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Just As Many Homes Are Selling Over Asking Price Now As Compared To In 2021 |
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![]() This statistic might surprise you. It surprised me. Just as many homes are selling over the asking price now (in the past 90 days) as compared to in 2021. And, technically, slightly more are selling over the asking price now as compared to in 2021. Sometimes it seems that the market might be "slowing down" in some ways... with fewer showings and/or fewer offers in the first week of a house being on the market. But then, you see that we're still seeing about half of homes selling for more than the list price and it doesn't seem like things are slowing down at all!?! | |
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Is The Last Item On Your Back To School Shopping List... A House? |
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![]() Happy first (or second) week of school! It's at this time of year -- over the next few weeks -- that we often see a surge (or mini-surge) of home buying activity. Summer vacation is over, school is starting back up, and some folks will find themselves ready to make a move... buying for the first time, or buying a new home to upsize or downsize. Home sales activity is often topsy-turvy in the summer, affected by everyone's summer plans. Sellers put their houses on the market based on when they are around to prepare it for the market. Buyers go see houses and make offers based on when they are around to do so. But now, people will start settling back into their normal routines, and many may decide this is the time to contract to buy a home. None of this, of course, is based on hard, cold, data... just a general observation I have made over the years. We'll see what the numbers actually show as we move through the next month or two. If you're engaged in school, as a student, a teacher, a parent of a student, or otherwise... may your school year be off to a good start! | |
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Harrisonburg Housing Market Still Showing Strength Despite Some Signs Of Slowing |
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![]() Happy Thursday afternoon, friends! As any student or teacher will tell you, summer is almost over! 😢 I hope that you and your family had a wonderful summer and that you had at least one opportunity to sneak away... to the beach, the lake, a tropical island, a music festival, a rural AirBNB, a national forest, a campsite or a new city! One of my favorite spots to sneak away is Deep Creek Lake, MD... ![]() But getting back to business... The beautiful house on the cover of this month's market report is located at 3161 Henry Grant Hill in Preston Lake and you can find out more about this spacious home here. Each month I have a giveaway, of sorts, for readers of this market report. This month's giveaway requires a special sort of market report reader... one who also likes to run... a lot. I enjoy running and frequently participate in races put on by VA Momentum, and thus I was excited to hear they are putting on a half marathon this fall. So... this month, you can enter for a chance to win a free registration to the Harrisonburg Half Marathon, to be held on October 15, 2022! Find out more about the half marathon here. Enter to win the free race registration here. Email me and tell me I'm crazy for thinking you'd run a half marathon here. 😉 And now, after all that, let's dig in and see what is happening in our local housing market... ![]() As noted in my headline above, there are some signs that our local real estate market might be slowing down a bit. This very well may mean, though, that it slows down from going 90 MPH in a 60 MPH zone to going 75 MPH in a 60 MPH zone. The latest numbers, as shown above, indicate that... [1] July home sales were slower (140) than last July. We'll see this again on a graph in a moment. [2] Thus far this year we have seen 932 home sales, which is 4.6% more than last year. We had a record number of home sales last year, so a further increase this year is... record breaking. [3] The median sales price in July was 5% higher than last July. [4] When looking at the first seven months of the year, the median sales price has risen 11.7% in Harrisonburg and Rockingham County. So... most of these indicators are quite positive, rosy, exuberant, except the slight slow down in July. This is seen a bit more clearly here... ![]() Above, you'll note that in June 2022 we had an astronomical 188 home sales... higher than any of the past three months of June. But, then, July. In July 2022 we only saw 140 home sales, which is less than any of the past three months of July. Some might point out that looking at a single month of housing data, in a small-ish housing market, can make you think something is happening, when nothing is happening. I agree that can happen. If we smash the two months together, we find that there have been 328 home sales this June and July... compared to 322 home sales last June and July. So... maybe things are "just fine" right now, and maybe things are starting to slow, slightly. ![]() As shown above, if things are starting to slow... they're only just starting to do so, and they're doing so verrrrry slowly. The 932 home sales seen thus far in 2022 is more than we have seen in the first seven months of any of the prior four years. Perhaps when we get another month or two into the year we will see things level out a bit in 2022? ![]() Slicing and dicing the data once more, this graph (above) measures (each month) the number of sales in a 12 month period as shown with an orange line, and the 12-month median sales price (measured each month) shown with the green line. As you can see at the end of the orange line, it's possible that the overall pace of home sales is slowing a bit... but then again, maybe not. We'll