Buying
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The Comfortable Feel Of An Established Neighborhood Might Come With, Surprise, An Older Home That Needs Some Updates |
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 An interesting dynamic in the Rockingham County real estate market is related to farmland and trees. Most land that that becomes a residential neighborhood is used as farmland before becoming a neighborhood. Thus, there usually aren't any trees on the property. This makes it easy to build the roads and houses - but means it takes a while for any trees that are planted by builders or homeowners to become established. Many home buyers love the feel of an established neighborhood, often because of the trees and other landscaping that give the neighborhood a comfortable feel. But yet, many home buyers also prefer newer homes that won't need updates and renovations. Thus, some home buyers find themselves choosing between... 1. Newer home in a newer neighborhood with young trees and not much of a feel of an established neighborhood. 2. Older (20+ years) home in a more established neighborhood with mature trees and landscaping. Which would you choose? | |
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Home Sellers And Buyers Will Often Disagree About Needed Updates |
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 A homeowner selling their home, especially if they have lived in it for a while, is often likely to only see small updates that might be needed in the home - and would likely describe them as elective...
But a potential home buyer considering a purchase of that same house might see things quite differently...
I'm not here to say that either party is right or wrong - I understand where the seller is coming from (the house doesn't need many updates) and where the buyer is coming from (I would want to make lots of updates). The challenge, of course, is when all of this is converted into pricing. A seller will likely price (value) the home higher given their minimal view on needed updates. A buyer will likely value the price at a lower price point given their broader view on needed updates. | |
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You Cannot Hear Traffic On A Nearby Road By Looking At Photos |
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 You can learn a lot from looking at the photos of a house that was just listed for sale. But, you can't... 1. Hear traffic on a nearby road. 2. Smell the odors of a nearby factory. 3. Feel the texture of the walls. (yes, a bit of a stretch) 4. Taste the well water. (also, a bit of a stretch) For these and plenty of other reasons, it is crucial that we go see a house in person to fully understand a house with all of your senses. Driving by the house will get you one step closer to a fuller understanding of the house - but seeing the house (walking around and through) is our best bet. | |
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Sometimes An Offer Is So Strong A Seller Will Not Wait For Other Imminent Offers |
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 Wahoo! An exciting new listing just hit the market. You are excited to go see it and will definitely consider making an offer. You know it will likely be a popular listing, with the potential for multiple offers, but you have already been pre-approved for your mortgage, you are going to see the house on the first day it is on the market, and you will likely make an offer on the second day that it is on the market. That should be enough, right? Well, maybe. Sometimes, an offer shows up that is strong enough to cause a seller to adjust how they were otherwise planning to receive and consider offers. If an offer comes in on the fictional house above on the afternoon of the first day that it is on the market... that is above asking price, cash, without an inspection, with a closing to take place in 20 days, with the seller able to rent back for free for up to three months... 1. Who could blame the seller for going ahead and accepting this very (very!) strong offer. 2. Who could blame buyers if they are disappointed when they find out on the second morning that the house is on the market that they are too late to submit an offer. So... 1. Buyers - Be willing to make a strong offer, quickly, if you want to try to get the seller to respond before considering other offers. 2. Also, Buyers - Know that an early offer from a motivated buyer might very quickly eliminate your opportunity to compete to buy a house that you really like - so, make an offer just as quickly as you are ready to do so. | |
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Sometimes It Makes Sense To Just Adopt The Timetable The Seller Prefers |
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 In a seller's market, which we are in... Sometimes It Makes Sense (for a buyer) To Just Adopt The Timetable The Seller Prefers Conversely, in a buyer's market, which we are not in... Sometimes It Makes Sense (for a seller) To Just Adopt The Timetable The Buyer Prefers Let's get into why... If you are about to make an offer on a house... and the seller prefers to close in 90 days, and you could, but you would prefer not to wait to long to close... sometimes it may make sense to just go with the timetable the seller prefers. After all, it is a seller's market, and if you don't go along with their desired timetable, they may choose to work with a buyer who will. Similarly... If you are about to make an offer on a house... and the seller prefers to close within 30 days, and you could, but you would prefer not to close quite so quickly... sometimes it may make sense to just go with the timetable the seller prefers. After all, it is a seller's market, and if you don't go along with their desired timetable, they may choose to work with a buyer who will. There may very well be costs to you (dollars, logistical headaches, stress) of going along with the seller's timetable -- but if you actually get to buy the house that you want to buy, maybe it will be worthwhile. P.S. Did you enjoy the AI generated image of a "man looking at a wall calendar"? ;-) | |
