Buying
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Three Ways To Make A Contingent Offer |
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 If you have to sell your current home in order to buy a new home - there are (at least) three ways to do that...
If you're making an offer on a new-ish listing then Option 1 and Option 2 are not likely to be successful strategies to securing a contract on the house you want to buy. The best bet is to wait until you have your house listed for sale AND under contract - Option 3 - because at that point your have positioned yourself (and your home sale contingency) as best as you possibly can from the seller's perspective. A few additional, related, notes...
Selling and buying simultaneously can be tricky, complicated and frustrating -- but it is possible! Feel free to be in touch if you want to talk through the options outlined above as they pertain to your situation. | |
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Missing Out On House After House As A Buyer |
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 Some buyers in this market -- particularly those seeking a home under $250K -- are likely feeling like they are missing out on house after house. It is a tough time to buy a house under $250K and there is a LOT of competition from other buyers. Many buyers are thus finding themselves having to approach each new listing asking themselves how far above the list price they are willing to go for the house they are viewing. A few thoughts... 1. Just because you missed out on ANOTHER house on which you made an offer - that does not necessarily mean that your offers were not reasonable and your offer terms were not strong. It likely just means that some other buyer made an even stronger offer - be that in regards to price or the other terms. 2. If you walk into a new listing and find it to be a near perfect fit for what you are hoping to buy, or a better fit than anything else you have seen, it is reasonable to consider offering a good bit ($5K? $10K? $15K) above the asking price to try to be buyer who gets to but that house. 3. Carefully weight whether you would want to do something like removing your home inspection contingency. If a seller receives two offers of $240K on a $230K house and one buyer will be doing a home inspection and the other will not, the seller is likely to choose the offer without an inspection contingency. You shouldn't necessarily waive the home inspection, but that is likely a way to make your offer more competitive. 4. Don't grow discouraged. Don't give up. Keep trying. It can be depressing to miss out on house after house - but eventually you really will secure a contract on a house. Get out there early to see new listings and make as strong as an offer as you are comfortable making. Best of luck, buyers. It's a tough market out there! | |
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Buyers Kept Showing Up In October 2020 |
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 Who cares about normative seasonal changes in home buying activity... ...this is 2020! :-) Usually, buyer activity (contracts being signed) starts to slow down in October. We usually see around 110 contracts signed during the month of October. But not in October 2020. This year, there were 147 contracts signed! I'll take a full look at market activity in October in the next week or so, but until then, rest assured that buyers keep on buying, even as the weather gets colder and the leaves fall off the trees! | |
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Home Buyers and Sellers Think Differently About Repairs After A Home Inspection |
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 While not always the case, a general rule of thumb is that... On home inspection repairs...
Inspector: Several roof shingles are missing, and the roof is past its life expectancy. Seller: Replace the shingles. Buyer: Replace the roof. Inspector: The air handler coils are dirty and the heat pump is reeaaallly old. Seller: Clean and service the heat pump and air handler. Buyer: Replace them both! These are a few extreme examples to start to show the differences in perspectives on repairs. Again, the important thing here is to recognize that a buyer and seller look at home inspection reports differently. A seller typically wants to minimize their repair costs while keeping the home sale on track. A buyer wants to make sure that any previously unknown property condition issues are addressed in a manner that is likely to prevent further near term maintenance needs in those areas. So, what is a buyer to do? A few thoughts....
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Confused By Some Data On Zillow? You Are Not Alone! Here Is Why It Happens! |
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 If you use Zillow to peruse real estate listings or to search for your dream home, you might be baffled at some of the data you are seeing sometimes...
