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November 2020 Temperatures Assisting Outdoor Gatherings, Local Housing Market |
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 It has been a fantastic week of near 70 degree weather and it looks like those temperatures will hold over the weekend and at least into early next week! There are plenty of upsides to these temperatures... 1. We can keep spending time outdoors in groups instead of indoors, reducing the likelihood of spreading germs. 2. Home sellers can keep getting good work done on the outside of their home to prepare their house for the market. 3. Home buyers can fully explore houses and the lot or land upon which they sit without feeling like they are going to freeze as is often the case in November. Have a terrific weekend! | |
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If You Are Not Getting Offers On Your House, Will You Wait, Or Lower Your Price? |
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 If you are selling your home and it is prepared well and marketed well, you will likely have a decision to make related to time and price... TIME - Are you willing to continue to wait for the right buyer to come along, eventually, hopefully - that will come to a different conclusion about your house than previous buyers who did not make an on your house? PRICE - Are you willing to adjust the list price of your house to try to make it more attractive to potential buyers and to expand the pool of potential buyers who can afford to buy your house? If your home has been on the market for 60 days without an offer -- or if it has been 60 days since your last price reduction -- you should reflect on whether you choose to value time or money more over the forthcoming 60 days. You can always continue to wait for new buyers to enter the market that hopefully will find your house to be just the right fit for them - or you can adjust the price to try to make your house more attractive to buyers who have and who have not yet seen your house. What will you choose if 60 days have passed without an offer on your house? | |
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Missing Out On House After House As A Buyer |
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 Some buyers in this market -- particularly those seeking a home under $250K -- are likely feeling like they are missing out on house after house. It is a tough time to buy a house under $250K and there is a LOT of competition from other buyers. Many buyers are thus finding themselves having to approach each new listing asking themselves how far above the list price they are willing to go for the house they are viewing. A few thoughts... 1. Just because you missed out on ANOTHER house on which you made an offer - that does not necessarily mean that your offers were not reasonable and your offer terms were not strong. It likely just means that some other buyer made an even stronger offer - be that in regards to price or the other terms. 2. If you walk into a new listing and find it to be a near perfect fit for what you are hoping to buy, or a better fit than anything else you have seen, it is reasonable to consider offering a good bit ($5K? $10K? $15K) above the asking price to try to be buyer who gets to but that house. 3. Carefully weight whether you would want to do something like removing your home inspection contingency. If a seller receives two offers of $240K on a $230K house and one buyer will be doing a home inspection and the other will not, the seller is likely to choose the offer without an inspection contingency. You shouldn't necessarily waive the home inspection, but that is likely a way to make your offer more competitive. 4. Don't grow discouraged. Don't give up. Keep trying. It can be depressing to miss out on house after house - but eventually you really will secure a contract on a house. Get out there early to see new listings and make as strong as an offer as you are comfortable making. Best of luck, buyers. It's a tough market out there! | |
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Buyers Kept Showing Up In October 2020 |
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 Who cares about normative seasonal changes in home buying activity... ...this is 2020! :-) Usually, buyer activity (contracts being signed) starts to slow down in October. We usually see around 110 contracts signed during the month of October. But not in October 2020. This year, there were 147 contracts signed! I'll take a full look at market activity in October in the next week or so, but until then, rest assured that buyers keep on buying, even as the weather gets colder and the leaves fall off the trees! | |
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Home Buyers and Sellers Think Differently About Repairs After A Home Inspection |
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 While not always the case, a general rule of thumb is that... On home inspection repairs...
Inspector: Several roof shingles are missing, and the roof is past its life expectancy. Seller: Replace the shingles. Buyer: Replace the roof. Inspector: The air handler coils are dirty and the heat pump is reeaaallly old. Seller: Clean and service the heat pump and air handler. Buyer: Replace them both! These are a few extreme examples to start to show the differences in perspectives on repairs. Again, the important thing here is to recognize that a buyer and seller look at home inspection reports differently. A seller typically wants to minimize their repair costs while keeping the home sale on track. A buyer wants to make sure that any previously unknown property condition issues are addressed in a manner that is likely to prevent further near term maintenance needs in those areas. So, what is a buyer to do? A few thoughts....