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How Will You Value Logistical Ease When Selling Your Home? |
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 For anyone who is selling a home and buying a home at the same time, there are some logistics we'll have to work through... If you are using the proceeds from your home sale to purchase the next home, there might be some wrinkles as to the closing and occupancy timeline. Do you move everything out of your current house on Wednesday, close on Thursday on both the sale and purchase and move into your new house on Thursday? That sounds simple enough, but it would likely be much easier if there were some overlap of occupancy of the two houses. What if you could move into your new home a week before closing? What if you could wait to be completely out of your current home until a week after closing? The buyer of your current home, or the seller of your new home, might be willing to participate in making the moving logistics easier for you... but that logistical ease might come at a cost. Would you be willing to sell your current home for $5K less, or buy the new home for $5K more if you could have the logistical ease of having access to both houses to aid in the move from one to the next? How much value does this logistical ease have to you? | |
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Just When You Were Not Expecting It, The Perfect House Came On The Market! |
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 Sometimes, it really does happen! You've been searching for just the right home for months, or even years, and it seems like you might never find the right house. You're convinced the right house is out there, but the seller or such a house must just not be ready to sell. But then... one day... just when you were not expecting it... the perfect house came on the market! Are you ready to move quickly? 1. Can you go see it on the first day it is on the market? 2. Do you already have a lender letter in hand to be able to submit an offer right away? 3. Have you looked at enough other houses recently to know whether the home is priced well? If it's been a while (or forever) since you have seen a listing that would work for you -- when you do see that perfect fit, I hope you are ready to make a move! | |
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Will You Remove Contingencies From Your Offer In A Multiple Offer Scenario Regardless Of Whether The Competing Offers Have Those Very Same Contingencies? |
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 A house comes on the market, and you like it, and it is priced reasonably. You make a full price offer on the house with a home inspection contingency. Then, you get notified that another offer has been received on the house. Since the time that you made the offer, you have decided that you don't just like the house you LOVE it. You don't want to miss out on this one. So, do you remove the home inspection contingency? You don't know whether the other competing offer has an inspection contingency. You also don't know what other contingencies exist in that other offer. You could leave the inspection contingency in place if you are not comfortable buying this home (or any home) without conducting a home inspection. You could remove the inspection contingency to try to make your offer as competitive as possible - though if the other offer also had an inspection contingency, maybe you didn't need to remove it? Or, trying to hit the middle ground in some ways... perhaps you add language to your home inspection contingency to only keep the contingency in place if the competing offer does not have an inspection contingency. Side note on this last strategy... If you offer $400K with an inspection contingency -- and your inspection contingency includes language to only keep it in place if the competing offer does not have an inspection contingency... And if the competing offer was $402K with an inspection contingency... Then you might lose out on the house - because both offers had an inspection contingency and your offer was at a slightly lower price - whereas your offer might have been selected if you had removed your inspection contingency from your offer that was at a slightly lower price than the competing offer. A single best way to navigate this issue - when to include or remove contingencies - does not exist. But, it is important to keep in mind the myriad of contingencies that competing offers may or may not have when you start to modify your offer terms based on a competing offer with unknown terms. | |
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Will The Unique Features Of Your Home Broaden Or Narrow The Buyer Pool? |
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 When you are getting ready to sell your home, we'll need to think about how large the pool of buyers will be who will consider your home. Clearly, the more buyers who can and will consider your home, the better. A variety of aspects of your home will limit the size of that pool of potential buyers for predictable reasons...