need to watch this for a few more months to know for sure. Speaking of the future, our most reliable indicator of future sales is... current contracts... ![]() This one surprised me a bit. We usually see around 150 to 160 contracts signed in any given month of July. But... not this July. There were only 114 contracts signed in July 2022, which is much lower than usual, and likely means we will see a lower than usual month of closed sales in August and/or September. This falls to the category of "things that make you say hmmmm...." and this will definitely be a trend we will need to continue to monitor. Somewhat fewer buyers signing contracts might mean that inventory levels would rise a bit... ![]() Indeed, we are starting to see inventory levels creep up a bit. There are now 163 homes for sale in Harrisonburg and Rockingham County, which is a bit more than the 129 we saw at this time a year ago. It is important to note, though that these "slightly higher" inventory levels are really still VERY, VERY low. Many or most buyers in most price ranges and locations still have very few options of homes to buy right now. So, yes, inventory levels are creeping up a bit, but don't think that's necessarily giving buyers more choices... or giving buyers more leverage... at least not at this point. So... a few fewer sales... fewer contracts... slightly higher inventory levels... that probably means that homes aren't selling as quickly, right!? Well... ![]() Looking at the 12 months of home sales prior to July 2021 (a year ago) the median "days on market" for those sales was only five days. That metric has remained constant for 13 months now... and today, when looking backwards by a year, the median "days on market" is still just five days. Narrowing the focus even more, to just the 114 properties that went under contract in July 2022, we might expect to see a higher "days on market" -- and we do -- but only barely. The median days on market during July 2022 was... six days. So, homes are still going under contract very, very quickly! Finally, maybe this (below) is a contributing factor to the slight slow down over the past 30 to 45 days? ![]() A year ago, the mortgage interest rate was 2.8%. Six months ago it was 3.55%. During June and July it was as high as 5.81%, though it has started to decline now. It is quite possible that these higher mortgage rates have caused some buyers to not be able to buy any longer... or that it has at least partially dampened their enthusiasm. So, there you have it, friends. The housing market in Harrisonburg and Rockingham County is still showing great signs of strength with more sales than ever, at higher prices than ever. But... we might be seeing a slight slow down in home sales (from record high levels) and we might be seeing a slight increase in inventory levels (from record low levels). We'll have to give it a few more months to see how things continue to develop in the local market to know for sure. Until then... If selling a home is on your mind, let's talk sooner rather than later. Before you know it, we'll be halfway through fall and headed into winter. If you are planning to buy a home soon, let's start watching for new listings of interest and going to see them quickly when they hit the market. If I can be of any help with the above (selling, buying) please call/text me at 540-578-0102 or email me here so we can talk about working together to navigate your way through the ever changing Harrisonburg real estate market. | |
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Anecdotally, A Smaller Percentage of Showings Seem To Be Resulting In Offers These Days |
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![]() I don't have any data to back this up, but it seems that a smaller percentage of showings are result in offers right now. A year ago, 20 showings might have resulted in 5 to 10 offers. Today, 20 showings seems to be resulting in 2 to 3 offers. It's hard to know what exactly is driving this change... [1] Home prices are certainly higher now than they were a year ago, and maybe it's harder for buyers who look at houses to get excited about paying today's prices as compared to the prices a year ago? Though, a year ago, prices seemed pretty high to most folks as well... [2] Mortgage interest rates are certainly higher now than they were a year ago, and maybe buyers are excited about Home X at Price Y but when they run the numbers and determine Mortgage Payment Z their excitement cools? Though, they could have known that before they decided to go see the house... [3] The housing market was on fire a year ago with no signs of cooling off, whereas now some markets are seeing sales and/or prices level off or decline slightly. So, maybe buyers are a touch more hesitant to act today as compared to a year ago because there is some small amount of doubt of whether home prices will continue to accelerate upwards over the next few years? Though, a year ago, there was some doubt about whether prices would keep accelerating upwards because they had been increasing so quickly up until that time... So, it's hard to say why, but a somewhat smaller portion of buyers who go to view homes seem to be deciding to make an offer on those homes right now. Does this matter to sellers? Not necessarily. [1] Homes are still selling very quickly. [2] Homes are still selling at prices that are very favorable to sellers. [3] Sellers are still often having more than one offer to consider, even if they don't have ten offers. So, changes are afoot, but they aren't necessarily changes that are affecting the pace of sales or sales prices in our local market. | |
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Contract Activity Slowing A Bit In July 2022? |
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![]() In the first 25 days of July 2022, we have seen 88 signed contracts. Some context and notes...
