Market
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Sales Activity Was Slowing For Two Months But Has Picked Back Up Again |
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 The first few months of 2020 were strong -- stronger than 2019 and seeming to indicate that 2020 was going to be a solid year of local home sales. And then, COVID-19. Contract activity started to decline in March -- and by April 18, the number of contracts signed in 2020 had fallen behind the number signed during the same timeframe in 2019. So, it seemed that COVID-19 might at least somewhat slow down our local real estate market. But, then June! During the month of June, contract activity steadily ramped up, and by June 19th the cumulative number of contracts signed in 2020 (Jan 1 - Jun 19) had pulled back ahead of the same timeframe in 2019. So, it seems that COVID-19 might not lead to a net decline in the amount of home sales activity in Harrisonburg and Rockingham County! | |
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This Could Be A Good Time To Sell A Townhouse Under $200K, Built Since 2000, In The City of Harrisonburg |
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 If you have a townhouse to sell in the City of Harrisonburg, built in the past 20 years, that would be priced under $200K, this may be an excellent time to sell it. Here's why... Over the past three months, there have been (15) sales of such townhouses -- so, around (5) buyers per month are buying townhouses built in the past 20 years, priced under $200K in the City of Harrisonburg. Not surprisingly, then, there are (9) such townhouses currently under contract. But wait, what!? There is only (1) single solitary townhouse for sale in the City of Harrisonburg under $200K right now that was built in the past 20 years. So -- if you own a townhome in Avalon Woods, Beacon Hill, Harmony Heights, Liberty Square, etc. -- this might be an excellent time to sell. Email me to chat about your townhouse and its value in the current market. | |
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What To Expect For The Second Half Of The Year In Our Local Real Estate Market |
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 I spent some time this past weekend cleaning up my crystal ball - oh wait, no, I was cleaning my garage. My crystal ball is always ready and waiting to convincingly and accurately predict the future of our local real estate market. Or something like that... But really -- here are several of my predictions for the second half of 2020... MORE HOME SALES - The pace of contract signing (the earliest indicator of market activity) lagged behind (2020 vs. 2019) for quite a few months this year but has now broken through last year's trajectory and we're seeing more cumulative contracts signed in 2020 as compared to 2019. So, it doesn't seem that COVID-19 will end up resulting in a net decline in home sales in our local area. HIGHER SALES PRICES - Even as contract activity lagged behind in 2020, the median sales prices of those homes that were selling kept on climbing. We are not seeing any indicators on the horizon at this point that would seem to cause home prices to flatten out our decline. CONTINUED LOW MORTGAGE INTEREST RATES - I certainly didn't think we'd keep hitting new low after new low for mortgage interest rates in 2020, but indeed, that has been the case. The average 30 year fixed rate mortgage interest rate is 3.07% as of the moment I am typing this. Wow! I certainly don't expect them to be any lower than this, but I think they'll likely stay below 4% for the rest of the calendar year. SPEEDY SALES - Homes are selling faster and faster and faster. The "median" days on market has declined 37% over the past year from 24 days to 15 days. So, buyers have to be ready to jump on new listings quickly. LOW INVENTORY LEVELS - There were some times over the past few months when I thought we might start seeing inventory levels creeping up -- because sellers would unexpectedly need to sell, or because buyers weren't able to or interested in buying -- but neither of those happened. I suspect we will keep seeing very low inventory levels throughout the remainder of the year. OK - in the end - my predictions don't point to anything particularly surprising or unexpected - but perhaps that is the main take away. I don't think we are going to see anything drastically unexpected or surprising in our local housing market in the 3rd and 4th quarter of this year. | |
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Contracts Shoot Skyward In June, Sort Of Like Fireworks |
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 After three months in a row (March, April, May) of slow contract activity (compared to last year) the pace of contracts being signed shot skyward in June to easily eclipse last June, as well as March, April and May of both years! This is a good indicator that we are not likely to see much of an impact on our local real estate market based on COVID, other than that it affected the timing of when these sales (contracts) were coming together. Contracts came together much later than usual this year. Happy Independence Day! | |
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Detached Homes Under $250K In The City of Harrisonburg Are A Hot Commodity |
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 If you are selling a detached home in the City of Harrisonburg, priced under $250K, you are likely to have quite a few early showings. If your home is prepared well and priced well, it would not be uncommon to have 10+ showings on the first day that it hits the market. A few tips for such home sellers...
