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Are Home Prices Rising Because Larger Homes Are Selling? |
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![]() When you see a 12% increase in the median sales price between 2021 and 2022 you might wonder if it is just a result of larger homes selling this year than last. It's a reasonable question, and a relatively straightforward one to investigate... The graph above shows... BLUE LINE = median sales price of single family homes in Harrisonburg and Rockingham County GREEN LINE = median price per square foot of those same single family homes in Harrisonburg and Rockingham County If the 12% increase in the median sales price could best be understood as a collective increase in the size of homes being sold, we would see an increase in the median price per square foot that was smaller than 12%. In fact, over the past year, the median price per square foot has increased by 13%, right alongside the median price increasing by 12%. So, this significant increase in sales prices does not seem to be attributable to larger homes selling. | |
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Home Prices Keep Rising in Harrisonburg, Rockingham County Despite Slightly Fewer Home Sales |
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![]() Greetings, and Happy Tuesday morning, friends! Would you believe it if I told you we're 70% of the way through 2022!? It's hard to believe, I know, but indeed, we only have about 30% of the year to go. Would you believe it if I told you I am now old enough to be the dad of an adult!? It's hard to believe, I know, but Luke recently celebrated his 18th birthday. Shaena and I are tremendously proud of the man he is and is becoming and we're excited to see what is in store for him in the coming years. Happy 18th, Luke! :-) ![]() This Month's Featured Home... The upscale rowhouse on the cover of this month's market report is one of the original lakefront rowhouses at Preston Lake, and you can find out more about this beautiful property by visiting 3313PrestonShoreDrive.com. Another of My Favorite Places... Each month I offer a giveaway, of sorts, for readers of this market report, highlighting some of my favorite places (or things) in Harrisonburg. Recent highlights have included Village Juice & Kitchen, Black Sheep Coffee and the Harrisonburg Half Marathon. This month I'm highlighting the JMU Forbes Center for the Performing Arts which is the premier destination for arts in the Shenandoah Valley with countless top notch musical, dance and theatrical performances each year. Have you been to a show at the Forbes Center? Would you like to? I'm giving away a pair of tickets to what is bound to be a hilarious show at the Forbes Center... "Whose Live Anyway?" featuring current cast members of the Emmy-nominated television show "Whose Line Is It Anyway?" for 90 minutes of hilarious improvised comedy and song. The show is on Friday, September 30 at 8:00 PM. Enter here for a chance to win this pair of tickets. And now, let's take a look at the latest news from our local real estate market... ![]() First off, let's get right to it... we saw significantly fewer home sales this August as compared to last August. We've been in "always more, every month more" mode for so long when it comes to home sales that it might seem jarring to see a 19% drop in August home sales, but it is important to realize that we couldn't necessarily always see more and more home sales forever and ever. We have seen an extraordinarily high amount of home sales activity over the past two years. Those home sales levels may have been inflated beyond the norm, so we may see a downward shift in the number of homes selling per year as we finish out 2022 and enter 2023. This isn't a catastrophe and it does not necessarily mean we will see any adjustments in home values and sales price in this area. In fact, in the "this is not a catastrophe" category, when we move beyond #1 above, where we see a 19% decline in August home sales, we'll also find... [2] The pace of home sales during the first eight months of this year are still slightly (0.65%) ahead of last year during those same eight months. Though, if home sales activity continues to be a bit slower through the rest of 2022, we should expect the annual pace of sales in 2022 to eventually fall behind 2021 levels. [3] The median sales price this year in Harrisonburg and Rockingham County ($298,950) is 11% higher than it was last year during the same first eight months of the year when it was $269,000. [4] When looking at a full year of data (September through August) we find that there has been a 9% increase in the median sales price over the past year, from $264,900 up to $289,900. [5] Homes are still selling just as fast as last year... with a median "days on market" of five days. So, while the number of homes selling might be slipping a bit compared to last year, prices are still rising, and homes are still selling very quickly. Now, let's break things up a bit by