Inventory
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Local housing inventory bucks historical trend |
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 Summer is not quite over yet (100 degrees today, I hear) --- but the local housing market is already showing some signs of fall --- and that's a good thing! Typically our local housing inventory continues to increase through July before starting to decline heading into the fall. This year, however, we're seeing a decline in local housing inventory earlier than we typically do. Perhaps it is the result of more buyers making buying decisions. Perhaps fewer sellers are trying to sell. Whatever the reason, it is helping to (slowly but surely) bring more balance back to our local housing market. | |
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Local housing inventory hits four year low |
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Yes, you heard me correctly -- there are fewer homes on the market than we have seen anytime in the past four years.  The inventory data above is current as of a few days ago when I published my monthly market report. At that time there were 665 homes on the market --- fewer than anytime in the last four years, including any of the winter months over the past few years. Inventory is starting to pick up a bit (678 as of this morning) but there are still fewer homes on the market than we've seen in a while. This certainly helps sellers, as there is less competition -- though it is certainly still a buyer's market. | |
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Punxsutawney Phil must have meant winter-like levels of housing inventory, not winter-like weather |
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It sure doesn't seem that we're having six more weeks of winter weather. But we certainly ARE having (at least) six more weeks of winter-like levels of housing inventory. In fact, current inventory levels (664 homes) are lower than anytime in at least the past four years. Even in the coldest of months over the past four years, we have not seen inventory levels so low. Here's some perspective.... March 2008 = 814 homes for sale March 2009 = 838 homes for sale March 2010 = 863 homes for sale March 2011 = 807 homes for sale TODAY = 664 homes for sale OK, seriously, why the winter-like levels of housing inventory? Inventory levels fell below 700 for the first time in a long while back in December, and they are not yet showing any signs of recovering. | |
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Sellers, sellers, where have you gone? |
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As I commented in my monthly market report earlier this week, inventory has declined significantly (15%) over the past year!  Why is inventory dropping so much??? I have a theory.... First and foremost, I believe there are quite a few homeowners who are deciding to lease their properties instead of selling them, after having had little success in the sales arena. I have seen this quite frequently over the past 6 months, and it makes sense --- leasing the property can provide a stream of income with which to pay the mortgage payment. Leasing a property also gets the homeowner down the road a bit (perhaps a year or two) after which they can try to sell again in a market this has hopefully improved. Second, I believe some sellers are either pulling their property off the market, or never putting them on the market, because they don't believe they can sell their home right now for a price that would either: a) make them happy, b) payoff their mortgage, or c) allow them to move into their next home. Finally, after six years of steady increases in foreclosures in our local market, that trend finally reversed itself in 2011. There were 17% fewer foreclosures in 2011 as compared to 2010 -- which means there are fewer bank owned homes coming on the market. We'll have to wait a few months to see, but I think it's quite possible we'll continue to see much lower inventory levels than we saw last year. | |
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The competition is stiff, oh wait, no it's not! |
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 In preparing to list a home for sale, I met with my clients and we examined the competition that their home would have given its characteristics (size, location, age, price). We were surprised that there were not too many comparable homes (at all) on the market right now. If someone wants to buy this home, they won't be comparing it side by side with others that are quite similar in size, location, age and price. One reason why some homes for sale don't have as much competition is because of the overall decline in the number of homes listed for sale. Inventory levels have dropped 16.5% over the past year, and there are now only 657 homes (single family, townhomes, condos) on the market in Harrisonburg and Rockingham County. This is good, folks, especially if you are ready to put your house on the market and it is in a decent neighborhood, has been well maintained, and you are able to price it reasonably given market conditions. If you'd like to examine your competition, just call (540-578-0102) or e-mail me (scott@HarrisonburgHousingToday.com) and we can set up a time to meet. | |
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Inventory levels drop to 45 month low (at least) |
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 Each month inventory levels drop at the beginning of the month -- as quite a few listings expired on the last day of the prior month. So it's possible that today's incredibly low inventory levels (744 properties) will climb back up by a bit over the next few days. However, as things stand now, these are the lowest inventory levels we've seen in almost four years. It's actually probably quite a few more months than that, but I have only been tracking inventory levels for the past 45 months. What does this mean? Hope for further balance in the local housing market -- as the number of hopeful seller decreases, and the number of actual buyers increases, we'll return to a more balance market. | |
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An analysis of current residential listing inventory |
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Click the image for an easier to read PDF....  | |
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Buying options under $200K keep increasing, but otherwise, your options are vanishing |
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I often hear that there are too many homes for sale (sellers tell me this) and that there aren't nearly enough homes on the market (buyers tell me this). Let's examine how inventory levels have changed over the past several years.....  It may be a result of an overall decline in median sales prices (home values), but whatever the reason, the number of options under $200K keeps increasing. Three years ago, you would only have had 263 homes to choose from in Harrisonburg and Rockingham County -- but that has now ballooned to 447 listings.  Listing inventory between $200K and $300K has gradually declined over the past several years, though it did surge upwards in the spring and summer of 2010. We may again see a surge as homeowners prepare to list their homes for the summer 2011 buying season.  The decline in $300K to $400K listings has been a bit faster than in the $200K to $300K range (32% versus 27%).  Housing options over $400K have drastically declined over the past several years, with an overall 37% decline. This is likely an appropriate decline relative to the overall decline in the number of buyers in the market. Whatever the price range, we will likely start to see a surge in homes listed for sale as we continue through spring and summer of 2011. Hopefully we will not reach past seasonal peaks of 1,000+ homes as we did in mid-2010. | |
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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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