Inventory
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Last Call for City Homes Under $200K |
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 There are fewer and fewer homes for sale under $200K in Harrisonburg and Rockingham County. Here's what the inventory numbers have looked like over the past few years....
That has now fallen a bit further, to 93 homes for sale under $200K in the City and County -- but even more interesting is where those homes are located....
And it probably woulnd't surprise you that only 5 of the 21 City homes under $200K are actually single family detached homes -- the other 16 are townhouses, duplexes or condos. Prices are rising -- which makes homes under $200K harder and harder to come by, especially in the City. | |
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Zero City Townhomes For Sale, Without Tenants, Built in the Past 10 Years |
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 Well -- I was going to remind you of this great web site or exploring our local townhouse communities where you might consider purchasing a home or investment property.... HarrisonburgTownhouses.com And then, in the process of poking around to see what types of townhouses are currently on the market, I discovered that.... There are ZERO (zip, zilch, nada) townhouses currently for sale in the City of Harrisonburg, that exist (not "to be built") that have been built in the past 10 years, that do not have a tenant living in them. That long sentence might make it seem like I am looking for a very narrow category or properties -- but I don't think I am. If a buyer wanted to buy a City townhome built in the past 10 years, and close on their purchase in the next two months, they would need the townhouse to already exist (not something that requires another 4 - 5 months of construction) and they would need the townhouse to not be tenant occupied. There are some townhouses on the market at The Townes at Bluestone that are under construction and could be available in a few months. There are some townhouses on the market in Beacon Hill (and on Norwood Street) that currently have tenants in them. But as far as recently (past 10 years) built townhouses ready for an owner occupant to move in -- buyers currently have ZERO options -- yet another example of how low our inventory levels have become. | |
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If you are planning to buy a home for the holidays, do so soon, before all of the stores sell out |
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 Admittedly, a new home would be quite an expensive Christmas gift -- but still -- I'll press on.... As shown above, inventory levels are getting lower than ever before -- except, perhaps, decades ago when the local population was smaller? My data only goes back about 10 years. There are currently 315 homes for sale in all of Harrisonburg and Rockingham County -- a significant 24% decline from a year ago -- and a 44% decline from two years ago. When might things get "better" you ask? Well, hard to say! We're likely to see further declines over the next month or two -- maybe down into the 200's??? Come March, we should start to see inventory levels (hopefully!) increase again. | |
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Aha! This is why there are not not enough homes for sale! |
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 FYI -- yes, I now see I have a double "not" in the title of this article. No, I did not intend for that to be there, but I'll leave it there for now to see who is paying attention. ;-) Thanks, Nate, for pointing me to this insightful article at MarketWatch... There's not enough homes for sale. Here's why to blame. Here is a summary of the reasons why we're lacking inventory:
And, the author's ideas for how buyers can respond to the situation:
It's a great article -- read it all here -- and I think much or most of what they are talking about from a national perspective applies very directly to the Harrisonburg and Rockingham County housing market. | |
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Should You Take Your House Off the Market for Winter? |
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 In some ways, NO, you should NOT take your house off the market -- because there is a historically LOW number of homes for sale right now. And yet, still, some folks will take their homes off the market for the winter. Our local MLS requires a house to be off the market for 90 days before the "Cumulative Days on Market" statistic resets. So, if you take your house off the market today, you could put it back on the market on March 8, 2018 and have that statistic reset. During these 90-ish days of being off the market, we will want to talk about price, condition and marketing....
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Fewer and Fewer Homes For Sale in City of Harrisonburg |
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 The number of homes for sale in the City of Harrisonburg keeps dropping. That's not to say that homes aren't selling -- a total of 378 homes have sold in the City of Harrisonburg during the first 11 months of the year -- putting us at a pace of 34 home sales per month. But the number of homes available to buyers continues to decline -- now down to 75 homes for sale, after having fallen below 100 homes for sale for the first time at the beginning of this year. Here's a bit longer of a context....