Is this a massive slow down or a one month anomaly? Only time will tell, but thus far, contract activity in July is certainly seeming slower that I would have expected. | |
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Inventory Levels Creeping Slowly Upward, To Higher Low Levels |
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![]() Inventory levels - the number of homes for sale at any given time - have been creeping upward for the past 6+ months. With 163 homes for sale, we are now seeing more homes for sale than we have seen at any time since late 2020. The gray bars above show the number of homes on the market at the end of each month. The red line above shows a moving three month average to show the overall trend more clearly. To put this in a bit of context though, these new highs are actually still pretty low... Homes for Sale In...
So, yes, July 2022 inventory levels are higher than a year ago... but are also much lower than any other recent July... | |
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There Will Come A Time When Homes Will Not Sell Instantly, And That Is OK |
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![]() Over the past year, the median "days on market" has been five days in Harrisonburg and Rockingham County. That means that half of homes that sell are under contract in five or fewer days. That is fast. It's the fastest homes have ever sold in this market. Just three years ago, the median "days on market" was 23 days -- a bit over three weeks. That is also rather fast, but certainly not as fast as five days. And guess what folks, just as ridiculously low mortgage interest rates stuck around for a few years and then came to an end -- it is very likely that we will eventually see the time it takes to sell a home start to increase from this record median of five days. For example... in the past 30 days, the median days on market was seven days... yes, a full two days longer than that prolonged low of five days. If we do start to see the pace of homes selling starting to slow a bit... maybe from a median of five days on the market, to seven days, to (gasp!) a median of 10 days, here's what it might mean for our local market... [1] Home buyers will still need to look at homes quickly when they go on the market, but they might be able to sleep on the decision of whether or not to make an offer. [2] We might eventually see fewer multiple offer scenarios, at least in some price ranges. [3] Many homes (those in desirable locations, price ranges, etc.) will still sell very quickly, perhaps in five days, even if the overall market statistic increases. [4] Sellers will need to put up with showings for more than a few days. :-) One nice part about a fast moving market is that many home sellers only had to put up with home showings for a week or less - and that might start to change. There are plenty of additional *possible* implications of the pace of the market slowing. But rather than speculate as to what they will be, what they will mean, and when they will happen, I'll keep monitoring the data to see what is actually happening on the ground in our local market. Of note, related to median days on market (DOM) in our local market... Median DOM in the past 12 months = 5 days Median DOM in the past 30 days = 7 days Median DOM in the past 30 days for homes priced under $250K = 5 days So, even if the overall market slows down -- a smidge -- many segments of the overall market will likely still be moving quite quickly! | |
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The Local Real Estate Market Is Constantly Changing |
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![]() Over the past two years as home sales and home prices have rapidly accelerated upwards, we couldn't assume anything about pricing... We know - your neighbor's identical house sold three months ago for $350K. We assume - your house will sell for around $350K. And then - your house actually sells for $380K. Home prices were increasing so quickly that a recent sales price of $___ did not necessarily mean the next similar home would sell for that same price. And now, as the market seems to be slowing down a bit, we still can't assume anything about pricing... We know - your neighbor's identical house sold three months ago for $375K. We assume - your house will sell for around $375K. And then - your house might sell for $350K, $375K or $400K. These days... [1] There are certainly plenty of homes that are going on the market and selling very quickly, often with multiple offers. [2] There are some homes that are going on the market and sitting around for a bit before having an offer. [3] Some homes are still selling for more than we would have thought based on recent sales prices. [4] Some homes are selling for a bit less than we would have thought based on recent sales prices. I don't think we're seeing a wholesale shift at this point. We're still seeing more sales, at higher prices. But I don't think we can assume as reliably that home prices are steadily marching upwards at a rate of 10% per year right now. | |
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The Harrisonburg Housing Market Keeps Defying Expectations |
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![]() After A Worldwide Pandemic...