If you're getting confused when perusing the details of a property on Zillow, don't spend too much time trying to figure out what is going on. It's much more likely that Zillow is unintentionally creating the confusion than it is that the property is actually that confusing. The details of any given property on Zillow end up being a combination of data from the local real estate records (for example Harrisonburg and Rockingham County) which is then combined with, augmented by, corrected by the data coming from the MLS. It's the latter half of that (data from the MLS) that can end up causing some of the confusion. Basically, our MLS has one set of fields in its database, and the data in those fields is feeding into another set of similar but not identical fields in the Zillow database. Sometimes the data coming out of the MLS doesn't quite end up where it ought to on Zillow, causing Zillow to show some erroneous and confusing property details. So - if you're stumped by some of the details of a property on Zillow - do not fret - just shoot me an email (scott@hhtdy.com) and I'll see if I can sort things out for you. | |
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Harrisonburg Area Home Sales Over $500K Continue To Soar In 2020 |
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 Only 5% of local home buyers spend $500K or more on their home purchase (per sales data over the past year) but this segment of the local housing market has been strong over the past few years. As shown above, there were 47 home sales over $500K last year - which was more than any time in the past decade. This year we have already exceeded that pace of $500K+ home sales even with just the first 9.5 months of the year. There have been 54 home sales over $500K up through October 19, 2020 and there is still time for a few more before the end of the year. Reigning in our enthusiasm a bit, though, this is a relatively small number of buyers. If you are selling a home over $500K, you need to keep in mind that only about 50 buyers per year (just over 4 per month) spend that much money on a home in ALL of Harrisonburg and Rockingham County!  Last year was an extraordinarily strong year for home sales over $600K - with 27 such sales - well more than in any other year in the past decade. This year -- we're seeing even more $600K+ home sales, with 29 thus far and still two and a half months to go! And one more look at an even higher price point...  Above, you'll see that most years there are only 5 or fewer home sales over $700K. But back in 2015 there were 11 (which was more than double the norm) and last year there were 14 such sales. This year seems to also be a very strong year for these $700K+ home sales, with 12 thus far. So -- overall, the high end home sales market is doing well -- comparatively, but that is not to say that selling a home over $500K is an easy task - it's not. Home sellers over $500K are aiming for a tiny pool of potential buyers -- even if that pool of buyers might be stronger this year (and last year) than in most other recent years. | |
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Preston Lake Has A Swimming Pool! |
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 Check out the new swimming pool at Preston Lake! Preston Lake is located just east of the City of Harrisonburg in the Shenandoah Valley of Virginia and now features an enormous clubhouse with a fitness center, a lake with surrounding walking path, lots of beautiful and well maintained open space and a playground! Looking to live at Preston Lake? A four townhouse townhouse was just listed for sale (by me) located adjacent to the beautiful Village Green! Find out more here: 3297BatteryParkPlace.com Here's the new townhouse listing...  ...and here's the Village Green...  | |
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Contract Activity Continues Full Steam Ahead In October 2020 |
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 Home sales usually start slowing down in October - but not this year. In the first two weeks of October we usually see forty-something contract signed by buyers and sellers in Harrisonburg and Rockingham County. This year -- 65 contracts were signed during that timeframe! I assume at some point things will start to slow down, somewhat, but it isn't happening as quick as you might think it would given the time of the year. So, if you're thinking of selling your home but are wondering whether you should wait until the spring market - you might not need to wait after all! | |
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How Many Unrelated People Can Live In A House In Harrisonburg? |
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 It is a common misunderstanding that the zoning classifications can be interpreted as follows...
In fact, it doesn't work that way at all. So, how can we understand the limits of how many unrelated people can live in a property based on the zoning of that property? The city has all of this information neatly organized on their website here. I have included a (somewhat blurry) screen capture below. Of note, there can be exceptions to these generalities -- based on a special use permit for a property, or if a property use is "grandfathered in" based on that use existing since before zoning regulations limited the use. But this is a very helpful starting point for understanding how many unrelated people can live in a property in the City based on the zoning of that property.  | |
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Different Strategies for Buying A Rental Property For Your College Student |
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 Option 1 -- A property in a traditional student housing neighborhood. These will allow the most students to live in the property and will maximize the rental income per dollar spent on the purchase. However, it will also expose you to a more turbulent segment of the market, as rental rates and sales prices of these properties can vary quite a bit over time as the supply of competing student housing ebbs and flows based on large complexes being built by student housing developers. You can find purchase options in this category here. Option 2 -- A townhouse in a community that has many owner occupants, some non-student renters and some student renters. Many of these will not allow as many unrelated students to live in the property (per zoning regulation or restrictive covenant) and will not provide quite as much rental income per dollar spent on the purchase price. However, they will be in segment of the real estate market that is much more predictable and less volatile from a rental rate and/or sales price perspective. You can find purchase options in this category here and here. I work with parents of JMU students each year who go down each path outlined above, each for different reasons. Most of the time, though, it boils down to their tolerance for risk or their desire for reward. It can also be related to their intended time horizon for owning the property. If you are interested in buying a rental property for your son or daughter to live in while they are at student at JMU, let me know. Oh, and you might also want to read up here... | |
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Harrisonburg Area Home Sales and Prices Soar In September 2020! |
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 Happy Monday Morning! What a wild year this has been - and it is now, already, more than three quarters of the way to the end. Many things have been turned upside down in our daily lives, but as this year has continued to progress, one thing that has not been affected as much as you might expect has been our local real estate market. We're seeing more home sales this year than last, at higher prices, taking place at record speeds. Before we dig into the data, be sure to check out Founders Way, a condo development currently under construction just minutes from downtown Harrisonburg. Find out more about these new two bedroom condos starting in the $170K's by visiting FoundersWay.com. Now, feel free to download a PDF of my entire monthly report, or read on for some juicy tidbits to start your week off right...  First, from a big picture perspective, referencing the chart above...