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The Movie Theater (Regal Cinemas) In Harrisonburg Is Closed, Permanently |
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 So much for catching the latest new movie on the big screen!?! The 9.6 acre parcel shown above - known to us as Regal Cinemas plus its very larger parking lot - is now owned by Armada Hoffler Properties. It would seem the tenant of the property (Regal Cinemas) defaulted on their lease and thus the company (Armada Hoffler Properties) terminated the lease. This shouldn't be an enormous surprise as the movie theater closed this past spring due to COVID and its parent company has ceased operating all theaters across the country earlier this month. But... it seems that this 9.6 acre property will not be sold... the owner of the property plans to redevelop the property. I assume this means they will tear down the building and build a much larger mixed use development, as the majority of the land is currently used for parking. Read more about this over at The Citizen... | |
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Million Dollar Home Sales In Rockingham County, Virginia |
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 If you're planning to sell a property in Rockingham County for more than a million dollars, it's important to realize how small this pool of potential buyers has been over the past ten years. As shown above, there has been average of one such sale every 20 months over the past decade. Curious about the details of those six million(+) dollar sales? You'll find them here. Do you have a million(+) dollars burning a hole in your pocket? Here are the nine current properties for sale for $1MM+ in Harrisonburg and Rockingham County. | |
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Where Might You Build Your New Home In Harrisonburg or Rockingham County? |
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 Where might you build your new home? There are 118 building lots for sale in Harrisonburg and Rockingham with public water and sewer priced under $200K. The list below shows the subdivision / location of the lots. If you're interested in further details about any of these lots or locations, let me know!
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Seasonality Might Matter A Bit Less For Sellers Given Low Inventory Levels |
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 If you had asked me a year or two ago whether it was a good idea for a homeowner to list a home in November (if they would be fine waiting until Spring) I would have said it wasn't necessarily a bad thing -- but it certainly also wasn't a surefire path towards success. In reflecting on this with a homeowner last week, though, we came to a different conclusion -- because inventory levels are SOOOO low! So, here's my revised November advice to would be home sellers... If you would rather sell now/soon instead of six months from now - and if you are in a segment of the market that is under supplied - then let's go ahead and get your house on the market! Looking at historical inventory levels...
Today... there are 162 homes on the market for sale! So, if you want to sell in the next six months, maybe we should be talking now about getting your house on the market in early November! | |
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Confused By Some Data On Zillow? You Are Not Alone! Here Is Why It Happens! |
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 If you use Zillow to peruse real estate listings or to search for your dream home, you might be baffled at some of the data you are seeing sometimes...
If you're getting confused when perusing the details of a property on Zillow, don't spend too much time trying to figure out what is going on. It's much more likely that Zillow is unintentionally creating the confusion than it is that the property is actually that confusing. The details of any given property on Zillow end up being a combination of data from the local real estate records (for example Harrisonburg and Rockingham County) which is then combined with, augmented by, corrected by the data coming from the MLS. It's the latter half of that (data from the MLS) that can end up causing some of the confusion. Basically, our MLS has one set of fields in its database, and the data in those fields is feeding into another set of similar but not identical fields in the Zillow database. Sometimes the data coming out of the MLS doesn't quite end up where it ought to on Zillow, causing Zillow to show some erroneous and confusing property details. So - if you're stumped by some of the details of a property on Zillow - do not fret - just shoot me an email (scott@hhtdy.com) and I'll see if I can sort things out for you. | |
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Think Twice Before Ignoring That Low Offer On Your Home |
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  If you have not yet had an offer on your house (that is listed at $300K) and you receive an offer of $250K, that doesn't necessarily mean your house is only worth $250K, nor does it necessarily mean that you should accept $250K or something close to it. It does, however, mean something quite exciting --- somebody wants to buy your house!!! Of course, negotiations won't always work out with low offers -- but recognize a low offer for what it is -- a buyer who wants to buy your house, and perhaps the first buyer who has declared as much through a written offer! If there is any way to put a deal together with those buyers, you ought to pursue it, as it's hard to know when the next buyer will work up the courage to tell you that they want to buy your house! | |
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Harrisonburg Area Home Sales Over $500K Continue To Soar In 2020 |
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 Only 5% of local home buyers spend $500K or more on their home purchase (per sales data over the past year) but this segment of the local housing market has been strong over the past few years. As shown above, there were 47 home sales over $500K last year - which was more than any time in the past decade. This year we have already exceeded that pace of $500K+ home sales even with just the first 9.5 months of the year. There have been 54 home sales over $500K up through October 19, 2020 and there is still time for a few more before the end of the year. Reigning in our enthusiasm a bit, though, this is a relatively small number of buyers. If you are selling a home over $500K, you need to keep in mind that only about 50 buyers per year (just over 4 per month) spend that much money on a home in ALL of Harrisonburg and Rockingham County!  Last year was an extraordinarily strong year for home sales over $600K - with 27 such sales - well more than in any other year in the past decade. This year -- we're seeing even more $600K+ home sales, with 29 thus far and still two and a half months to go! And one more look at an even higher price point...  Above, you'll see that most years there are only 5 or fewer home sales over $700K. But back in 2015 there were 11 (which was more than double the norm) and last year there were 14 such sales. This year seems to also be a very strong year for these $700K+ home sales, with 12 thus far. So -- overall, the high end home sales market is doing well -- comparatively, but that is not to say that selling a home over $500K is an easy task - it's not. Home sellers over $500K are aiming for a tiny pool of potential buyers -- even if that pool of buyers might be stronger this year (and last year) than in most other recent years. | |
