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Some Home Sellers Will Need To Be A Bit More Patient Now |
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![]() For several years (most particularly 2020-2022) homes of every size, price and in every location would just FLY off the shelves. Ready to sell? No problem. There would be an abundance of buyers ready to pounce on your home within days if not hours of your house being listed for sale. That is still the case for some price ranges, locations and for some property types -- but it is not the case for all homes. Thus, some home sellers will still (excitedly) see their homes go under contract within a few days or a week of being listed for sale -- but some will not. If your home is still on the market for sale, and is not yet under contract, a few weeks after being on the market -- don't despair. There are no longer 10 would be buyers for every house at any given point that a house is listed for sale. You might need to wait for a few weeks or - (gasp) a month or more - for a buyer to come along that would like to buy your home. It was certainly a delightful time to be a home sellers when homes went under contract so quickly and so certainly -- but just because your house does not go under contract that quickly now does not mean that it won't sell at all. | |
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Midway Through 2024, Home Sales Are Increasing But Sales Price Increases May Be Slowing |
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![]() Happy Thursday... and... Happy Free Slurpee Day! ;-) We are officially halfway through 2024! Wow! It has been a whirlwind of a start of the year... and a HOT start to summer. I enjoyed seeing many of you at Red Wing Roots Music Festival earlier this summer, and I am looking forward to several upcoming trips with my family. I recently ran in VA Momentum's Valley 4th Run (5K) and felt both accomplished and old to have been an age group winner. Accomplished for winning my age group... and old for having moved up to the 45 - 54 age group... which is probably also why I was able to win my age group. ;-) But, as a client pointed out... better to feel accomplished and old... than to just feel old! ![]() Before we get started on the latest data on our local housing market, each month I offer a giveaway for readers of my market report. This month I'm giving away a $50 gift card to Broad Porch Coffee. If you haven't checked out their new location on Court Square, you should. I recommend the bread pudding... and many other items on their food and drink menu. Click here to enter to win the gift card. And now, let's take a look at what has been happening in our local housing market over the first half of 2024... ![]() The chart above captures all home sales in Harrisonburg and Rockingham County as reported in the HRAR MLS. I'm noting a few things... [1] Despite a 9% decrease in sales when we compare the past 12 months to the 12 months before that... there has been an 8% increase in home sales when comparing the first six months of 2024 to the first six months of 2023. So... home sales seem to be increasing again in 2024 as compared to where things were in 2023. [2] We have only seen a 3% increase in the median sales price when comparing the first half of 2024 to the first half of 2023... compared to a 7% increase when we look back 12 months compared to the prior 12 months. So... it seems that price increases may be slowing a bit. Read that again, though, prices are still increasing... just more slowly than they had been. But let's dig a bit deeper into a few subsets of the market, starting with detached homes... ![]() When looking only at detached homes (which does not include duplexes, townhomes or condos) we find... [1] There have been 7% more home sales in the first half of 2024 compared to the first half of 2023... which is pretty similar to the 8% increase in the overall market. [2] The median sales price of detached homes has increased 10% in the first half of 2024 to a median sales price of $385,150. That is to say that half of single family homes sold in the first half of 2024 sold for $385,150 or more... and half sold for $385,150 or less. Now, how about those attached homes... ![]() When looking only at attached homes (duplexes, townhomes, condos) we find that... [1] There have been 9% more attached home sales in the first half of this year as compared to the first half of last year. [2] The median sales price of attached homes has risen 9% to $310,000. Again... that means that half of attached homes (that have sold) have sold for $310K or higher, and half sold for $310K or lower. Now what about just the City of Harrisonburg... ![]() It has been a bit harder to find a home to buy in the City this year... with 14% fewer homes selling in the first half of the year as compared to the same timeframe last year. At least part of this is explained by the large number of new homes being built in the County and the small number being built in the City. Without much "for sale" housing being built in the City, the number of homes selling in the City relies almost entirely on resale homes -- current homeowners deciding to sell. Perhaps the limited supply of homes selling in the City is why we have seen a larger (16%) increase in the median sales price of homes sold in the City thus far in 2024. In contrast, in the County... ![]() Perhaps due to the larger number of new homes being built in Rockingham County, we have seen a 16% increase in the number of home sales taking place in the County in the first half of this year compared to the first half of last year. The median sales price, however, has only increased by 3% in Rockingham County compared to the 16% referenced earlier in the City of Harrisonburg. Since I've mentioned new home sales a few times, let's take a look at what is happening