detached homes (green) and attached homes (orange) below... ![]() This chart pull a few things out that provide some helpful comparisons... [1] There have been slightly more detached home sales this year (734) as compared to last year (722) for a total increase of 1.66%. This has been accompanied by a year-to-date increase of 12.59% in the median sales price of those detached homes. [2] There has been a slight decline in the number of attached home sales this year (348) as compared to last year (353) for a total decrease of 1.42%. This has been accompanied by a larger, 12.13%, increase in the median sales price of those attached homes. So... we're seeing a slight uptick in single family home sales and a slight downturn in townhouse / duplex / condo sales... though the median prices of both property types are increasing. Finally, slicing and dicing the data one more time to compare the City and County, here's what we find... ![]() Here's what pops out to me in the chart above, when looking at a full year (Sep - Aug) of data... The pace of home sales has slowed a bit (-3%) in the City (#1) while the pace of County home sales (#2) has increased slightly (+2%). The median sales price has increased by double digits (+11%) in the City (#3) while the median sales price in the County (#4) has increased by a slightly lower amount (8.3%). So, again, lots of home sales at high prices in the City and County... but the pace of sales is slightly more robust in the County, and price increases are slightly higher in the City. Now, the summer that makes you say: Nice! Yikes! Hmmm... ![]() It was a wild summer in the Harrisonburg and Rockingham County real estate market... JUNE = NICE! We saw an incredible number of home sales in June 2022. The 188 home sales this past June was the highest single month of home sales in many, many years! JULY = YIKES! After sky high home sales in June, we saw the slowest month of July home sales in at least three years. July 2022 home sales weren't drastically lower than the previous few years but it was surprising (yikes!) to go from the "best June in 3+ years" to the "worst July in 3 years." AUGUST = HMMM... Home sales this past month were markedly lower than last August, with a 19% decline from 184 home sales to 149 home sales. But... home sales this August were still higher than in August 2019 and 2020. So... were home sales surprisingly slow this August? Or do they just look slow compared to a surprisingly active month last August? At this point it can be helpful to stack all of those months of home sales on top of eachother to look at things from a broader perspective... ![]() Here you can more clearly see that 2022 year-to-date home sales are barely sticking in the race with 2021. Yes, we have seen slightly more home sales thus far in 2022 than in 2021 (and than in the previous few years) but we're barely ahead now. It seems quite likely that the year-to-date pace of home sales will fall behind as we get through September and October of 2022, especially when we examine contract activity below. So, if you haven't picked up on it yet, it seems the rapid growth in the number of home sales we have been experiencing lately might be starting to... level off... ![]() During the height of Covid (2020-21) we saw an ever-increasing number of home sales on an annual basis, seemingly due in large part to the size and shape of "home" being more important than ever as people were spending more time at home during the pandemic... and because of historically low interest rates. Now, however, many of life's patterns (actually going to work, actually going to school) seem to be returning... and mortgage interest rates (if you haven't heard!?) are quite a bit higher than they were a year ago. So, it seems very unlikely that we will continue to see rapid growth in the annual pace of home sales like we saw between August 2020 and August 2021, and it seems more likely that we will see a leveling off, or even a slight slowdown, in the number of homes selling in Harrisonburg and Rockingham County each year. All of this, though, is related to the orange line above... the number of homes selling. Quietly, in the background, the median sales price (green line) just keeps on rising, and rising. The unknown, at this point, is whether we will see home prices start to level out at all. Thus far, they are continuing to rise quite rapidly. Speaking of rising prices, here's a graph that will put these price increases in context pretty quickly... ![]() In just four years (2018-2022) the median sales price of a single family home in Harrisonburg and Rockingham County has increased by almost $100,000... from $228,000 to $326,500! What a great time to have owned a home... and what a tough time to buy one now if you haven't owned a home for the past few years to be a part of a joyful ride up the roller coaster of home values. Here's another graph that provides further evidence of the likelihood that we will continue to see the market slow down when it comes to the number of homes