After Mortgage Interest Rates Almost Doubled...
When the pandemic began, I was convinced home sales would slow and prices might drop as well. The market defied my expectations. When interest rates skyrocketed, I was convinced home sales would slow and prices might drop as well. Thus far, the market has defied my expectations. As you can see, the Harrisonburg housing market doesn't always do what we might expect, even with significant external factors having the potential to make large impacts on our local market. So... don't assume our local housing market will do whatever you might read in national headlines... the local market seems to keep having some surprises for us! | |
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Harrisonburg Housing Market Still Speeding Right Along |
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![]() Happy Tuesday morning, friends! The starting and ending point of summer likely varies for many of us, but it seems like we're somewhere around the middle of summer. Gasp! As such, I hope the first half (or so) of the summer has treated you well, and that you still have some fun, adventures and relaxation in the works for the second half of summer. Before we get to the real estate news of the day, I'll mention that Red Wing was *fantastic* this year... ![]() I enjoyed seeing many of you out at Natural Chimneys over that long (but not quite long enough) weekend and I hope the rest of you will consider checking it out next year! Sign up for Red Wing Updates here. Next, I should mention that the beautiful home on the cover of my market report is on the market, for sale, as of this morning! Find out more about 390 Callaway Circle here. Finally, if you're looking for a good cup of coffee (or a caramel latte) one of my favorite coffee spots in the 'burg is Black Sheep Coffee, tucked away over on West Bruce Street. Interested in checking out Black Sheep Coffee? I'm giving away a $50 gift certificate, which you can enter to win here! And now, let's spend a few minutes together exploring the latest news and happenings in our local housing market... ![]() Right off the bat, we get to some rather fascinating updates just checking out the very basic metrics of our local market. As referenced in the tiny red numbers above... [1] A normal June might have around 135 or 145 home sales. Last June (2021) we saw an impressive 175 home sales. I did not think we would clear that high bar this June. But... we did. There were an astonishing 184 home sales in June 2022! [2] The median sales price in the first half of this year was $299,000! That is almost 15% higher than it was in the first half of last year, when it was $260,600. Even with *much* higher mortgage interest rates, homes keep selling at higher and higher prices! [3] Homes are still selling fassssssssst! The median days on the market in Harrisonburg and Rockingham County during the first six months of 2022 was... only five days, just as fast as when we look at the entire past 12 months of data. So... lots of sales, prices that are higher than ever, and homes are going under contract faster than ever. Hmmmm... things don't seem to really be slowing down thus far in 2022!? This fast moving market has been one contributor to the steady increases in home prices seen over the past two years. Take a look at these increases... ![]() [1] The median sales price of detached homes was only $250,000 just two years ago... but over the past two years that median sales price has risen to $310,000! [2] The median sales price of attached homes (townhomes, duplexes, condos) was only $180,400 just two years ago... but over the past two years that median sales prices has risen to $240,000! Homeowners have been delighted with these increases. Sellers have also been big fans. Buyers... not so much. It can be tough for buyers to get excited about paying a *much* higher price alongside their *much* higher mortgage interest rate... but buyers still seem to be moving forward full steam with their home purchases thus far in 2022. Those home buyers are moving along so steadily that we're breaking (tying) some records... ![]() Over the past ten years, the most home sales we have seen in a month has been 184 home sales... which took place last year, in August. Well, what do you know!? This June (last month) we saw... 184 home sales! Looking ahead, what should we expect for July? The past three months of July have been tightly clustered around that 145 - 155 range, so I'm going to play it safe and guess we'll see right around that many home sales in July 2022. Perhaps 150 on the nose!? As I have mentioned to many of you, I fully expected (and still expect) that we'll see a bit of a slow down in home sales activity in 2022 due to higher mortgage interest rates... but... the data just isn't agreeing with me thus far... ![]() As shown above, the 787 home sales we've seen in the first half of 2022 exceed the number of home sales in the first half of each of the past three years! If I didn't know better, I'd think mortgage interest rates must be *lower* than ever in 2022 to spur on so much buyer activity!? But, no, not so much. More on that later. Looking at these big picture trends in a slightly different way, it's astonishing to see three years in a row of double digit growth in the median sales price in our market... ![]() How much did our area's median sales price increase in 2020? 