So, again, repeating the story from above - COVID has created plenty of train wrecks, but our local housing market has been able to keep on moving right along, full steam ahead. Now, looking for a moment at detached homes compared to attached homes...  The green portions of the chart above show the trajectory of detached homes, and you might note that there have been slightly fewer (735 vs. 737) of these sales in 2020 when compared to 2019. Despite that ever-so-slight slow down, however, the median sales price of those homes has increased 9%! If detached home sales have slowed down, slightly, attached home sales have been running in the opposite direction, quickly. We have seen an 11% increase in the number of attached home sales in 2020 as compared to 2019 - and again - a 9% increase in the median sales price of these attached homes. Now, for the visual learners, let's take a look at September again...  As shown above, September was a wild month for home sales. The (150) home sales seen in September 2020 make it the second highest month of home sales for the year - which is quite atypical for September! I assume that home sales will slow down quite a bit in October, and then much further in November and December -- but this year has been anything but predictable, so who knows!?! Oh, and did I mention that 2020 finally caught up with 2019?  Back in March and April, I noted that 2020 was off to a STRONG start -- with more home sales in the first quarter of this year than in any recent year. But then, COVID. Many fewer sellers put their homes on the market in March, April and May, which resulted in fewer buyers being able to buy houses, which slowed down the annual pace of home sales quite a bit as we progressed through late spring and then through the summer. But then, September! The high sailing month of home sales in September caused our year to date trajectory to pop above all recent years again. So, 2020 is a great year - or at least for home sales in Harrisonburg and Rockingham County! Want another visual of the impact of COVID?  The weird dip in the orange line on the graph above is the impact of COVID. Our annual pace of home sales started dropping about five months ago, and we can only now confidently say that we're back on track to see the expected overall increase in that trajectory of home sales in this area. But that green line!?! Despite a slow down in home sales, we continued to see the median price rise, rise and rise some more. Maybe because COVID caused inventory levels to dip even lower, causing buyers to be willing to pay even more for a house? Maybe because the super low mortgage interest rates allow a buyer to be more flexible on price? Nobody knows for sure, but those prices, they keep on rising! Speaking of prices rising...  Over the past five years we have seen an average annual increase in the median sales price of 5% per year. This year, it is looking like it will be a 9% increase. This is not totally surprising -- more buyer interest, lower inventory levels, low interest rates, etc. -- but prices can't rise at 9% per year forever, so 2021 and 2022 will be interesting to watch to see how much further prices can or will increase. And now, looking back a bit to look forward...  A few things to note here, on the graph above. First, it was a summer FULL of contracts. There were 34% more contracts signed this summer than last, and 32% more signed this September than last. Thus, it seems relatively likely that the strong home sales we have seen thus far in 2020 will continue on through at least October and likely into November. How many times have I said "low inventory levels now"?  There it is, visualized, above -- the agony of buyers in our current local housing market. Inventory levels are at historic low levels. Never have there been fewer homes on the market, for sale, at a single point in time in Harrisonburg and Rockingham County. We have seen a 46% decline in active inventory over the past year. Now - keep in mind, we have seen a 2% - 3% increase in home sales, so these low inventory levels just mean that as quickly as new listings come on the market they are being scooped up by a buyer, preventing them from contributing to the "number of homes for sale" metric which we call "inventory". Unfortunately, I don't anticipate that these inventory levels will shift upwards anytime soon unless it is due to new construction at a large scale. Finally, a few times above I have noted that prices are rising - and this is perhaps one of the reasons why buyers can pay higher prices without blinking...  As shown above, the average mortgage interest rate keeps on falling. A year ago it was 3.64% and now it's down to 2.9%. These super low interest rates create a great opportunity for today's home buyers to lock in ridiculously low interest rates -- and they soften the impact of rising home prices. Alright, I'll pause here for now. If you've made it this far, thanks for taking the time to seek to better understand our local housing market. For more such joy, feel free to check out my blog or shoot me an email (scott@hhtdy.com) with any questions you have about our local housing market or about your house. Some key take aways... BUYERS
SELLERS
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Many Of The Reasons Why Average Price Per Square Foot Can Vary From House To House |
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 As I pointed out earlier this week, the "average price per square foot" is not necessarily a helpful metric for comparing the value of homes... Jim Herr, a local builder, agreed that square foot pricing can be deceptive, and pointed out quite a few reasons why that could be so...