But then, we get to the more unique features of your home... some such features will broaden the buyer pool... and some might narrow it. For example... Every bedroom has it's own bathroom - this would likely broaden the pool of buyers who will consider your home. Custom tile flooring throughout with a bold color palette - this might narrow the pool of buyers. Screened porch and deck and two patios - this would probably broaden the pool of buyers. Elaborate landscaping - this might narrow the pool of buyers if they worry about landscaping maintenance The list could go on and on. Let's make sure to evaluate how large of a pool of buyers be willing to consider your home based on it's relatively routine... and more unique... features. | |
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Farmland Behind Houses Does Not Always Remain Farmland |
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 "I love this house because it backs up to farmland." "The views from this house are great because there aren't any other houses behind it." "This home offers such great privacy without any neighbors behind it - just wide open farmland." All of these are reasonable sentiments, but remember... Farmland Behind Houses Does Not Always Remain Farmland If you own (or are buying) a house in a residential area that currently backs up to farmland... 1. That farmland might remain farmland for as long as you own the house. 2. That farmland might become housing some day. Most farmland is zoned for agricultural use -- so if the farmland behind your house is zoned as such, a potential builder or developer will have to apply to have the land rezoned. Thus, you'll likely get some sort of notice that someone intends to turn that farmland into housing. Buying a home that backs up to farmland is a great idea - you'll likely love having only a farm as a back neighbor - but remember that the farmland might not always remain as farmland. | |
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Sometimes One Offer Spurs On Additional Offers |
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 This dynamic is common with brand new listings and listings that have been on the market for a few weeks. Brand New Listing... Eight showings over the first three days, but no offers. Then, an offer is received, other showing agents are notified, and three more offers are submitted. Few Week Old Listing... Nine showings over the first three weeks, but no offers. Then, an offer is received, other showing agents are notified, and two more offers are submitted. It's almost as if some buyers need to know other people want to buy a house before they are willing to decide they want to buy the house. So... Sellers - Don't despair if you don't have an offer yet - when an offer comes in, it could actually result in more than one offer. Buyers - Who will you be? The first buyer to make an offer, or will you wait until someone else does and then jump in? | |
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Indeed, As Mortgage Interest Rates Decline, More Buyers Will Be Able To Afford To Buy Your Home |
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 Mortgage interest rates have been declining for about five months now... Early May = 7.22% Early August = 6.47% Mid September = 6.09% Will we even see a FIVE-point-something mortgage interest rate soon? Quite possibly. As any home buyer will tell you, these lower mortgage interest rates are GREAT... they are lowering mortgage payments for buyers getting ready to buy a home. And... for the home sellers... these interest rates are also GREAT... they allow more buyers to afford to buy your home! If you're getting ready to buy a home, but haven't talked to your mortgage lender in a few months, you should reconnect with them and ask for an updated estimate of your mortgage payment given these newer, lower mortgage interest rates. | |
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I Just Decided I Want To Buy A Home. How Quickly Do I Need To Go See That House Over There? |
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 So, you just decided you are going to buy a house. Excellent. The Harrisonburg and Rockingham County area are a pretty great place to live - and if you're buying a house it likely means you plan to stick around for a while. So, back to your question -- how quickly do you need to go see that house over there? Well, it depends, on how long it has been on the market. A popular new listing towards the end of last week had eight (+) offers within just a few days of being listed for sale. So, if the house of interest is a new listing, you might need to go see it immediately to have a chance at pursuing it. But some houses currently listed for sale have been on the market for 30 to 60 days or longer. You should go ahead and schedule a time to go see these houses - but it could probably wait a day or two - you probably don't need to drop everything and go at this very moment to see the house. So, as a new buyer... 1. While not mentioned above, get preapproved with a lender ASAP. 2. Hurry out to see the brand new listings of interest. 3. See slightly older listings (on the market for two or more weeks) with some haste, but it doesn't necessarily need to be with quite as much urgency. | |
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Contract Activity Cools Slightly After Strong Summer Surge in Home Sales in Harrisonburg and Rockingham County |