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Preston Lake Has A Swimming Pool! |
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 Check out the new swimming pool at Preston Lake! Preston Lake is located just east of the City of Harrisonburg in the Shenandoah Valley of Virginia and now features an enormous clubhouse with a fitness center, a lake with surrounding walking path, lots of beautiful and well maintained open space and a playground! Looking to live at Preston Lake? A four townhouse townhouse was just listed for sale (by me) located adjacent to the beautiful Village Green! Find out more here: 3297BatteryParkPlace.com Here's the new townhouse listing...  ...and here's the Village Green...  | |
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Tell the City of Harrisonburg What You Think Should Change (or stay the same) In The Zoning and Subdivision Ordinances |
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 The Zoning and Subdivision Ordinances for the City of Harrisonburg have not been thoroughly updated in over 20 years! There have been a variety of smaller updates to the ordinances over the years, but, as the City points out the result of all of these small changes since 1996/1997 have been... "ordinances containing outdated requirements, internal inconsistencies, and ordinances that can be difficult for community members to comprehend" The City is currently in the midst of updating these ordinances, and they'd like your input! Click here to take a community survey to provide input as the City works on updating these ordinances. Click here to read more about the process for updating the ordinances. | |
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Contract Activity Continues Full Steam Ahead In October 2020 |
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 Home sales usually start slowing down in October - but not this year. In the first two weeks of October we usually see forty-something contract signed by buyers and sellers in Harrisonburg and Rockingham County. This year -- 65 contracts were signed during that timeframe! I assume at some point things will start to slow down, somewhat, but it isn't happening as quick as you might think it would given the time of the year. So, if you're thinking of selling your home but are wondering whether you should wait until the spring market - you might not need to wait after all! | |
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How Many Unrelated People Can Live In A House In Harrisonburg? |
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 It is a common misunderstanding that the zoning classifications can be interpreted as follows...
In fact, it doesn't work that way at all. So, how can we understand the limits of how many unrelated people can live in a property based on the zoning of that property? The city has all of this information neatly organized on their website here. I have included a (somewhat blurry) screen capture below. Of note, there can be exceptions to these generalities -- based on a special use permit for a property, or if a property use is "grandfathered in" based on that use existing since before zoning regulations limited the use. But this is a very helpful starting point for understanding how many unrelated people can live in a property in the City based on the zoning of that property.  | |
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Different Strategies for Buying A Rental Property For Your College Student |
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 Option 1 -- A property in a traditional student housing neighborhood. These will allow the most students to live in the property and will maximize the rental income per dollar spent on the purchase. However, it will also expose you to a more turbulent segment of the market, as rental rates and sales prices of these properties can vary quite a bit over time as the supply of competing student housing ebbs and flows based on large complexes being built by student housing developers. You can find purchase options in this category here. Option 2 -- A townhouse in a community that has many owner occupants, some non-student renters and some student renters. Many of these will not allow as many unrelated students to live in the property (per zoning regulation or restrictive covenant) and will not provide quite as much rental income per dollar spent on the purchase price. However, they will be in segment of the real estate market that is much more predictable and less volatile from a rental rate and/or sales price perspective. You can find purchase options in this category here and here. I work with parents of JMU students each year who go down each path outlined above, each for different reasons. Most of the time, though, it boils down to their tolerance for risk or their desire for reward. It can also be related to their intended time horizon for owning the property. If you are interested in buying a rental property for your son or daughter to live in while they are at student at JMU, let me know. Oh, and you might also want to read up here... | |
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Sometimes Buyers React Irrationally To Home Inspections |
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 The purpose of a home inspection contingency is to allow a buyer to learn more about the property they have contracted to purchase -- and then to request repairs to the property if they discover new issues of which they were unaware when they contracted to purchase the property. For example -- a buyer contracts to buy a home for $250K and believes the electrical wiring and plumbing are all in good condition. The home inspection takes place and the inspector discovers that there are four plumbing connections that are leaking in the unfinished basement. It is then reasonable for the buyer to ask the seller to repair these plumbing leaks prior to closing. They agreed to pay $250K for a house that they did not believe had plumbing leaks -- and thus they request the seller restore the house to being a leak-free house. This is certainly an oversimplification of the matter, as there are often many discoveries during a home inspection -- of varying levels of seriousness or complexity -- but stick with me for now. Back up at our prior example -- rarely would a seller be disappointed, surprised, or unhappy if a buyer asked for plumbing leaks to be repaired. But what is a seller to do when a buyer starts to behave irrationally -- in a way that the seller believes no other buyer would certainly ever respond? For example --
I could go on and on. The point is -- sometimes buyers behave irrationally -- for whatever reason they have decided that they cannot / will not buy the house, and they are going to dig in their feet and make irrational repair requests until the seller finally caves and releases them from the contract. Or, rather, given the standard Virginia home inspection contingency, the buyer just terminates the contract on the basis of the home inspection even though their decision to do so was based on a view of the property condition (and of needed repairs) that is unlikely to be shared by any other buyer, ever. So, what in the world is a home seller to do in such a situation?