there... ![]() As shown above, we have seen a 39% increase in new home sales in the first half of this year (191) compared to the same timeframe last year (137) though this really just brings us back to the same approximate amount that we saw two years ago (198) in the first half of 2022. Also, the median sales price of new homes has only increased 3% over the past year... from $343K-ish to $353K-ish. And if we strip out all of the new homes, here's what we find in the resale market... ![]() Despite an increase in the overall number of homes that are selling in Harrisonburg and Rockingham County... there has actually been a 1% decrease in the number of existing homes that are selling. That's a small change, but it is headed in the opposite direction of our overall market. If the smaller number of existing home sales is at all related to a decreased number of sellers being willing to sell their homes, that might explain the slightly higher increase in the median sales price of existing home sales this year (+6%) as compared to the increase in the median sales price of all homes (3%). OK, taking a breath now... that's all of the charts and numbers. Now let's allow some graphs to help us visual learners understand the latest trends in our local real estate market... ![]() We saw a LOT of home sales in May 2024... 144 of them... compared to only 114 the prior May. This left me at least partially wondering whether we would see fewer home sales this June than last June due to that particularly busy May. But this June outperformed last June, even if not by as much as the month of May. These two months of stronger sales (May, June) compared to last year have contributed to the overall increase in home sales between the first half of 2023 and the first half of 2024. Which is shown... here... ![]() After several years (2022, 2023) of declining numbers of home sales in Harrisonburg and Rockingham County, perhaps we will see an increase in 2024. Given the increase from 610 sales to 658 sales in the first half of 2023 and 2024, it seems likely that we will finish out 2024 with more than the 1,206 home sales seen last year. You can also see that turnaround in the pace of home sales here... ![]() The blue line above is tracking the number of home sales taking place in a year's time, measured each month. As you can see, that metric has started to trend upwards again over the past six-ish months after over a year of declines. The green line above shows the median sales price, which has been steadily increasing for years. The median sales price is still increasing, but those increases might be slowing. Technically, the median sales price decreased a bit over the past month, but only by $35, so we'll wait to see what happens over the next few months before jumping to any conclusions. Here's another look at those same metrics of quantity of sales and home prices... ![]() The green line (median sales price again) clearly seems to be going up (increasing) more slowly in 2024 than it has in previous years. Keep in mind, though, that the rate of price increase over the past few years has been 10% -- per year -- so a smaller increase in prices would certainly be expected at some point. The graph above also shows a few more past years history of the number of homes selling. The 1,206 homes sold in 2023 was the smallest number in more than five years (while not pictured - it was the slowest year since 2014) but we might see more home sales in 2024 than we did in 2023. Interestingly... when we strip out the attached homes (duplexes, townhouses, condos) we actually see a more steady increase in median sales prices... ![]() And when we look only at the duplexes, townhomes and condos we see that slow down in price increases more clearly... ![]() Shifting gears a bit, let's look at contract activity to take a guess at what the next few months of home sales might look like... ![]() June marks the fourth month of stronger contract activity when comparing contracts signed this year to the same month last year -- though the contract signing frenzy cooled a bit in June. These stronger months of contract activity likely mean we will continue to see steady increases in home sales over the next few months. This same trend is seen when tracking pending sales... ![]() Pending sales is a measure of how many homes are under contract, waiting to make it to settlement. There are currently 308 such homes... as compared to only 261 a year ago. This pending sales total in 2024 (red line) has been tracking well above where things were a year ago (blue line) since the start of the year. Lots of buyers and sellers signing contracts sometimes leads to lower levels of homes available for sale... ![]() The last few months of strong contract activity has been followed by steady declines in the number of homes available for sale. Inventory levels have dropped from 185 homes for sale to 152 homes for sale over the past two months. These inventory levels in 2024 (red line) are still higher than they were a year ago (blue line), but that might change within the next few months. With so many homes going under contract, are they going under contract more quickly? ![]() It seems so! The median "days on market" has been trending back downward again over the past few months... and the past year (plus) of data suggests that we might be starting to see some seasonality in this metric once again. In years gone by we would see homes go under contract more quickly in the spring/summer/fall than they would in the winter... though for the past few years (due to Covid, low interest rates) we saw homes go under contract rapidly regardless of the time of year. It seems we might be headed back to a market with a bit more seasonality when it comes to how quickly buyers are contracting to buy homes. But... I will also point out that this median days on