Happy home selling if your home is priced under $250K in the City. It will likely be a whirlwind of early activity! | |
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Pace of 2020 Buyer Activity Recovers During June |
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 Remember where we were back at the beginning of June? Home buyer activity was lagging behind in Harrisonburg and Rockingham County -- with 2020 buyer activity (ratified contracts) down 5.44% as compared to 2019. Not any longer! As of the end of last week, there have been 1.11% more contracts signed in 2020 as compared to 2019. So - the Spring was slower and stranger than usual, but it appears that 2020 may turn out to be an even stronger year than 2019 for home buyer activity in our local area. | |
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Virginia Housing Market Not As Vulnerable As Most |
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 The National Association of Home Builders recently took a look at which states' housing markets were more (and less) vulnerable for a downturn brought on by the COVID-19 pandemic. The states that are the most vulnerable are those with "state economies heavily reliant on leisure, entertainment, retail and personal services". So, basically, the jobs that folks have in Virginia tend to be less vulnerable to a downturn brought on by COVID-19 than in most other states across the country. Read more about it here. | |
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Boom, Just Like That, 2020 Buying Activity Is On Par With 2019 Trend |
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 Buyer activity has been lagging this year -- in fact just a few weeks ago there were 5.5% fewer contracts signed in 2020 as compared to 2019. But, not any longer! As of the end of the day yesterday (June 18) the pace of buying activity in 2020 is right back on track with 2019. OK, fine, less one home. Jan 1, 2019 - Jun 18, 2019 Contracts = 695 Jan 1, 2020 - Jun 18, 2020 Contracts = 694 It seems that COVID-19 might have even less of an impact on overall market activity than I had thought. Stay tuned to see if 2020 will cross over to surpass 2019 in the coming weeks. | |
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Having Difficulty Finding Homes Under $200K? Here Is Why! |
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 The blue line shown above is showing you the change in the number of homes for sale under $200K in Harrisonburg and Rockingham County. As you can see, this segment of our housing market has offered fewer and fewer choices at any given time over the past few years. Some further explanation and caveats...
So, if you are having difficulty finding a home to buy under $200K, maybe now you can see why you are having this experience! Be ready to pounce on any new listing of interest and you better already have a pre-approval letter in hand from your lender! | |
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Local Home Prices Still Rising Despite Slightly Fewer Home Sales |
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 Happy Monday Morning! We're nearly halfway through the year now, and it has been a year like no other when it comes to our local real estate market and in so many other ways. Read on for an overview of our local housing market, or click here to download a 28-page PDF with all of the latest local housing market trends. But before we dive into the data, take a few minutes to check out this custom-built cedar log home on 2.81 acres one mile from Sentara RMH by visiting 3193TaylorSpringLane.com. Now, on to the data...  So much to point out here as this has been anything but a "normal" year...
OK - that was a lot of words to absorb - let's get to more visuals and fewer words. Relax and sip your coffee as you scroll through the following trends - knowing you'll be smarter, even if a bit more confused, by the time you get to the bottom of this overview...  This has been a year of bests and worsts! Home sales were on fire in January and March (best months ever) and were dreadfully slow in February, April and May (worst months ever) - leaving no clear indication of whether we should be extraordinarily excited or depressed about 2020. Maybe we are experiencing this same dichotomy as we think about other aspects of 2020 as well!? :-) But when viewing these bests and worsts piled on top of each other...  The positive impact of the strong months (Jan/Mar) have almost entirely made up for drag of the slow months (Feb/Apr/May) bringing our year-to-date total of home sales up to 479 -- only slightly behind where we were a year ago. But even if those year-to-date numbers are rosy, the most recent two months of slower sales do impact the longer-term trajectory...  We can get excited about the top graph above -- in green -- as the median sales price is definitely still on the rise. The bottom graph (above, in orange) does show that the annual pace of buyer activity is starting to decline based on slower than normal sales in April and May. We may yet see this bounce back up depending on how June and July and August go, so stay tuned... And speaking of how future sales will go -- we ought to take a look at contract activity...  Contract activity is (clearly) a leading indicator for closed sales. Above you'll note that March and April of 2020 (116, 120) were much slower than last year (132,158) but we did see an increase in May contract activity. If we continue to see another increase in contract activity in June, then perhaps the surge of contracts being signed will just have been later in 2020 than in most other years. And if you're wondering why contract activity has been lower than usual, here is one reason for it...  