As Jim points out, there are countless differences in the components and construction quality of each home - rendering pricing by square foot nearly useless. Looking to price a new home -- but not based on the square footage? You can contact Jim Herr as follows... Jim Herr Herr & Co. Building Contractors 540-820-4149 | |
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How Quickly Should You Make An Offer On A House? |
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 It depends on how much perfect that house is for you... ...and how rare that perfection is... How Perfect
How Rare
Sometimes a house is just perfect for you - and for some buyers, that rarely happens. If that's the case - you should be ready and willing to move forward quickly with an offer. The speed of your decision making should align with how perfect and how rare of an opportunity each new listing is for you and your needs and wants. | |
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Buying A Home In An Under Supplied Segment Of The Market |
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 There are plenty of segments of our local housing market where it is HARD to buy a home right now. There are waaaaay more buyers than sellers in the market and the process of trying secure a contract on a house can be frustrating, depressing, infuriating, aggravating...I could go on. Even if a home buyer...
...they might still not get the house. After all, well prepared buyers in this market will do all of these items. And if there are (for example) 20 showings in the first two days that a house is on the market -- and eight offers by nightfall on that second day -- it is likely that there will be several other very strong offers from very eager buyers. And in the end, the seller can only accept one of the multiple acceptable offers. So, when getting the call (or text or email) letting you know that your offer was not accepted -- recognize that you might have done everything possible to buy the house -- and have made a very reasonable strong offer to purchase it -- and the seller might have been very willing to accept your offer -- except that there were multiple similarly strong offers for them to consider and they only have one house to sell. In the end, I'm not entirely sure how to console such a buyer in today's market... I guess the lesson learned is to keep trying for that next house, with the same strategies, and hope that if your offer is as strong as it can possibly be but is competing against other similar strong offer that hopefully the seller will choose you as the winning buyer the next time. Sorry buyers, it is a somewhat heartbreaking time to try to buy a house right now in some segments of our local market. | |
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Lots of Homes Selling (Going Under Contract) in September 2020 |
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 Buyer activity usually starts slowing down in September. After all -- spring is usually the busiest season for buying, followed by summer. But this September, buyer activity has been STRONG! As you can see, above, we have seen 73 to 87 contracts signed in the first 25 days of September during each of the past three Septembers. But this September -- there have been 106 contracts signed in the first 25 days of the month! Nothing has been normal this year, and September is proving to be no different. Home sales don't show any signs of slowing down yet this year! | |
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Analyzing the Accuracy of Zillow Zestimates In Harrisonburg and Rockingham County |
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 download the infographic above as a PDF Do homeowners enjoy checking out the Zillow Zestimate for their home? Yes Are Zestimates accurate indicators of market value of homes in some real estate markets? Yes, probably. Are Zillow Zestimates for properties in Harrisonburg and Rockingham County a good indicator of the price for which a home will sell? No, not at all. This used to just be a hunch, but now I can back it up with data. To answer this question...
As shown above...