market figure does not clearly show that there are plenty of homes that are taking longer than a week (or longer than a month) to go under contract. All homes are not going under contract within seven days... and while most homes are... that "most" is only 51% per how a "median" calculation works. Finally (alert, alert - last graph) mortgage interest rates have been bouncing around this year... but trending downward most recently... ![]() Way back on the far left edge of this graph (above) you'll see that rates were below 5% in early 2022... but they have been above 6% since September 2022, and have been above 7% for six of the past 12 months. It has been a topsy-turvy world when it comes to mortgage interest rates over the past year. Some buyers may have purchased when rates were as high as 7.25% or 7.5%... though today's buyers are likely to be locking in below 7%. I am cautiously optimistic that we might get back down to the 6% - 6.5% range in 2024 or early 2025, but mortgage interest rate trends have been anything but predictable lately. And that brings us to the end of this month's overview of our local housing market. If you made it through all of the charts and graphs, kudos to you for educating yourself on the intricacies of our local housing market. If you plan to buy a home in the second half of 2024... get pre-approved for a mortgage if you haven't already and be sure to go see new listings of interest quickly once they hit the market given that many are still going under contract in a matter of days. If you plan to sell your home in the second half of 2024... you will likely still find selling conditions to be quite favorable, with high levels of buyer interest depending on your price range, property type and the location of your home. If I can be of help to you as you explore the possibility of buying a home, or selling your home, feel free to reach out to chat. You can reach me most easily by phone/text at 540-578-0102 or by email here. I hope you enjoy the remainder of your week (high temp of only 80 degrees tomorrow!) and that you find some time to get away this summer to relax and spend time with family and friends. | |
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Very Few New Homes Are Custom Built Homes These Days |
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![]() When speaking of single family homes (not townhouses or duplexes) currently being built in Harrisonburg and Rockingham County -- most of them are not custom built homes. There are now several regional builders in our market that are buildings many single family homes, often very quickly. It's interesting, thus, to think about how the overall housing stock in our area will be impacted over time. Twenty years ago, many new homes in our area were custom built with some spec homes mixed in as well, but we didn't have large subdivisions with 50+ or 100+ homes being built out by a single builder in just a year or two or three. I do not anticipate seeing this trend reverse itself over the coming years. I suspect from here on out we will always see more (or many more) new homes being built by large regional or national builders than we will see custom built homes. | |
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If You Are Renting A House Now But Hope To Buy Soon, Start Looking At Homes Six Months Before Your Lease Ends |
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![]() So, you are renting a home in Harrisonburg or Rockingham County now... but you hope to buy a home within the next year? I recommend that you start looking at homes for sale about six months before the end of your lease. Many leases require you to provide 60 days notice (or more, or less) as to whether you will renew or not renew said lease. Thus, you shouldn't wait too long to start looking at homes you might purchase. Furthermore, there still aren't many choices of homes to purchase in many price ranges in Harrisonburg and Rockingham County. Thus, you will want more time to consider new listings that pop up over the course of a few weeks or a few months, rather than just choosing from homes that are available for sale at a single moment in time. This is best accomplished by starting to look at homes several months before you need to secure a contract to purchase one. Finally, the longer you look at homes for sale, the better context you will have for what types of houses sell for what types of prices - which will make you a more informed buyer when you are ready to make an offer on a home you hope to purchase. So... if you're renting now, but hope to buy at the end of your lease... start looking at homes six (or so) months before that lease ends. | |
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Neighborhoods With 10 Or More Sales In The Past 12 Months |
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![]() Over the past 12 months we have seen 1,251 home sales in Harrisonburg and Rockingham County as reported in the HRAR MLS. Where have all of these home sales been located? Let's start by taking a look at the neighborhoods where we have seen the most sales over the past 12 months. The graph above shows the neighborhoods that have had at least 10 home sales over the past 12 months. The leader of the pack is Wingate Meadows where 107 homes have sold over the past 12 months -- followed by Massanutten, Cobblers Valley and Congers Creek. The green bars above are neighborhoods where most or all sold homes were new homes -- whereas the blue bars are neighborhoods where most or all have been resale homes. In summary... Over the past 12 months a total of 481 home sales have taken place in these neighborhoods shown above... which is 38% of all home sales in all locations. Of these 481 home sales in these neighborhoods... 154 were in (mostly) resale neighborhoods 327 were in (mostly) new neighborhoods | |