10% How much did our area's median sales price increase in 2021? 10% How much has our area's median sales price increased thus far in 2022? 11% It's been an astonishing few years in our local market to see home values escalating so quickly... without any signs of slowing down. But... to try to reel us back in a bit from cloud nine... ![]() It's hard not to look at the graph above and think that things could be, might be, possibly be changing... [BLUE] The top, blue, line shows the number of buyers buying in a six month period as evaluated over the past four years. This metric has been steadily marching upward over the past two years... but... it seems that the number of buyers buying might be flattening out a bit. Again, not that the amount of buyers buying is decreasing, but buyer activity might not be continuing to increase as quickly as it has for most of the past two years. [GREEN] The bottom, green, line shows the numbers of sellers selling at any given time... the inventory levels at the end(ish) of each month. For most of the past four (plus) years we have seen fewer and fewer (and fewer and fewer) homes on the market, due largely to excessive amounts of buyer demand. But... over the past six months... we're starting to see some modest flattening out of inventory levels in our local area. Inventory levels seem to be steadying themselves. Bear in mind that it is still definitely a strong (strong!) seller's market, but we might be starting to see some early signs that the market might be slowing down a touch... perhaps cooling off from a strong-strong-strong seller's market to a strong-strong seller's market!? Changing gears, slightly, here's an interesting trend to make sure that we recognize... ![]() After typically only seeing around 70 - 90 new (detached) home sales per year, we saw a remarkably high 144 such sales last year... and this year we seem to be on track to see around 180 new detached home sales in Harrisonburg and Rockingham County. These recent, steady increases in the number of new homes selling in our market is doing two things... one, allowing the overall number of home sales to increase without relying just on resale homes as inventory... and allowing the median sales price in our market to keep climbing, given that new homes are typically more expensive than resale homes. OK, shifting back to the overall sales market, here's a look at recent months of contract activity... measured by when contracts are signed... ![]() Looking at the highlighted months... [2022] We have seen 630 signed contracts in the past four months. [2021] In the same months last year, we saw 620 signed contracts. So, yes, even with *much* higher mortgage interest rates, we are seeing more buyers sign contracts to buy homes now as compared to a year ago. Is this surprising? Yes, relative to interest rates. No, relative to what seems to be a significant number of buyers who wanted to buy homes in this area in the past two years who have not yet been able to do so. In other words, demand exceeds supply. There are still lots of buyers who want to buy... even if the interest rates are higher than they were previously and higher than they would prefer. So, demand is high. How about supply? Well... ![]() It is possible that our local housing supply is increasing, slightly. After multiple years of constantly declining inventory levels, we now seem to be seeing inventory levels increasing a bit. Sadly, these *slightly* higher inventory levels aren't evenly spread across all property types, locations and prices... so many buyers will still find inventory levels to be *quite* low in their segment of our local market. Because inventory levels are still so low in most segments of the market, we are still seeing homes selling just as quickly has they have for the past year... ![]() As shown above, the pace at which homes go under contract once listed (days on market) declined steadily through 2020 and 2021 until it seemed to bottom out at a median of five days on the market. That is to say that half of homes go under contract in five or fewer days... and half go under contract in five or more days. This metric hit a median of five days on the market back in July 2021 and has stayed there ever since. If or when the market starts to slow, soften or cool, we'll start to see this metric drift upward again. Finally, that one topic that isn't quite as exciting to talk about... mortgage interest