my full market report in the next week or two, as well as predictions for the 2021 housing market. Oh, and HAPPY NEW YEAR! | |
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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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