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When Multiple Offers Exist, Home Buyers Should Go Ahead And Make Their Strongest Offer |
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![]() If a house has been on the market for a few days without an offer, a home buyer may be inclined to attempt to negotiate somewhat on price and add contingencies related to a home inspection, appraisal, etc. All of that is fine, and can make sense. Until another offer exists. Once more than one offer exists, home buyers ought to go ahead and make the strongest offer that they would like to make - acknowledging that they are now not only negotiating with the seller but they are also competing with other buyers. For example... A home is listed for sale for $475,000. Five days go by with plenty of showings but no offers. A buyer offers $455,000 with an inspection and appraisal contingency. A second buyer makes an offer - clearly, with terms unknown to the first buyer. The first buyer does not modify their offer, or only makes a small change, not taking it all the way to the best terms they would be willing to offer for the house. The seller moves forward with the second buyer. The first buyer regrets not having made their strongest offer. Yes, negotiate if you must, or if you feel that you should, but if you are competing with another buyer, don't hold back if you really do hope to buy that house! | |
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Are Homes Staying On The Market Longer These Days? |
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![]() Some homes certainly are staying on the market longer these days than they have been over the past few years. We haven't seen a noticeable shift in the "median days on market" statistic that I track on a monthly basis, but it is no longer the case that nearly all homes that are listed for sale go under contract within a week. For example... 1. There are (22) resale homes currently on the market with a "Harrisonburg" or "Rockingham" mailing address (ignoring towns or far flung properties) that are priced under $400K and have been on the market for at least a week. 2. Of those (22) homes, there are (18) that have been on the market for at least two weeks. 3. Of the (133) resales homes that have sold in that same geographic area over the past three months, only (76) had a "days on market" of a week or less, and (44) of them took longer than two weeks to go under contract. So, when we list your home for sale, will it be "off to the races" with an offer being received (and a contract signed) within days? Maybe -- but maybe not. Plenty of homes are taking longer than a week to sell -- and no, that does not necessarily mean that nobody will ever want to buy your house. :-) | |
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Home Sellers AND Buyers Are Both Trying To Get Used To Home Inspection Contingencies Again |
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![]() For much of the past five years, in many price ranges, in many locations, we were seeing multiple offers, escalation clauses, and buyers willing to remove any and all contingencies. Home inspections were a thing of the past -- for a few years. But now, with somewhat fewer buyers in the market to buy (given higher mortgage interest rates) we are often just seeing a single offer, or only a few, rather than 5 to 10 offers on a popular new listing. As a result, home inspections are often taking place on transactions in Harrisonburg and Rockingham County. Since home inspections haven't been top of mind lately (given the heated market) here are a few reminders to home sellers and buyers related to home inspections... Sellers - Certainly, it would be ideal if the one offer you received did not have an inspection contingency, but you only have one offer, so it is probably reasonable to go along with the home inspection. Buyers - Try to focus on major issues in the home inspection report. It is not necessarily realistic to think a seller is going to address every minor issue identified in the inspection report. Sellers - Your buyer is (probably) not just trying to use the inspection report and contingency to renegotiate the deal. Assume the best about your buyer, that they are attempting to renegotiate the deal given the new information they discovered during the inspection process. Buyers - I do not recommend asking sellers to make elective upgrades to the home. Your home inspector might have pointed out items that would be done differently if the home was built today, but was normal at the time the house was built -- or they might point out areas where you could make improvements to improve energy efficiency, etc. These sorts of items are not typically repairs (or upgrades) that you should request from a seller. Sellers - If the unknown of what might be discovered during a home inspection worries you, it could be a good idea to have an inspection completed before listing your home to identify and resolve any significant issues. Buyers - Given how difficult it can be to line up a contractor or handyman these days, consider being willing to discuss a credit with the seller instead of requiring that repairs be completed. I suspect home inspections will continue to be (will return to being) a normal part of the home purchasing and selling process over the next few years. | |
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Home Improvements Only Offer A Partial Return On Investment But That Is Only Part Of The Story |
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![]() Given that so many homeowners have fixed mortgage interest rates below 4% (or below 3%) there are plenty of homeowners who are likely to stay in their homes for MANY years to come. Staying in a home for many years to come will likely mean that at some point you are considering some home improvement projects...