rates... ![]() Just six months ago... the average mortgage interest rate for a 30 year fixed rate mortgage was... 3.55%. Now, it has risen all the way up to 5.7% as of the end of June. This drastically affects the monthly payment for buyers in today's market as compared to just six (or twelve, etc.) months ago. I don't think we'll see interest rates rise above 6% but it is definitely possible. If there is one thing that could cool off our local housing market, it's this "cost of money" in the form of the mortgage interest rates. But, again, it hasn't happened yet despite drastic changes in interest rates. And here we find ourselves again, at the close of what seems to be another red hot month of real estate activity in Harrisonburg and Rockingham County. By the headlines... [1] More and more home sales are selling! [2] Homes are selling at higher and higher prices! [3] Homes are selling as fast as ever! [4] Inventory levels are increasing, slightly, in some pockets of the market. [5] Mortgage interest rates are higher than they have been in years! What will we see over the next few months in our local real estate market? Most likely, more of the same... but we won't know for sure until those next few months pass... and I'll pause each month to check the numbers and share some thoughts with you so that we can all have a good sense of where we have been, where we are and where we might be going next. Speaking of next... If you are planning to SELL a house in the next few months, sooner is likely better than later, and I'd be delighted to chat with you about how we might work together. If you are planning to BUY a home in the next few months, you ought to check in with your lender sooner rather than later to get proper expectations of your potential mortgage payments within the context of rising mortgage interest rates... and yes, I'd be delighted to help you with buying as well. Be in touch at any point if I can be of any help to you or your family or friends. You can call/text me at 540-578-0102 or email me here. Until next month... may your summer be as relaxing as this crazy real estate market can be stressful! ;-) | |
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But Officer, I Just Slowed Down!?! |
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![]() So, you're cruising along on Interstate 81 (somehow not stuck in traffic) in a 70 MPH speed zone.... ...but, you're going 115 MPH. Wow! But then, you slow down a bit, to 95 MPH. When your friendly, neighborhood police officer pulls you over and asks you why you were going so fast... 95 MPH... you tell the officer you just slowed down. "Sure, pal, you may have slowed down... but you were still driving very fast!" Maybe you see where I'm going with this... The local housing market has been moving very quickly over the past two-ish years, perhaps it's been going 115 MPH... well beyond the speed limit, and definitely a seller's market, often with 5+ or 10+ offers on new listings within days if not hours. The local housing market has now slowed down a bit, perhaps to 95 MPH... still well faster than normal, still definitely a seller's market, often with 1 to 3 offers on new listings within days, but likely not within hours. So, yes, the local real estate market seems to have slowed down a bit over the past few months -- but it is still moving very, very quickly! | |
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New Home Construction (For Sale or Rent) Is Likely The Only Path Towards A More Balanced Local Housing Market |
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![]() Over the past two (to five) years the local real estate market has seen... [1] More and more homes selling. [2] Higher and higher sales prices. [3] Higher and higher rental rates. Over the past six months, mortgage interest rates have increased significantly (from around 3% to nearly 6%) and yet... [1] We're still seeing just about the same number of homes selling. [2] Sales prices keep climbing. [3] Rental rates keep climbing. One conclusion that I keep coming back to in recent weeks and months is that... There are more people who want to live in Harrisonburg and Rockingham County than there is housing in which they can live. Generally speaking, when demand for housing exceeds supply, prices go up... that's what we're been seeing over the past few years. So, what's the answer? If there are 134,000 people living in Harrisonburg and Rockingham County, but there are 140,000 or 150,000 who would like to live here... ...the only path towards a more balanced housing market is to have... ...more homes. So, whether it's new homes being built to be sold... or new homes being built to be rented... that will help bring balance to our local housing market. It's certainly not clear how much more housing is needed, in what locations, or of what property types, sizes, or prices... but overall, more housing needs to be created (built) to account for the ever increasing number of people who would like to live in this area. | |