Of note, those 75 current listings are comprised of:
If you're looking to buy a home in the City of Harrisonburg it might be difficult to find a home that is a perfect fit or you given a very limited supply of homes for sale. And when a home does come on the market that works for you, it is likely to sell quickly. | |
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Contracts slow in November 2017 within context of declining inventory |
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 In the first 21 days of November, this year, 61 buyers have signed contracts to purchase homes in Harrisonburg and Rockingham County. Compare that to last year, when 72 buyers had signed such contracts, and you'll note that there has been 15% decline in contract activity when examining this relatively small window of time. Why might this be happening? Perhaps it is because buyers have fewer and fewer options of homes to purchase. Also shown above, you'll note that in early November of this year, buyers had 356 listings from which to choose -- and last year they had 480 choices. This marks a 26% year over year decline in options for buyers. I am hopeful that we'll see this inventory situation turn around at some point, but until or unless it does, buyers are not likely to have very many options for homes to purchase. | |
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Housing Inventory In Short Supply Under $200K, $300K |
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 No new news here -- I've been saying it for some time -- fewer and fewer options exist for buying a home in our city/county for less than $200K, and even under $300K. But this visualization (click here for a larger version) was inspired by a comment from Brad - thanks Brad! We know that housing inventory, overall, is at a 10+ year low right now, but Brad observed that not all price ranges are created equal. As (somewhat clearly) shown above, the $300K - $400K and $400K+ price ranges have maintained a relatively stable/healthy supply over the past ten years -- and the under $200K and $200K-$300K price ranges have been the most significant declines. | |
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How Low Can Inventory Levels Possibly Go? |
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 Today, there are 364 homes for sale in Harrisonburg and Rockingham County. I have been tracking this data for almost 10 years now and there has never (NEVER) been a time when we have had this few homes for sale. Wow! | |
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Housing Inventory Shortages in City of Harrisonburg Should Not Be Surprising |
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 If only we could have seen this coming. :-) Just kidding -- we have seen it coming. Knowing it was coming, though, didn't seem to inspire any actions to change the trajectory. As shown above, inventory levels have been steadily dropping in the City of Harrisonburg over the past five years -- or perhaps even longer -- I only have a record of the past five years. There have now been fewer than 100 homes for sale in the City of Harrisonburg for most of the past six months. How is this cured?
There is no easy way to turn this trend around -- and to have more options for City home buyers -- and until this does change, it can be quite challenging for buyers to find a home they want to purchase in the City. | |
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If you think housing inventory levels are low now.... |
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 If last year is any indication, get ready to see inventory levels falling over the next few months almost as fast as the leaves are falling off the trees. In all seriousness, though, many buyers these days are having a difficult time finding a home they are excited to purchase -- which is not surprising, as inventory levels have declined 27% over the past year. But it is likely to get (temporarily) worse for buyers. As shown above, inventory levels fell 34% last year between the end of August and the end of January. As such -- look at the meager supply of homes currently on the market -- and then eliminate 1 out of every 3 of those homes. That's likely where we're headed over the next few months. But here's the good news (sorta, kinda, with limitations) -- if you are thinking of selling your home in the next few months, you may have quite a few buyers angling to purchase it if it aligns well with what they are looking for in a home. The sorta/kinda part is that you'll only be good shape if you don't have to buy as well. After all, if we quickly sell your home (because of low inventory levels), but can't find something for you to buy (because of low inventory levels), then we still have problems. Who is the indisputable winner in today's local housing market? The home seller who does not have to buy a home as well. :-) | |
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How much of the City of Harrisonburg single family housing stock sells in any given year? |
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 OK -- I'll point out, from the start, that I'm making things a bit more complicated here. I'll partially blame Derik, as he asked the question. OK - the graph above, is the same one I posted yesterday -- a look at how many single family homes exist in the City of Harrisonburg in a variety of price ranges, based on their assessed values. But -- if that's how many actually exist -- it is probably reasonable to wonder how many homes actually sell in each of those price ranges in each year. So, here are the City single family home sales in the same price ranges for all of 2016....  You'll notice that the two graphs above don't look altogether that different. Then, to combine these two, rather than just put really little numbers (how many sell) next to really big numbers (how many physically exist) I thought I"d look at what percentage of each price segment of the City housing stock sells in a given year....  I think this makes it more helpful, though slightly less specifically meaningful absent scrolling back up and also remembering how many houses we're talking about in each given price range. For example, the chart directly above shows that:
OK -- next, a few flaws and disclaimers:
OK -- it continues -- I think it is probably necessary to try to contextualize this with "active listing" data -- to see how some of these numbers compare to what is available today for a buyer to purchase. Here is a breakdown of single family homes currently for sale....
As you can see, above, there are NOT a lot of homes for sale in the City of Harrisonburg right now. And let's see if we can flesh anything out if we break it down by how many homes are available to be purchased as compared to the overall number of homes that actually exist....
This graph might have been the one I was looking for -- at least to support my understanding of the world.... Right now -- almost 9% of the homes over $600K are listed for sale -- and 6% to 8% of homes over $400K are listed for sale in the City of Harrisonburg. On the other hand, only 3% of homes between $300K and $400K are listed for sale, only 1% of homes between $200K and $300K and less than 1% of homes under $200K are listed for sale. This would seem to be about as clear of an indicator as one could find that homes under $300K (or even better, under $200K) are in short supply and in high demand in the City of Harrisonburg. Finally, lastly, ultimately, some "overall market" stats....