The list could go on and on. When asked by homeowners about the return on investment of home improvements I am quick to point out that they all typically offer only a partial return on investment. That is to say that if you spend $25K on project X, your home's value might only increase by $15K. If you spend $85K on project Y, your home's value might only increase by $40K. You get the idea. BUT... looking at the return on investment through that singular lens (change in home value) is only looking at part of the story. Typically, homeowners make improvements to not only increase the value of their home but also to improve their experience of living in the house between now and at whatever future date they sell it. Each of the potential home improvement projects noted above would provide you with some greater enjoyment of your home or greater utility from your home for the duration of your ownership of the home. So... if you plan to stay in your home for a while, and are considering some home improvement projects, don't only look at how those improvements will affect your home value... also consider how they will improve your enjoyment of or your use of your home. | |
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If You Are The First Or Only Buyer To Make An Offer, Go Ahead And Include Those Contingencies |
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![]() Egads! The market is crazy right now -- would be home buyers have to include escalation clauses and they certainly couldn't include an inspection contingency or an appraisal contingency!?! Right? Well... yes... often... but not always. Sometimes you might be looking at a home that has been on the market for 3, 7 or 10 days -- without an offer on it as of yet. Should you offer full price, waive an inspection and opt out of an appraisal contingency? Not necessarily. As funny as it might be to say this... If a house has been on the market for a few days and does not have any offers, go ahead and go crazy... include that inspection contingency, and the radon test contingency, and the appraisal contingency, and... wait for it... maybe even try to negotiate a bit on price!?! Certainly, your offer might spur on another offer, and then you might be in a competitive offer situation where you are revising your offer and removing your contingencies... but you might just find success in buying a home with a few of those used-to-be-normal contingencies. ** results may vary based on property type, price range and location ** ;-) | |
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Mortgage Interest Rates Declining Steadily Through Start Of Summer |
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![]() Outdoor temperatures may have been HIGH during the first few weeks of summer... but mortgage interest rates have been falling! Over the past years, the average 30 year fixed mortgage interest rate has been 7.01%. The average rate peaked last October at 7.79% and then fell relatively steadily through December... but then (mostly) climbed again all the way through May when it hit 7.22%. Since that time we have seen a decline almost every week, and the average rate is now 6.87%. That is nearly a full percentage point lower than the high of 7.79% this past October. Home buyers are certainly enjoying these lower mortgage interest rates though they hope they will continue to decline. | |
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I Just Contracted To Buy A House But An Even More Exciting House Was Just Listed For Sale!?! |
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![]() Thankfully, this doesn't happen too often, but I have had a few clients over the years who have been in this predicament. They finally, excitedly, ratify a contract on a house that they are thrilled to purchase... and then... a few days later... a house hits the market that is even more exciting! What is a conflicted buyer to do? 1. Remember that you are contractually bound to buy the home that you signed a contract to buy. There will likely be ramifications (financially and otherwise) if you do not complete the purchase. 2. Remember that you were excited about lots of other new listings in the past, all of which you were much less excited about after you toured the houses. Thus, even if the shiny new listing seems like a really exciting house, you might not actually like it as much as you think you will if you walked through it. 3. Remember that in a competitive market (which we are still in, for the most part) there isn't any guarantee anyhow that you'd be able to secure a contract on that newer and possibly more interesting listing. 4. Remember that this dynamic will always exist -- whether it's a few days later, a few months later or a few years later -- a home will inevitably come on the market that will be (or will seem to be) more exciting than the home you bought a few days ago, a few months ago or a few years ago. 5. Consider turning off your new listing alerts to avoid feeling conflicted? 6. Feel free to talk all of this through with me and I can try to help talk you off of the ledge if you are suddenly less excited about the house you just contracted to buy based on a new listing that just hit the market. | |