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An Early Look At June 2022 Home Sales |
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![]() As mortgage interest rates rise, many continue to wonder whether it will significantly slow down the amount of home buying activity we are seeing in our local market. It's a reasonable thing to wonder about. Here's a quick preview of how things went last month (June 2022) compared to the same month a year ago... June 2021 Mortgage Interest Rate at Start of Month = 2.99% Closed Home Sales in Harrisonburg & Rockingham County = 175 Contracts Signed = 143 June 2022 Mortgage Interest Rate at Start of Month = 5.09% Closed Home Sales in Harrisonburg & Rockingham County = 168 Contracts Signed = 129 Conclusions By the numbers... there were 4% fewer home sales this June compared to last June... and 10% fewer contracts. So, maybe (?) things are slowing down, a bit? That said, in many months over the past few years home sales seem to be constrained by the number of sellers willing to sell, and not so much the number of buyers interested in buying. Stay tuned for further updates as I take a fuller look at the market over the coming week. | |
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Is The Local Real Estate Market Softening? |
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![]() Anecdotally, it seems like a maybe the local real estate market is softening... but the data certainly doesn't show it yet. Here are a variety of current market anecdotes for you... [1] Many new listings are still having a flurry of showings and multiple offers and are selling at or above the list price with very few contingencies. [2] Sometimes a hot new listings receives just two offers instead of the five to eight that might have been anticipated. [3] Sometimes, new listings are coming on the market and sitting for a week or so before generating an offer. [4] Sometimes sellers start at one asking price and adjust it down a few weeks later after not having received any offers. And some data... [5] Thus far (Jan - May) in 2022, 4.75% more homes have sold than last year. So... is the market softening? Items 1 and 5 above would indicate... no. Items 2, 3 and 4 would suggest... maybe. I'll keep monitoring the data to see if it starts to show anything different... but for now, I'm leaning more towards believing the story told by the data more than the story told by the occasional anecdote. | |
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City Townhouse Sales Prices Increase 34% Over Four Years |
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![]() Townhouse values in the City of Harrisonburg have certainly increased rather quickly over the past few years... As shown above, we have seen a 4% to 11% increase in median sales prices for each of the past four years. There has been an overall 34% increase in the median sales price since 2018. If you happened to buy a townhouse a few years ago, you'll likely be in great shape if you're selling now or soon! Also helping this segment of our local housing market is that most new townhouses are now in the $250K+ price range. | |
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If You Expected The Local Housing Market To Slow Down Drastically, This Probably Is Not What You Meant |
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![]() Two years ago the "median days on market" was 15 days in Harrisonburg and Rockingham County. By a year ago, it had dropped to a median of six days on the market. Given that interest rates are rising, I thought perhaps we might be seeing this metric (how quickly homes are going under contract) start to rise in Harrisonburg and Rockingham County. And I was right! Things are SLOWING DOWN! ;-) Wink, wink, nudge, nudge. The graph above starts by looking at the median days on market over the past five months... the median was five days. Then, over just the most recent four months... still a median of five days. Next, over just the past three months, when interest rates started to rise... still a median of five days. Well what about over the past two months... still a median of five days. But, ah ha! I finally found it. The sign the market is really slowing down. The median days on market has increased 20% (!!!!) when we get to that last data point... the median days on market over the past month is... SIX days! :-) So, bottom line, did things go under contract more slowly over the past month than in previous months? Oh, yes, by one day. Is it a sign that the market is slowing? I suppose so. Barely. We'd need to see more of a change than what is described above and shown above to conclude that buyer enthusiasm is measurably declining. Stay tuned to see if that median days on market figure will scrape and claw it's way back up to SEVEN days sometime in the next few months. | |