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 Happy Monday Morning, Friends! We are just six days from the first day of Fall... and it's starting to feel like it! High temperatures are peaking in the 70's instead of the 80's this week... the leaves are starting to change colors... and we're back to having fun watching JMU football games...  My niece, Sofia, just started college at UNC Charlotte, so Luke and I were excited to go down to visit her and to take in the first JMU football game of the season. Here's looking forward to some further fun as the season continues! Go Dukes!!! Before we dive into the real estate data... as one last reminder of summer... I'm giving away a $50 gift card to Sweet Frog. Yes, I know, we can enjoy Sweet Frog all year round, but it's particularly tasty on a warm summer evening. So, if you're a fan of Sweet Frog frozen yogurt (and all the toppings!) click here to enter the gift card. And now, on to the latest in our local real estate market...  Above you'll see a basic overview of the amount of homes that are selling these days, and the prices at which they are selling. A few things to note... # Sales: We saw more home sales this August than last (+9%) and even though we've seen fewer home sales over the past 12 months compared to the prior 12 months (-2%) we are seeing an increase (+8%) in the first eight months of 2024 as compared to the same timeframe last year. So... more homes are selling this year than sold last year, and... Prices: In every time horizon I explored above (1M, 3M, 6M, 12M, YTD) I found an increase in the median sales price. I'll focus in on the year to date number, however, where we see a 4% increase in the median sales price when looking at homes selling in the first eight months of this year (median of $342,490) compared to the first eight months of last year (median of $330,000). As we continue, we'll want to see how the performance of different market segments compare to this market wide 4% increase in the median sales price. First up, detached home sales...  Interestingly... [1] Despite an 8% market-wide increase in home sales thus far in 2024... we're only seeing a 4% increase in the number of detached homes that are selling. [2] Despite only a 4% increase in the median sales price in the overall market (detached + attached) we're actually seeing an 11% increase in the median sales price of detached homes in 2024. As we continue through this report, you'll note a variety of charts and graphs that indicate that price growth is slowing to only 4%... but that is the overall market, whereas detached home median sales prices still seem to be climbing more quickly than the overall market. Dialing in now on one specific geographic area... the City of Harrisonburg...  It has been increasingly difficult to find a house to buy in the City of Harrisonburg. As shown above, in the first eight months of 2022 we saw 303 home sales in the City, last year that dropped to 226 sales and this year only 198 sales. To be clear... this is almost entirely a supply side issue - there aren't enough property owners willing to sell their homes, and there isn't much new construction happening in the City these days. Despite that restriction in the market in the City of Harrisonburg, we are still seeing only a 4% increase in the median sales price when comparing the first eight months of this year to the first eight months of last year... and the median sales price in the City of Harrisonburg is still under $300K thus far in 2024. And how about out in Rockingham County? How are things going there?  We are seeing a significant increase (+16%) in the number of homes selling in Rockingham County thus far in 2024 compared to in the same timeframe in 2023. You can't see it from the chart above, but a lot of that increase in the number of homes selling is a result of new homes being built in the County. Median prices, however, continue to rise in Rockingham County at that same 4% in the first eight months of 2024 compared to the same timeframe last year. New home construction... it's on the rise? Yes, indeed, it is...  We've seen 253 new home sales thus far in 2024... which is a 27% increase from the first eight months of 2023... though interesting, it's slightly fewer than we saw two years ago, in 2022. I expect we will continue to see quite a bit of new home construction over the next few years... and we need it... as we continue to see high levels of demand from home buyers. So, if we're seeing a 27% increase in new home sales, how about those existing home sales? Are they also increasing at that pace? Ummm... nope...  In contrast to the 27% increase in new home sales thus far in 2024... we have only seen a 3% increase in existing home sales. Lots and lots of homeowners are just staying put and not selling their homes. Now, let's get to some of the graphs, to get a clearer picture of some of the trends we have been discussing...  August marks the fourth month in a row with more home sales (closed home sales) than during the same month last year. This has been an active summer of real estate closings... though homes often go under contract a month or two before they make it to closing... so this busy summer of real estate closings was the result of a busy late Spring and early Summer of contracts, which we'll see shortly. To put this year in the context of the past two years...  Home sales in 2024 are definitely exceeding 2023 levels... but pale in comparison to 2022. I expect we might see some further upward momentum in home sales later in 2024 if or when we see further relief in mortgage interest rates. More on that later. Here is an illustration of the two overall trends we're seeing right now in Harrisonburg and Rockingham County...  