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Four Story Building Of Storage Units Proposed On Stone Spring Road |
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![]() A developer is proposing to build a four story building of storage units in the location shown below -- on Stone Spring Road, not too far from its intersection with Port Republic Road, next to Dupont Community Credit Union. ![]() Find out more about the proposal here. | |
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16 Apartments (Plus An Industrial Building) Proposed On Baxter Drive |
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![]() A light industrial building and 16 apartments have been proposed on Baxter Court as shown above. Here's the potential site plan... ![]() Learn more about the proposal here. | |
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16 Townhouses Planned For Corner Of Deyerle Avenue And Lucy Drive |
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![]() City Council recently approved the rezoning (from R3 to R8) of a one acre parcel at the corner of Deyerle Avenue and Lucy Drive to allow for the development of 16 townhouses. Here's the potential site plan... ![]() Learn (a bit) more via the application packet here. | |
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Three Story Apartment Building With 15 to 20 Apartments Planned On West Elizabeth Street |
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![]() The owners of a 0.24 acre lot on West Elizabeth Street, between North High Street and North Liberty Street, plan to build a three story apartment building with 15 to 20 apartments. The owners have received approval from the City for the rezoning required for this development to move forward. City staff, planning commission, city council and the developers all seem excited at the prospect of bringing more living opportunities to the downtown area. Interestingly...
I'm just realizing that the site will potentially be transformed from only being used by cars (a parking lot) to a use that does not allow for cars (apartment building with no on-site parking). :-) | |
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Listings Hitting The Market On Fridays Make It Important For Buyers To Have A Lender Letter Ready To Go |
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![]() A buyers says... I plan to buy a home as soon as "the right one" comes on the market. I talked to a lender six months ago and they didn't have any concerns with being able to approve me for a mortgage. I'll just wait until the right house hits the market and then I'll get a prequalification letter from my lender. This works out OK some of the time to most of the time - but not all of the time. Sometimes a new listing hits the market on a Friday. We might go see it on Saturday afternoon. By the time we are looking at the house there are already two offers in hand and a few more might be received at any moment. If you love the house, and want to make an offer, we might be in a tight spot, because... 1. An offer without a lender letter won't typically go anywhere. 2. An offer with a promise to deliver a lender letter on Monday won't typically go anywhere. Certainly, sometimes a seller won't be making a decision until Monday or Tuesday and sometimes offers don't materialize that quickly. But... if you want to be ready to make an offer on a house that you love when it hits the market, you should already have a lender letter ready to go. | |
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How To Best Understand How Home Values Are Changing |
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![]() Full Disclosure: I have more questions than answers today. In the first five months of this year versus last year...
Wait, what!? The detached homes that sold in the first five months of this year sold at prices that were 13% higher than last year... and attached homes sold at prices that were 15% higher than last year... but when you combine the two data sets the median sales price is only 5% higher? Yes, that is correct. My first theory to try to explain this was that maybe more detached or attached homes sold in one year versus the other. But, it seems not... 2023: 68% detached, 32% attached 2024: 67% detached, 33% attached Next up I looked at what happens when we take new construction homes out of the mix. When looking at home sales in the first five months of this year versus last year, and when only looking at resale homes, not new homes...