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Strong First Five Months of Contract Activity in 2022 |
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![]() Look out... before you know it, I'll be saying the year is halfway over!? As usual, the months are flying by in 2022 and we are now looking backwards at a full five months of contract (and sales) activity. The graph above illustrates how many buyers (and sellers) have signed contracts to buy (and sell) homes in the first five months of 2020, 2021 and 2022. As you can see, the pace of home buying activity increased quite a bit between 2020 and 2021... and this year, it has increased even further. Higher mortgage interest rates in 2022 might slow down overall home sales activity, but thus far we don't seem to be seeing it here locally. | |
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Are We Seeing A Big Slow Down In Home Sales Activity Locally? |
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![]() If you read much national news you'll see plenty of headlines that say the housing market is slowing down... the housing market peaked... slower times are ahead for housing markets across the country. I'm sure that is all true, generally, nationally, and maybe in many markets. But, real estate is and has also been, local. Will the pace of home sales slow down in our local market? Maybe so. Will prices stop climbing as much as they have been in recent years? Maybe so. Are either of those things happening yet? Are we seeing a big slow down in home sales activity locally? It seems not. Properties going under contract in the past 30-ish days (April 25 - May 24) this year compared to last... Last Year = 170 contracts This Year = 162 contracts If things start changing in our local market, I'll be certain to be writing about it here... but just because you're reading it in the national news doesn't mean it is necessarily happening in Harrisonburg and Rockingham County. | |
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Sales of Not New Homes Are Increasing Too |
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![]() What do we call homes that are not new homes? Resale homes? Used homes? Existing homes? Previously owned homes? :-) Last week I pointed out that we are seeing a rapid increase in the sale of new homes in our market... a 39% increase in 2020 and a 68% increase in 2021. One might have thus wondered if ALL of the increases in our local area home sales can be attributed to new home sales. Well, the answer seems to be... no. As shown above, sales of not-new homes are increasing as well... a 10% increase in 2020 and a 5% increase in 2021. | |
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Reflecting On Large, Fast Changes In Mortgage Interest Rates |
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![]() For at least the past five years, I have remained convinced that mortgage interest rates would start rising... anytime. But month after month, year after year, interest rates did not rise... instead, they fell. But 2022 has been a bit different. If you had asked me anytime in the past five or ten years what would happen if mortgage interest rates increased from 3% to 5% in the course of just four months, I likely would have told you that the market would likely immediately and significantly slow down... not to a screeching halt... but certainly to a slower pace than before that enormous increase in mortgage interest rates. But, here we are, on the other side of rapidly increasing mortgage interest rates for the past four months, and the market seems to still be, doing pretty similar things to what it was doing before mortgage interest rates started rapidly climbing. Homes are still going under contract very quickly. Buyers are still often competing with multiple offers, including escalation clauses and waiving contingencies. Prices keep climbing. So, have the rising mortgage interest rates had any impact at all on our local housing market? I'd say yes. 1. Some would-be home buyers are no longer able to afford the homes they would like to buy. 2. I think some homes might be receiving two or three offers now instead of six or eight that they might have received before. 3. Some would-be sellers might not be selling after all as they see how their buying budget will be affected by higher mortgage interest rates. So, there have been changes in our local market as a result of these rapidly rising interest rates, they the higher rates have had a much narrower impact than I would have assumed in years gone by. One other point of trivia... the last time the average mortgage interest rate was 5.25% (or higher) was... way back in August 2009... almost 13 years ago! | |
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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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