selling... ![]() I've drawn the arrows above to show where I think things have been going and are going... Top Arrow = slight, slow, decrease in the number of buyers buying Bottom Arrow = slight, slow, increase in the number of sellers selling as it relates to active inventory at any given time So, indeed, the market may be transitioning a bit. A few fewer buyers are buying and a few more sellers are selling. These dynamics are turning our market, ever so slightly, towards a slightly less strong seller's market. But, yes, still a strong seller's market. Several times in this synopsis I have spoken about home sales slowing and referenced that I anticipate a further slowdown in the next few months. Here's why... ![]() The graph above is showing us contract activity per month in Harrisonburg and Rockingham County... counting how many homes go under contract each month. Last summer (the first set of 1, 2, 3) there were 143, 156 and 155 contracts signed for a total of 454 contracts. This summer (the second set of 1, 2, 30) there were 135, 114 and 135 contracts signed for a total of 384 contracts signed. So, indeed, fewer contracts for several months in a row has already started to translate into fewer home sales, and will continue to do so for at least another month or two in the future. With slightly fewer buyers buying are we seeing inventory levels starting to rise? Slightly... ![]() A year ago there were 129 homes on the market for sale at this time... and that has risen, slightly, to 147 homes for sale. So, yes, we are seeing somewhat of an overall increase in the number of homes for sale... but not by that much. And... from a shorter term perspective, inventory levels are currently trending down as they usually do as we move from summer into fall. Finally, one last graph for a bit of AHHHHH and GRRR... ![]() From the end of last summer (Aug 2021) through early 2022 we saw a rapid increase in mortgage interest rates. They rose from less than 3% up to over 5% in only eight months. Ahhhhh!!! Over the past few months, mortgage interest rates have shown they might not get all the way to 6%, but they haven't made their way back down to, or below 5%. Grrr... Comparably higher mortgage interest rates (as compared to the past few years) continue to have an impact on how many buyers are able to, or are willing to, buy a home right now... and it doesn't seem that these higher interest rates will be leaving us as quickly as they showed up. So... in summary... [1] The pace of home sales seem to be slowing, slightly, though 2022 is still ahead of 2021 at this point. [2] Contract activity is slowing, slightly, which means closed sales will also continue to slow. [3] Home prices continue to rise rapidly. [4] Inventory levels are rising, slightly. [5] Mortgage interest rates are still quite high. If you're thinking about buying a home, or selling a home, let's talk about how things are going in your segment of the market as it relates to the price, size, location and age of your home. The first step? Email me or text/call me at 540-578-0102. I'll check in on the market in about a month, but until then, enjoy the slightly shorter, cooler days ahead! | |
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Taylor Spring Detention Basin Under Construction In The Lake Shenandoah Stormwater Authority Area |
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![]() Homeowners on low lying building lots within the Lake Shenandoah Stormwater Authority Area may soon have some relief when it comes to stormwater issues affecting their property. One of the main stormwater management interventions being put in place by the Lake Shenandoah Stormwater Authority is the construction of the Taylor Spring Detention Basin... and that is well under way! The localized flooding experienced in some parts of some neighborhoods in the stormwater authority area have been a result of water flowing through the area towards Lake Shenandoah... and now (soon) stormwater flowing through the area will be detained in this new (large!) stormwater basin before continuing downstream to Lake Shenandoah. Rockingham County purchased 28.9 acres back in 2020 and the County is now constructing a 6.7 acre detention basin. This basin is not designed to permanently store the water as it is expected to drain within a few days of a rain event. Read much more about this Stormwater Basin project and see many more photos in this update as of about a month ago. | |
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Indeed, Fewer Homes Went Under Contract This Summer Than Last |
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![]() Indeed, as is shown rather clearly above, fewer buyers signed contracts to buy homes this summer than last. When I'm talking summer, in this instance, I'm referring to June, July and August...
So, about 15% fewer contracts were signed this summer than last. Why? A large part of it is likely the higher mortgage interest rates.
But despite fewer houses going under contract this summer than last...