That is certainly much less confusing than the first set of numbers. Where do we go from here? 1. I want to see how some of these numbers change as we have more months of 2024 data to work with. 2. I will be thinking further about how to best understand changes in home values in this area... perhaps it is best to only look at resale home sales, or just look at resale detached home sales? 3. I will welcome the thoughts, theories, guesses and questions from my readers. :-) Yes, that's you. | |
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May 2024 Home Sales Outpace Projections, With Median Prices Increasing More Slowly |
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![]() Happy Monday, friends, and Happy Summer! Summer is well underway over here at the Rogers household, with Luke having finished his first year of college and Emily wrapping up 10th grade. The start of our summer has included getting away for a few days to the lake for some water skiing and tubing, celebrating my niece's graduation (congrats Sofia!) and looking forward to Red Wing Roots Music Festival in less than two weeks! I hope your summer is off to a great start and that you'll find some time to relax or get away for a few days at some point this summer. ![]() Before we dive into the lake, or rather, the real estate data... each month I offer a giveaway for readers of my market report. This month I'm giving away a $50 gift card to Bruster's. Yes, I realize that is a lot of ice cream... but they have SO many delicious flavors! Click here to enter to win the gift card. Now, on to the latest happenings in our local housing market... ![]() Above you'll find the basic numbers related to how many homes are selling in Harrisonburg and Rockingham County and the prices at which those homes are selling. Here are a few things that stand out to me... [1] Home sales this May (last month) were much higher than expected... with 20% more sales than last May. [2] Despite seeing a 15% decline in the number of home sales in the past 12 months compared to the 12 months before that, we are now seeing a 7% increase in year to date home sales, thanks in part to the strong month of sales in May. [3] You might recall that for the past few years we have been seeing a (surprising) 10% increase in the median sales price each year. The median sales price over the past 12 months ($336,010) is now 8% higher than in the 12 months before that -- and the year to date median sales price is only 5% higher than in 2023 year to date. Thus, it seems that the median sales price may be increasing a bit more slowly this year than in recent years. Looking for a moment just at detached single family homes... ![]() Sometimes it can be helpful to look only at detached home sales to see how they are comparing compared to the overall market. This month I am noting that the median sales price of all homes sold has only increased by 5% year to date (from $325K to $340K) but the median sales price of detached homes has increased by 13% year to date (from $342K to $385K). If you're trying to buy a home, you are likely paying a higher price now than you would have a year ago. If you are trying to buy a detached single family home, you are likely paying a much higher price now than you would have a year ago. As one final subset of the overall market data, here's a look at only existing homes... excluding new construction homes... ![]() If you don't happen to want to buy a new home (based on their size, location, price, etc.) then you'll be focusing just on resale homes -- and there have been far fewer of those home sales over the past 12 months. We have seen 17% fewer resale home sales over the past 12 months (compared to the 12 months before that) mostly due to sellers not selling - rather than buyers not buying. In slightly better news, we have only seen a 2% decline in existing home sales year to date, so as to say that the decline is slowing in the number of existing homes that are selling. Perhaps it is unsurprising then that the median sales price of existing homes is 10% higher this year to date compared to last year to date, which shows a higher rate of increasing prices for existing homes as compared to the overall market. Now, I started off by mentioning that May home sales exceeded expectations... and you can see that more clearly here... ![]() April home sales (106) were much (!) lower than last April (124) but May did not follow that pattern. After only seeing 114 home sales last May... there were 137 this May! Adding up those two months to see how April+May is tracking year over year, we find 243 home sales this year compared to 238 home sales last year. As you can see from my abundance of purple arrows above, it's hard to say where things will head in June... will home sales drop below 2023 again, or match 2023, or exceed 2023? It's hard to know for sure, but keep reading for the latest on contract activity and pending sales, both of which should give us somewhat of a hint of what is ahead. But first, let's see how this year stacks up compared to prior years... ![]() We have been seeing a decline in the number of home sales over the past few years (2021 to 2022 as well as 2022 to 2023) but that might be reversing itself in 2024. The 525 home sales we have seen in the first five months of 2024 puts us ahead of 2023, though certainly still behind 2022 and 2021. Stay tuned to see if we can come out ahead of the 1,206 home sales we saw last year. Next up is a monthly look at rolling 12 month trends... ![]() The top (green) line shows (barely, if you squint) what I have already mentioned in this month's report... median sales prices are increasing, but maybe not quite as quickly over the past six months as compared to their trajectory over the past few years. But, we'll need to continue to watch this metric to see if price increases are indeed settling down a bit. The bottom (blue) line shows that after almost two years of a downward trend in the number of homes selling in Harrisonburg and Rockingham County... we