Questions? Thoughts? Observations? Insights? Suggestions? Email me: scott@HarrisonburgHousingToday.com | |
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Price Distribution of Single Family Housing Stock in the City of Harrisonburg |
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 OK -- Take 2 -- Based on some feedback, in smaller price increments this time.... Forget about what actually SELLS in any given timeframe, or even what is available FOR SALE at any given point in time. Let's get down to what housing actually EXISTS in the City of Harrisonburg. The graph above shows the number of single family detached homes (Use Code 006 in the City's property database) that exist in the City of Harrisonburg in (120 different price ranges. The homes are sorted into these price categories based on their 2017 assessed values. So -- what surprises you? If more single family homes are to be built in the City, what price range should they fit into? | |
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Single Family Housing Stock in the City of Harrisonburg |
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 Forget about what actually SELLS in any given timeframe, or even what is available FOR SALE at any given point in time. Let's get down to what housing actually EXISTS in the City of Harrisonburg. The graph above shows the number of single family detached homes (Use Code 006 in the City's property database) that exist in the City of Harrisonburg in five different price ranges. The homes are sorted into these price categories based on their 2017 assessed values. So -- what surprises you? If more single family homes are to be built in the City, what price range should they fit into? | |
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Single Family City Homes Under $200K (even $300K) in Short Supply |
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 Some of these numbers are hard to fathom.... [1] Even though (65) single family homes sold between $100K and $200K in the City in the past year -- there are only (5) such homes available for purchase today!?! [2] Likewise, even though (83) single family homes between $200K and $300K sold in the past year, only (17) are available today. [3] The under $100K market is largely gone for single family homes in the City -- no surprise there. [4] While not shown specifically above (additional math required) a full 79% of single family home buyers in the City in the past year spent less than $300K. [5] Only 9% of City single family home buyers spent over $400K. | |
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This is not a balanced real estate market |
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 Most housing market analysts consider six months of inventory (active listings) to be an indicator of a balanced market (between buyers and sellers). The "BUYERS" trend line above is illustrating how many buyers are buying in a six month period. The "SELLERS" trend line above is illustrating how many sellers are in the market (active listings) at any given time. Over the past four years we have seen a steady increase in buyers and a declining number of sellers. In June 2016, these two trajectories crossed, and there was no turning back. There are now many more buyers buying in a six month period than there are homes for sale -- creating a seller's market. Instead of having a six month supply of homes for sale, we now have a four (3.95) month supply. Of note -- it is not a seller's market in every price range, in every location, for every property type -- but overall, we are definitely seeing a seller's market. Find out more about our local housing market by clicking below for my monthly market report.  | |
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Limited Options for New Townhouses in Harrisonburg |
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 One of the reasons why the under $200K market is inventory-challenged right now is because there is very little new construction happening in this price range. Over the past 10-15 years we saw many new townhouse developments that (at the time) fell into that price range, including:
Now, however, there are significantly fewer options available when it comes to newly built townhouses in or near Harrisonburg, under $200K....
I think a considerable opportunity exists for a townhouse developer to build new, $170K - $190K townhouses in the City of Harrisonburg -- if it can be done! | |
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58% Drop in Under $200K Listing Inventory |
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 One of the most striking changes in inventory levels has been the "under $200K' market, where we have seen a 58% decline in the number of homes for sale. A small part of this is the slow and steady increase in the median sales price -- causing some homes to no longer fall within this price bracket. Another significant reason for this decline is a slow and steady increase in the number of people trying to purchase homes in this price range. The final component is the lack of new construction in this price range. Increasing demand and decreasing supply is usually addressed via builders jumping in and starting to build new homes (or perhaps townhomes, in this case) to help bridge this gap between low supply and high demand. If we continue to see increasing demand, decreasing supply, and no new construction, we may start to see faster than normal increases in the sales prices of these properties as buyers compete for a slim number of listings. Read more about our local housing market via my most recent monthly market report....  | |
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How many homes will you really be choosing from? |
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 If you are entering the market to buy a home, the number of homes you will have to choose from will vary widely based on what you are looking for in a new home. Some buyers have a very narrow scope and find themselves on a prolonged hunt for what seems to be an elusive or mythical home. Some buyers find plenty of options, evaluate quite a few, make a decision and move forward with an offer. However -- keep in mind that as you consider the 403-ish homes currently on the market for sale, that some of them have been on the market for 3 months, 6 months, 9 months or even longer. The freshest of fresh listings are those that have come on in the past 30 days -- which (this time of year) is less than 100 of the 403-ish homes currently listed for sale. Depending on your time frame for buying, and the narrowness of your scope, sometimes it makes sense to quickly evaluate the current options -- and then to wait and see what new and exciting listings will be coming on the market in coming days and weeks. Steps to get started include talking to a lender to get a sense of your target price range, and then chatting with me (in person, by email, by phone) so that I can also be keeping an eye out for suitable properties for you. Learn more about the home buying process at....  | |
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Just how low are housing inventory levels right now? |
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 Low, low, super low! I talk with some regularity about how low inventory levels are right now This is not just a seasonal thing. Inventory levels don't get this low every year at this time and then rise again in the Spring and Summer. In fact, as shown above, for the past there years at this time there have always been between 539 and 550 homes for sale -- that is a pretty consistent track record. This year, however, there are only 405 homes for sale -- marking a 25% decline in the number of homes for sale. it gets worse by price range, by the way. There are 44% fewer homes on the market in the "under $200K" price range right now as compared to a year ago. | |
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Scott Rogers
Funkhouser Real
Estate Group
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scott@funkhousergroup.com
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