Inventory levels (the number of homes on the market for sale at any given point in time) continue to decline. As such, buyers are finding fewer (and fewer) options of homes to buy. This has been a steady trend (lower inventory levels) over the past few years and the fact that inventory levels are still dropping tells me that slower sales is a result of fewer sellers selling more than a result of fewer buyers buying. The speed at which homes sell also reinforces that conclusion...  As shown above, two out of three homes are under contract within one month of hitting the market for sale. Beyond that, the median days on market for all homes that have sold in the past year -- was 15 days! So, there are fewer homes for sale at any given time, and homes are selling more quickly than ever -- indicating that buyers are still out there ready to buy -- we just need some sellers ready and willing to sell! And finally, some big picture economic indicators that are great and awful...  We are experiencing the lowest mortgage interest rates -- ever! Several of my buyer clients have locked in 30 year fixed mortgage interest rates below 3% (paying a point) but even without paying a point, the average rate at the end of May was only 3.15%! Yet at the same time, the unemployment rate (which had been trending lower and lower and lower) shot up from 2 point something up to 10.8% in April. This is likely at least somewhat temporary - and seems to affect folks renting homes more than those buying homes - but it is still not a great indicator of the health of our local economy. I'll be following this trajectory close over the next few months. OK - that brings your Monday morning snapshot of our local housing market to a close. And yes, I'll forgive you if you didn't get around to reading this until some other time than Monday morning. A few quick out takeaways...
If you're thinking about buying soon, or selling soon, let me know if you'd like to chat more specifically about your situation and goals. I'd be happy to help you with our potential purchase or sale. You can reach me most easily at scott@HarrisonburgHousingToday.com or by calling/texting me at 540-578-0102. Have a great week! | |
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Gap In 2020 Home Buyer Activity Starting To Close? |
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 Welcome to June! It seems that the pace of home buying activity might (??) be starting to pick back up again during June...
Give it a few more weeks to know for sure, but it seems that slightly more buying (and selling) is happening as we have started rolling through June. | |
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Harrisonburg Area Home Sales Slow In May |
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 A bit later this week I'll take a full look at our local housing market and publish my full market report. Before I get to that, though, I thought I'd take a quick peek at the pace of sales in May. As you can see above...
Stay tuned for further analysis of our local housing market, but yes, home sales did slow down quite a bit in May. | |
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At Start of Phase Two the Pace of 2020 Contract Signing Is Still Slowing |
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 Welcome to Phase 2 in Virginia, folks! :-) Here's a quick summary of what is changing...
So, how about it, home sellers -- are you ready to put your homes on the market? I am confident we'll have very few 50+ person showings... ;-) As shown above, the pace of home buying (contract signing) has slowed over the past month.
I have theorized for a few weeks now that this slow down in buyer activity is a result of fewer sellers being ready to sell as opposed to fewer buyers being willing or able to buy. If that is the case, will this new phase mean more sellers will sell and thus more buyers will buy and thus that we'll see the 2020 trajectory start to catch back up with 2019? Maybe. We'll wait and watch and see together. Happy Friday! | |
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High End Home Sales (Incredibly) Strong In 2019 |
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 High end home sales (over $600K per this analysis) have been quite strong over the past five years. To put it into context...
Also of interest is if we look at an even higher price point...  The graph above shows home sales over $750K and as is evident, we usually see only 1 or 2 home sales per year in this price range -- but in 2015 that surged to 8 home sales, and last year it surged again, up to 10 home sales! I suppose it is also important to note that these price ranges are a small portion of our local housing market. In 2019...
Thus far in 2020, this high end segment of the market (over $600K) seems to be performing similarly to 2019 -- though the $750K+ market seems to be returning to normal level after an extraordinarily strong 2019. | |
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Are Some Newly Listed Properties Already Under Contract When Listed For Sale? |
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 A question from a reader... "I have noticed several properties that sold within 3 to 10 days. The quick selling properties appeared attractive in the photos on their websites and the asking prices seemed realistic. I heard a rumor that some of these properties were already sold before they were even listed...that the listing/offering was a formality." I have only very occasionally found that to be true. From time to time, a property will be entered into the MLS as a new listing and then will be immediately marked under contract. This will often be accompanied by language in the remarks (public remarks or internal agent remarks) to indicate that the listing was "entered for comp purposes" or "sold on a one time showing." This language would, indeed, indicate that the property in question was already under contract when it was listed for sale -- but I'm not seeing that very often in our local market. More often than this, I am seeing a new listing that goes under contract quickly that often...