So, as a homeowner thinking of selling your home... the Zestimate for your home might happen be accurate - but that would be the exception, not the rule. Only 37% of pre-listing Zestimates were within 5% of the final sales price of the houses. And as a home buyer thinking of buying a house... you shouldn't necessarily expect to only have to pay the Zestimate for a house, because those values are often too low... and yet you also shouldn't necessarily be willing to pay as much as the Zestimate for a house, because those values are often too high. In the end, just understand that the Zestimate for your home (in Harrisonburg and Rockingham County) is much more likely to be inaccurate than accurate. Presumably, you wouldn't want to make a decision about the asking price for your home with a value indicator that is on average 13% different than market value. That is an average of $27,943 -- and most sellers don't want to under-price or over-price their home by that much! | |
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How Much Overlap Exists In Your Home Buying Priorities? |
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 If you have three non-negotiable home search criteria, it is important to reflect on (or at least be aware of) how much overlap exists between these criteria. Above are two examples of this way of thinking about your home search.... The first set of buyers will likely have lots of options (large yellow overlap area) because many homes share these criteria:
The second set of buyers will likely have very few options (small yellow overlap area) because there are very few homes that share these criteria:
These are fictitious illustrations -- they don't represent the actual amount of overlap that does or does not exist based on the criteria noted above -- but you should give some thought to how small of an overlap area you are creating for yourself based on what you are defining as non-negotiable in your home search. If that area is too small, you'll have very few options to consider, and eventually you may decide to flex a bit on what you had previously considered to be a non-negotiable point. | |
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Where Do We Focus First? Selling Your Home? Or Buying The Next Home? |
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 If you are getting ready to sell your home AND buy your home, it can sometimes be difficult to determine where to start... Do you start by finding a house you want to purchase? Or do you start by listing your home for sale? I would suggest that you start with whichever you anticipate will be the most difficult part of the two step process. If it will be difficult to sell your home (because of price, location, layout, features, age, etc.) and it will be at least slight easier to buy the next one (plenty of viable options are listed for sale) then you are likely best off starting with listing your home for sale. Work to get the more difficult half of the transition underway by getting your current home under contract, and then work on the easier side of the transition. If it will be more difficult to buy the next house (because of the specificity of your housing goals, or because of low inventory levels, etc.) and it will be at least slightly easier to sell your current home (because the property type, location or price are in high demand) then you are likely best off focusing first on finding the home to buy -- and then listing your home for sale. There are plenty of nuances we can discuss further to formulate a plan for attempting to simultaneously sell and buy -- but as a general rule of thumb, you'll be best off to start with the harder half of the transaction. | |
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New Condos For Sale at Founders Way in Harrisonburg, Virginia |
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 New condos are now being offered for sale at Founders Way in Harrisonburg, Virginia. These brand new condos, just minutes from downtown Harrisonburg, offer low maintenance living at its best, in close proximity to dining, shopping, the JMU campus and more! Make your selections today for your cabinets, granite countertops, flooring, paint color and more! Condos at Founders Way feature an open floor plan a large primary bedroom suite and a second bedroom or office with walk in closet and attached bathroom, plus a covered porch! Enjoy high-speed internet access and cable service! Find out more about Founders Way by visiting FoundersWay.com.
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How Early Should You Make Loan Application? |
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 Here are the three sequences I see buyers follow most frequently....
As Late As Possible
Incredibly Proactive
A Reasonable Middle Ground
I try to encourage all of my clients to at least be in the "reasonable middle ground" sequence as outlined above. This gives them a firm idea of what they can afford and how a home price will compare to a loan payment. This also allows them to make a stronger offer, already having a pre-qualification letter in hand. I strongly discourage my clients from following the "as late as possible" sequence as outlined above. This doesn't help them make the best decisions about which houses to pursue, how far to negotiate, etc. This also doesn't allow us to make as strong of an offer on a house. Occasionally, one of my clients will fall into the "incredible proactive" sequence as outlined above, and wow, this makes the financing process a joy to work through! These buyers have already done so much of their work with the lender before even thinking about which house to buy -- which then allows them to focus on buying, negotiating, inspecting, etc., rather than be bogged down in the process of securing their mortgage. Let me know if you have questions about how I have described these sequences -- and let me know if you would like a few recommendations for lenders in the Harrisonburg area. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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