First off, at the top, home price growth is slowing. Testing your reading comprehension and short term memory... do you recall that the overall market is seeing only a ___% increase in the median sales price while the detached home segment of the market is seeing an ___% increase in the median sales price? ;-) Overall Market = 4% increase; Detached Homes = 11% increase. And... that second line (the blue one) at the bottom... shows us that aver steady declines from over 1,700 sales a year down to about 1,200 sales a year, we are now seeing some overall increases in the number of homes selling in our market. Back to those detached homes for a moment...  Here's you'll note the *absence* of a flattening out of the median sales price line in green. While the overall market is only seeing a 4% increase in median sales prices in 2024, thus far this year detached homes have been selling at prices that are 11% higher than last year. Earlier I talked about a busy summer of closings which was a result of earlier contract activity. This next graph shows current contract activity, which is a predictor of home sales activity over the next month or two...  On the left side of the graph above you can see quite a few months of much higher contract activity this year (red line) than last year (blue line) -- particularly in March, April and May. But then, contract activity declined in July and August to levels below where we were a year ago. Looking ahead, we will most likely see a similar number of homes going under contract in September as we did in August, before contract activity likely starts to decline even further in October. This recent slow down in contract activity has also shown up in the pending sales metric, which tracks how many homes are under contract at any given point...  After seven months of riding high above 2023 levels, we have now seen pending sales drop below 2023 levels in August. This is mostly a result of slower months of contract activity in July and August. It's certainly possible that we'll see pending sales pop back up again as we work our way through September and October... but the 2023 and 2024 trajectories have crossed as of the end of August. But wait... if pending sales are declining, that must mean inventory is rising?  Sorta kinda. Inventory levels dropped to their lowest levels at the end of June... but rose again in July and remained steady at that point in August. Of note... inventory levels consistently climbed last year between June and October... but that was during the exact same timeframe when mortgage interest rates were climbing to their highest levels in 20 years. I do not expect that we will see inventory levels climb that high in September and October this year. But speaking of climbing... will days on market start to climb soon?  After quite a few years of absurdly, consistently low median days on market, we have seen some variability in this metric over the past two years. That pace at which homes go under contract (days on market) slowed during each of the past fall/winter seasons, so perhaps we'll start seeing that again in 2024. Finally, that one little (or big) number that seems to have been having an oversized impact on the housing market over the past few years... mortgage interest rates...  After peaking at 7.79% last October (the highest level in 20+ years) we have started to see some relief in mortgage interest rates -- particularly over the past three to six months. As of June, the average 30 year fixed rate mortgage had fallen below 7%, and now we're closer to 6% than 7%. The Federal Reserve might be announcing a rate cut this Wednesday... though some say that the recent anticipation of that rate cut has already been priced into adjustments in mortgage interest rates. So, let's play a bit of up and down in 2024...
So, as we look ahead at the final three and a half months of the year (yes, that's all that remains) here are a few things to keep in mind... Home Buyers - Many segments of the local market are still rather competitive (multiple offers) but plenty of homes aren't going under contract within two days. Get preapproved now, go see houses quickly when they hit the market, and be prepared to make a rapid, but thoughtful decision about whether to make an offer. Home Sellers - Some, but not all, houses are going under contract quickly. The more broadly appealing your home is to buyers (based on size, location, house features, lot features, etc.) the more quickly we are likely to receive offers. If there are some attributes of your home that disqualify broad segments of the pool of potential buyers, then we are likely to have a longer wait for an offer... and we might have to adjust your list price more than the market data would otherwise suggest in order to inspire a buyer to make an offer. The data and observations I have presented in this market report are a high level overview of our overall market. If you're getting ready to buy or thinking about selling, we should be chatting more specifically about your segment of the market -- what you will be buying, or selling. Feel free to reach out anytime with questions or to set up a time to meet. You can contact me most easily by phone/text at 540-578-0102 or by email here. | |
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When Is A Home Seller Likely To Consider Your Home Sale Contingency? |