These new listings that go under contract within just a few days are almost always NOT already under contract when they hit the market -- but because they are prepared well, priced well and marketed well -- they go under contract very quickly in this current market with very few homes for sale. So, no, I don't think very many homes are already under contract (or sold) before they come on the market - though it might feel that way sometimes with how quickly homes are going under contract! | |
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Are Home Sellers Accepting Offers Contingent On The Sale Of Homes Not Yet Under Contract? |
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 Based on the analysis above, it would seem that sellers are not (in almost all cases) accepting home sale contingencies unless the home that must be sold is already under contract. Here's the logic....
It would seem that most buyers are likely waiting to make offers until they have their own properties under contract (thus eliminating the need for the kickout clause) AND/OR most sellers are not accepting offers with home sale contingencies unless the buyer's house is already under contract (thus eliminating the need for the kickout clause). If you are a buyer, I would certainly suggest the strategy outlined above (and the only one that is apparently working with sellers right now) --- get a contract on your house and THEN make an offer on the property you would like to purchase! | |
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The Drop Off In Real Estate Activity Has Not Been Drastic |
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 In talking to my dad yesterday, he reflected that it seemed like the drop off in real estate activity had not been drastic. I agreed. We have seen somewhat of a decline in real estate activity (buyers buying, sellers selling) but it has not been nearly as significant as I thought it would be a few months ago when COVID-19 started having more of an impact on our daily lives. I've been taking a look at cumulative buyer activity each week for the past month or so to see how local market dynamics are changing. As shown above...
So, yes, buyer activity has dropped off a bit in 2020 - but it has not been drastic. | |
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All 2400 Square Foot Homes Are Not Equal, Per Buyers and Appraisers |
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 So -- if your neighbor's 2400 SF, circa 2000, 4 BR, 2 BA home just sold for $300K... Then it's probably reasonable to think that your 2400 SF, circa 2000, 4 BR, 2 BA home will also sell for $300K, right? Well, maybe -- but maybe not! Consider the possibility that....
These two homes will not be seen as having an equivalent value -- not by potential purchasers and not by an appraiser. Above grade square footage has a higher value attached to it -- both specifically by appraisers, and generally by purchasers. Even if all of the other factors (condition, age, location, bedrooms, bathrooms) are the same between two houses, if one has a significant portion of the square footage in the basement then it will be seen as less valuable than the home that has all of its square footage above grade. | |
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Homes Have Never Sold Faster Than They Are Selling Right Now! |
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 OK, admittedly, I was only able to look back 20 years -- but still -- I think it is fair to say that... Homes Have Never Sold Faster Than They Are Selling Right Now! As you can see after the real estate boom of 2003 to 2006, the time it took for homes to sell (median days on market) got to be as high as four (plus) months and stayed there between 2008 and 2011. Since that time, homes have been selling faster and faster -- largely due to the demand for housing increasing steadily and the supply of homes declining steadily. In 2018, the median days on market dropped below one month -- and it has continued to decline in 2019 and 2020. The current "17 days" in 2020 means that half of the homes that sell in Harrisonburg and Rockingham County are under contract within 17 days of being listed for sale -- and the other half of the homes that sell take longer than 17 days. It is certainly a fast paced world we live in these days! Buyers have to be ready to move quickly when a new listing of interest hits the market! | |
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Home Buyers Keep On Buying |
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 You almost have to squint to see major differences between the trajectory of each of these lines over the past few years. The three lines above are showing the cumulative number of buyers signing contracts at any given point in the year. Looking back to the middle of March, just when we were starting to see effects of COVID-19 on our daily lives, the pace of contract activity in 2020 was ahead of the past two years... Jan 1, 2020 - Mar 15, 2020 = 265 contracts Jan 1, 2019 - Mar 15, 2019 = 242 contracts Thus, as of March 15, buyers were 9.5% ahead of last year's pace. Now, two thirds of the way through May, things have flipped flopped... Jan 1, 2020 - May 20, 2020 = 536 contracts Jan 1, 2019 - May 20, 2019 = 565 contracts Thus, as of May 20, buyers are 5% behind last year's pace. So... 1. Home buyer activity has slowed in 2020 over the past two months. 2. Home buying activity in 2020 is only 5% behind last year! I expect we'll see things start to speed back up at some point -- but it hasn't seemed to have started yet... | |
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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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