If mortgage interest rates remain as high as they are now, it is reasonable to assume that home buying activity will continue to be a bit subdued this fall compared to last fall. | |
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Which Comes First? Buying Your Next Home Or Selling Your Current Home? |
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![]() If you are getting ready to sell your home AND buy a home, it can sometimes be difficult to determine where to start... Do you start by finding a house you want to purchase? Or do you start by listing your home for sale? I would suggest that you start with whichever you anticipate will be the most difficult part of the two step process. If it will be difficult to sell your home (because of price, location, layout, features, age, etc.) and it will be at least slight easier to buy the next one (plenty of viable options are listed for sale) then you are likely best off starting with listing your home for sale. Work to get the more difficult half of the transition underway by getting your current home under contract, and then work on the easier side of the transition. If it will be more difficult to buy the next house (because of the specificity of your housing goals, or because of low inventory levels, etc.) and it will be at least slightly easier to sell your current home (because the property type, location or price are in high demand) then you are likely best off focusing first on finding the home to buy -- and then listing your home for sale. There are plenty of nuances we can discuss further to formulate a plan for attempting to simultaneously sell and buy -- but as a general rule of thumb, you'll be best off to start with the harder half of the transaction. | |
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If You Are Hoping To Negotiate On Price, An Offer On Day One Might Not Make Sense |
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![]() Ooooh... an exciting new listing just hit the market! It's in the neighborhood where you hope to live, has just the right amount of space, has the garage you've been hoping for, and... oh wait... ugh... the price is a bit higher than you had hoped. This imaginary (but very exciting) new listing is priced at $425,000. You had been hoping to spend no more than $400,000. So, what to do... If you go see the house, and love it even more in person, do you make an offer of $400K on Day 1? Probably not. A home seller is not likely to accept your offer of $400K on Day 1. They will likely wait for other showing to happen, hoping to have another offer to consider... AND... they will let all other buyers who view the home know that they have an offer... and they won't need to clarify that it's only an offer of $400K. So... if you are hoping to negotiate on price, it probably does not make sense to make an offer on that first day... unless you were really willing to pay the full list price if needed. If you wait a few days, or a week, to make an offer... someone else might make an offer, which could then give you the option to make an offer as well... or if nobody else makes an offer, perhaps you will then be able to negotiate on price. | |
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As Time On The Market Increases, Contingencies In Offers Often Increase |
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![]() Day 1 - If a buyer is interested enough to make on Day 1, and potentially be competing against other highly motivated buyers, there is a good chance they will waive some or many or all contingencies. They might not be proposing a home inspection, a radon test, or an appraisal contingency. Day 7 - If a listing is still available on Day 7, a buyer will likely tentatively feel comfortable proposing some contingencies (home inspection, radon test, appraisal, etc.) but perhaps not all of the above. Day 30 - If a listing is still available on Day 30, a buyer will likely feel comfortable proposing any and all contingencies, including a home inspection, radon test and an appraisal. Home Buyers -- Do you want to wait to make an offer to potentially be in a position to include contingencies that you'd prefer to have as a part of your purchase contract? Even knowing that waiting to make the offer might mean someone else buys the house before you make an offer? | |
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48 Apartments, 26 Townhomes and A Mixed Use Building Proposed For Corner of Boyers Road, Port Republic Road |
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![]() A new proposal has emerged for developing the 5.7 acre parcel of land at the corner of Port Republic Road and Boyers Road. S&B Ventures, based out of Mount Crawford, is proposing a rezoning to allow for 48 apartments, 26 townhomes and a mixed use building. Here is the proposed layout on the land... ![]() download a larger file here Some commentary from the developer provides some context for this potential new development... "The townhomes along Boyers are all oriented to take advantage of topography, with building "fronts" facing Boyers, and with on-site community green spaces and walkways connecting the community. There will be landscaping designed along Port Road with street trees and other landscaping to buffer parking on the site visually from Boyers." "Some community scale commercial uses are retained directly along the busy Port Road frontage to provide future small business/convenience commercial options to serve local surrounding neighborhoods. There is a multi-use path along the entire length of the Boyers Road frontage, which connects to existing sidewalks on Port Road." The Rockingham County Planning Commission will consider this rezoning request at their meeting on September 6, 2022. | |
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Most Conditions Are More Favorable For Buyers Now Than A Year Ago, Though Not Mortgage Interest Rates |