might finally be seeing things level out and increase a bit. We peaked above 1,700 home sales a year... and over about two years then saw things bottom out at just over 1,200 home sales a year. Will this trend slowly make its way back up to 1,300 home sales a year? If so, how soon? I mentioned new vs. existing home sales a bit earlier, but here's how the breakdown looks over the past few years... ![]() We have seen a steady decline in the number of existing homes selling in our market... and in the percentage of home sales that are existing homes. Three years ago 81% of home sales were existing homes and only 19% were new homes. This year only 71% of homes that are selling are existing homes and 29% are new homes. Many homeowners have low mortgage interest rates on their existing mortgages and thus do not want to sell their homes -- which is contributing to lower numbers of existing home sales. We are also seeing many more new home communities in our area -- from local builders, but mostly from regional builders. I suspect we will continue to see new homes making up 25% or more of all home sales over the coming years. Now, for predicting the future... ![]() After a strong month of sales activity in May, one might wonder what the next few months will hold. As shown above, we have now had three straight months of solid contract activity (red line) compared to those same months last year (blue line). Over the past three months, 423 buyers (and sellers) have signed contracts compared to only 364 in the same three months last year. These strong levels of contract activity suggest that we will continue to see at least several more months of strong home sales. Trends in pending home sales also supports that theory... ![]() A year ago (blue line) there were only 275 homes under contract (pending) in Harrisonburg and Rockingham County. Today, that has risen to 336 homes under contract in our market. The overall declines in the number of homes selling may be behind us at this point given recent months of strong contract activity and the current trends in pending home sales. Perhaps unsurprisingly, inventory levels are also declining a bit... ![]() Back in July 2023 we saw inventory levels start to rise... and they have stayed higher than expected since that time. But... at least as of today, inventory levels are trending back down a bit. Will this trend continue? Or is it a one month blip? Stay tuned. Keep in mind that even as inventory levels rose from the 100-130 range to the 180-200 range, all of those levels are well below pre-COVID inventory levels. Days on market -- how quickly homes go under contract -- is also keeping things interesting lately... ![]() After several years of a median days on market of four or five days, we started to see this metric drift upward in late 2022, corresponding in large part to increases in mortgage interest rates. Last summer we saw days on market start to decline again (back down to five days in August 2023) but then it rose through early 2024. Has the market slowed back down since that time -- or are we starting to see a seasonality to this metric? We'll need to see how things develop as we progress through the remainder of the summer months. And, finally, those mortgage interest rates... ![]() Two years ago the average rate was just above 5%, and rates peaked last Fall just under 8%, but the average 30 year fixed mortgage interest rate has been consistently above 6.5% for a year now... and there are not any indications that we'll see anything below 6.5% anytime soon. Most home buyers (or would be home buyers) have now adjusted to this new interest rate environment, and hopefully nobody is planning to wait to buy until rates get below 5%. There is talk of mortgage interest rates potentially coming down some over the remainder of the year, but we've heard that talk quite a few times over the past six (+) months and it hasn't measurably happened yet. As I bring this monthly market recap to a close, I'll point out that I post even more charts and graphs for your perusal each month over here. And finally, as we look ahead through the summer and towards the fall... If you plan to sell your home in the next six months, let's chat sooner rather than later about market conditions, your home preparations, your timing objectives and more. If you are considering a home purchase in the next six months, I'd be happy to chat with you about the buying process, the market and introduce you to some mortgage lenders who can help you consider your financing options. Reach out to me anytime via phone/text at 540-578-0102, or by email here. | |
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Do Not Assume A Seller Will Say No To An Offer You Have Not Made |
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![]() It often goes something like this... "That house was listed for a sale a few days ago for $435K and I could probably only afford to pay $425K. I'm sure the seller would not accept my $425K offer, so I just won't make the offer." "I know that house has been on the market for two months priced at $650K without a price adjustment, but I'm sure the seller would not be willing to sell for $625K, so I won't even make the offer." "Even though that house has been on the market for a few months, they probably still wouldn't accept a full price offer because I would need to include a home sale contingency, so I probably shouldn't make an offer." In almost all cases, I recommend that all three of the fictional buyers above go ahead and make the offers that they chose not to make because they assumed a seller would say no to their offer. Certainly, a seller might really say no to your offer, but that's OK. If you never actually make the offer, you'll never have a chance to find out if the seller will say "no" -- or whether they would say "yes" or "no, but how about..." | |
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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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