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 So, you have a home to sell before you can buy your next home... and you are not able to arrange financing to be able to buy before selling? Let's think through when a seller is likely to consider -- or not consider -- your home sale contingency. 1. If your home is not yet on the market for sale, and a house you want to buy was just listed and has lots of showings and talk of offers -- the seller is not likely to consider your offer with a home sale contingency. 2. If your home is listed for sale, and under contract, and a house you want to buy was just listed and has lots of showings and talk of offers -- the seller might be willing to consider your offer with a home sale contingency, if they don't receive (or think they will receive) an offer without such a contingency. 3. If your home it not yet on the market for sale, but the house you want to buy has been on the market for a few months without going under contract -- the seller might just be willing to consider your offer with a home sale contingency to give you time to hopefully secure a contract on your home as well to be able to proceed towards closing. So... whether a home seller will accept your home sale contingency is related to whether your house is already listed for sale, and if your house is already under contract, and whether the house you want to buy is a recent listing and whether the house you want to buy has lots of other competing buyer interest. So, it's not impossible to buy a home with a home sale contingency -- but it won't allow you to successfully pursue every house that you might want to buy. | |
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Educate Yourself On The Real Estate Market By Starting To Look At Homes Sooner Rather Than Later |
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 Buyer: I plan to buy a home next spring or summer, so I'll be back in touch in March to start looking at homes. Me: If you have the time and energy for it, we should start looking at homes now or soon. A home buyer's default tendency is often to wait to start looking at homes until they are good and ready to buy. But... there are some very good reasons why some home buyers start looking at homes before they are actually ready to buy. 1. Looking at homes now will familiarize you with the market and will start to help you understand the relative value of any given house. 2. Looking at homes now will help you clarify what you want or need in a next home - or will help you and your co-buyer talk those things through to reach a stronger consensus. 3. Looking at homes now will allow us to start to talk through the nuances of the home buying process. And then... when you are good and ready to actually buy... you'll already have some familiarity with market dynamics, you'll already have great clarity on your goals for your next home, and you'll already understand many aspects of the buying process. So... if you are thinking you might buy a home in the spring... it's not a bad idea to start looking at houses now. | |
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If You Can Buy A House Before Selling Your Current House, Consider Keeping Your Current House As A Rental Property |
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 This isn't universally applicable advice for all homeowners who are selling and buying, but it's worth considering if you find yourself in this situation... If You Can Buy A House Before Selling Your Current House, Consider Keeping Your Current House As A Rental Property Here's what I mean and why... You might already be a homeowner... but find yourself ready to buy a new home. You might be considering selling the current home and buying a new one for a variety of reasons -- to get to a larger house, or a smaller one, or one with different rooms in different places, or to move to a new school district, and on and on. If you are in this situation... of getting ready to sell and then buy... you'll likely want to explore whether you have the financial capability to buy before you sell. After all, your offer to buy a house will look much more compelling to a seller if you do not have a home sale contingency in that offer. And thus, if you talk to your lender and find out that you can buy before you sell, it is often then reasonable to stop and consider whether you could buy... and then not sell at all! If you buy a new home and then do NOT sell your current home... 1. You can rent your current home, often for more or much more than your current mortgage payment. 2. You can put your excess rental income towards your new mortgage payment, while also putting some aside for maintenance costs on the house you are keeping. 3. The rental rate on the house you keep will likely continue to increase over time. 4. Your tenants will be paying down your mortgage on the home you kept instead of selling. 5. Over the long term, you will own two houses that are appreciating in value, rather than just one. There are plenty of reasons why you might not keep the house you are selling... because you don't want to be a landlord, or you don't like the larger financial risk, or you are moving out of the area... but if you can buy before selling, let's talk the "keeping the house" idea through before you commit to selling your current house. | |
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Would You Sell Your Home If You Do Not Know What You Will Buy? |
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 For most folks, the answer is no... ...they would not sell their home if they do not yet know what they will buy. And, since there are still currently more buyers in the market than sellers... it likely makes sense to ensure you have a solid plan for what you will buy before you start down the path to selling. Otherwise... we might get your house on the market, get excited about quite a few showings, be thrilled about receiving several offers with highly favorable terms... only to realize that you aren't actually ready to commit to selling your home if you don't have a new home to purchase. So... if you're ready to move from one house to the next... let's make sure we're confident that we can sell your current home... but we might need to start by focusing on what you will buy... before starting the process of selling your current home. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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