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![]() If we ignore mortgage interest rates for a moment (how can we!?) I believe it is accurate to say that home buyers are finding conditions to be more favorable now than a year ago. Here are the main factors making the local real estate market at least a bit more favorable for buyers now compared to a year ago... INVENTORY IS UP - We aren't seeing a massive increase in the number of homes available for sale at any given time, but we are seeing a slow rise in the number of active listings, which gives a buyer slightly more choices at any given time. TIME ON MARKET INCREASING A SMIDGE - It's often hard to back this up with data, but it seems that some new listings are sticking around on the market for a few more days (or even a week - gasp) longer than a year ago. This gives buyers a touch more time to consider whether or not to make an offer. FEWER MULTIPLE OFFER SCENARIOS - Some houses are still seeing multiple offers within the first day or two of being on the market, but quite a few are only seeing one offer. This allows a buyer to think more rationally about the price they are willing to pay, and goes a long way towards curtailing the flurry of escalation clauses causing prices to increase ever higher. INSPECTION CONTINGENCIES ARE OK AGAIN - Some buyers are reintroducing this novel concept of a... home inspection!? What a wonderful world where buyers can spend more than 45 minutes in a house to learn about the house, and even with a trained professional that can give them a much fuller view of the house characteristics and potential deficiencies! APPRAISAL CONTINGENCIES MIGHT MAKE A COMEBACK - We're starting to see appraisal contingencies again on some offers, and why not!? If you're not competing with another offer, why not include an appraisal contingency. It only seems reasonable. So... even if buyers today are finding themselves in what is certainly still a seller's market, the buying environment is indeed marginally better in multiple categories today as compared to a year ago. The two downsides, though, are that mortgage interest rates are MUCH higher now than a year ago, and the price you will pay for any particular house is likely a good bit higher now than a year ago. | |
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Are Home Buyers Walking Away From Contracts In Harrisonburg? |
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![]() You may have read in recent news headlines that home buyers are cancelling their contracts to buy homes left and right. Here is one such news story... Homebuyers are backing out of more deals as high mortgage rates persist and recession fears linger (CNBC) This would cause plenty of people in our local area whether this is also happening locally. Are home buyers walking away from contracts in Harrisonburg? I'm going to say, anecdotally, a strong NO. That phenomenon does not seem to be happening in any significant way in the Harrisonburg and Rockingham County real estate market. Buyers generally seem to know what their mortgage interest rate is going to be before they make an offer (via a conversation with their lender) and are then locking in their interest rate once they are under contract. So, should sellers now wonder if their buyer will really make it to closing or if they might decide to back out of the deal? That does not seem to be a concern a buyer needs to have any more than at other times in the past 10+ years... at least in Harrisonburg and Rockingham County. | |
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The Strength Of The Local Housing Market Is Likely To Start Varying By Price Range, Location And More! |
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![]() For the past few years the market has been moving so quickly, with such an excess of buyers in nearly every price range, that just about every house would sell very quickly - regardless of the price range and location. But... as interest rates have been rising over the past six months, there seems to be some variation in how strong different segments of the market are, based on price range, location, property type and more. If you are planning to sell your home this fall we need to look carefully at homes in your particular neighborhood, price range, etc. to see how quickly they are selling... and to compare the prices for which they are selling now compared to three or six months ago. | |
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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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Plenty Of Properties Likely Sold Above Appraised Value Over The Past Few Years But Fewer Are Likely To Do So Moving Forward |
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![]() Home buyer attitude towards appraisals has certainly shifted over the past few years! PRE-COVID... Most buyers would include appraisal contingencies in their offers to reserve the right to have a conversation with the seller about the sales price if the appraised value ended up being lower than the contract price. Most sellers were comfortable with these appraisal contingencies and found them to be reasonable. EARLY COVID... Some buyers started to leave appraisal contingencies out of their offers to compete in multiple offer scenarios. These offers were no longer contingent on the property appraising at or above the contract price. IN THE THICK OF COVID... The market just kept heating up over the past few years, during Covid, and eventually, home buyers almost always found themselves competing with multiple (or many, or multitudes) of other offers. Home buyers started adding in specific language to their offers agreeing to proceed with the purchase so long as the appraised value wasn't any lower than $____ below the sales price, or agreeing to proceed with the purchase regardless of the appraised value. These offers would significantly reduce (or eliminate) the possibility of an appraisal disrupting the home sale. Home buyers were willing to go this route to try to compete to secure a contract on a house... and home sellers were delighted! NOW... Some new listings are still having 5+ offers within a few days, but plenty are only having one or two offers. With fewer competing offers, and with a feeling that the market might be slowing a bit, more home buyers are revisiting the topic of whether to include an appraisal contingency. Some buyers are now including appraisal contingencies in their offers once again. Buyers should likely decide whether to include an appraisal contingency based on whether they are competing with other offers, and based on how much they like a particular property. Some sellers find the return of the appraisal contingency to be quite reasonable. Some sellers think it is a terrible thing, and are insistent that they should be able to sell their home for more than an appraised value. Sellers should likely decide whether to accept an appraisal contingency based on how much interest exists in their home, how many offers they have, how long it has been on the market, etc. A shift in the way that home buyers and sellers see appraisal contingencies is normal as we start to see some early signs that the local housing market might be slowing down from a sprint to a fast run. As with all things housing market related right now, the dynamics described above to not equally apply to all property types, price ranges and locations. :-) | |
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Do Home Prices Rise As Interest Rates Fall, And Fall As Interest Rates Rise? |
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![]() Q: Do Home Prices Rise As Interest Rates Fall, And Fall As Interest Rates Rise? A: Sometimes In the graph above I tracked the median sales price of single family homes sold in Harrisonburg and Rockingham County over the past 20 years (blue line) as compared to the average mortgage interest rate (orange line) to try to answer the question above. I then looked for years where there was a significant increase (or decrease) in the median sales price paired with a significant decrease (or increase) in the mortgage interest rate. I found 7 years where this happened... out of 20 years. There were also plenty of years where the two metrics tracked alongside each other in the same direction... prices fell while rates fell... or prices rose while rates rose. So... it does not seem that a decline in rates is likely to necessarily result in higher prices... or that an increase in rates is likely to necessarily result in lower prices. Though, of course, sometimes (not usually) that does happen. The question is asked, of course, in the context of rapidly rising mortgage interest rates. The answer we are all seeking, of course, is whether these higher rates will result in lower sales prices. History does not indicate that will definitely happen, but it is certainly possible given how higher mortgage interest rates affect how much a buyer can pay for a house and how many buyers can qualify to buy any given house. | |
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If High Mortgage Interest Rates Having You Looking At Renting Instead Of Buying, Unfortunately You Will Also Find High Rental Rates!?! |
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![]() Some (many?) would be home buyers are discovering that mortgage interest rates are making their potential monthly housing costs much higher than anticipated. Just a year ago, the mortgage interest rate was 2.8% for a 30 year fixed rate mortgage and now it's 5.3%. Combine higher mortgage interest rates with higher home values and today's buyers find much higher mortgage payments... A Year Ago... $225,000 = 2021 Median Sales Price of Townhomes, Duplexes and Condos $1,038 = monthly payment assuming 10% downpayment, 2.8% mortgage interest rate Today... $241,767 = 2022 Median Sales Price of Townhomes, Duplexes and Condos $1,431 = monthly payment assuming 10% downpayment, 5.3% mortgage interest rate So, the potential monthly housing cost of buying a median priced townhouse has increased from $1,038 to $1,431 in the past year. This might cause some (many?) would be buyers to explore renting instead. But... rental rates have also increased significantly over the past year! I don't have a large data set to support this statement, but generally speaking, townhouses that might have rented for around $1,100 a year ago are now often renting for $1,350 or more. So, perhaps rental rates aren't increasing as quickly as monthly housing costs if you purchase a townhouse... but these higher rental rates mean that choosing to rent instead buy doesn't provide quite as much relief of your housing costs as you might imagine. | |
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Median Price of Single Family Home in Harrisonburg and Rockingham County Rises 67% Over 10 Years, 140% Over 20 Years |
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![]() Single family home values have not always increased in Harrisonburg and Rockingham County over the past 20 years... but they have mostly increased, and they have significantly increased over a 10 year and 20 year time horizon. 10 Years Ago = Median Sales Price of $195,000 Now = Median Sales Price of $325,990 67% Increase over 10 Years 20 Years Ago = Median Sales Price of $136,000 Now = Median Sales Price of $325,990 140% Increase Over 20 Years Over these past 20 years, the median sales price increased during 12 years, decreased during four years and had a change (+/-) of less than 2% during four years. The average increase per year in the median sales price in Harrisonburg and Rockingham County was 4.5%. | |
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33 Townhouses Proposed To Be Built In The City of Harrisonburg, At The Entrance To Cobblers Valley |
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![]() Ryan Homes is currently building a neighborhood called Cobblers Valley in Rockingham County now 33 townhomes are proposed to be built in the City, at the entrance to Cobblers Valley. The property is already zoned for townhouses but the developer is requesting a subdivision ordinance variance to allow the townhouse lots to be built on a private street instead of a public street. You can download the reference documents from the Planning Commission's summary of the request here. This is the proposed layout of this small section of townhouses in the City... ![]() | |
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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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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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