Of course, I hope this advice is absolutely never pertinent to you. May you never be in the midst of a home sale -- under contract -- just working your way through contingencies and excitedly anticipating a closing in the near future -- and then have the rug pulled out from under you by a home buyer with unreasonable expectations or demands. But if you do find yourself in this situation, try to move on quickly and be transparent with future buyers -- after getting angry, frustrated and discouraged, of course! | |
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Harrisonburg Area Home Sales and Prices Soar In September 2020! |
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 Happy Monday Morning! What a wild year this has been - and it is now, already, more than three quarters of the way to the end. Many things have been turned upside down in our daily lives, but as this year has continued to progress, one thing that has not been affected as much as you might expect has been our local real estate market. We're seeing more home sales this year than last, at higher prices, taking place at record speeds. Before we dig into the data, be sure to check out Founders Way, a condo development currently under construction just minutes from downtown Harrisonburg. Find out more about these new two bedroom condos starting in the $170K's by visiting FoundersWay.com. Now, feel free to download a PDF of my entire monthly report, or read on for some juicy tidbits to start your week off right...  First, from a big picture perspective, referencing the chart above...
So, again, repeating the story from above - COVID has created plenty of train wrecks, but our local housing market has been able to keep on moving right along, full steam ahead. Now, looking for a moment at detached homes compared to attached homes...  The green portions of the chart above show the trajectory of detached homes, and you might note that there have been slightly fewer (735 vs. 737) of these sales in 2020 when compared to 2019. Despite that ever-so-slight slow down, however, the median sales price of those homes has increased 9%! If detached home sales have slowed down, slightly, attached home sales have been running in the opposite direction, quickly. We have seen an 11% increase in the number of attached home sales in 2020 as compared to 2019 - and again - a 9% increase in the median sales price of these attached homes. Now, for the visual learners, let's take a look at September again...  As shown above, September was a wild month for home sales. The (150) home sales seen in September 2020 make it the second highest month of home sales for the year - which is quite atypical for September! I assume that home sales will slow down quite a bit in October, and then much further in November and December -- but this year has been anything but predictable, so who knows!?! Oh, and did I mention that 2020 finally caught up with 2019?  Back in March and April, I noted that 2020 was off to a STRONG start -- with more home sales in the first quarter of this year than in any recent year. But then, COVID. Many fewer sellers put their homes on the market in March, April and May, which resulted in fewer buyers being able to buy houses, which slowed down the annual pace of home sales quite a bit as we progressed through late spring and then through the summer. But then, September! The high sailing month of home sales in September caused our year to date trajectory to pop above all recent years again. So, 2020 is a great year - or at least for home sales in Harrisonburg and Rockingham County! Want another visual of the impact of COVID?  The weird dip in the orange line on the graph above is the impact of COVID. Our annual pace of home sales started dropping about five months ago, and we can only now confidently say that we're back on track to see the expected overall increase in that trajectory of home sales in this area. But that green line!?! Despite a slow down in home sales, we continued to see the median price rise, rise and rise some more. Maybe because COVID caused inventory levels to dip even lower, causing buyers to be willing to pay even more for a house? Maybe because the super low mortgage interest rates allow a buyer to be more flexible on price? Nobody knows for sure, but those prices, they keep on rising! Speaking of prices rising...  Over the past five years we have seen an average annual increase in the median sales price of 5% per year. This year, it is looking like it will be a 9% increase. This is not totally surprising -- more buyer interest, lower inventory levels, low interest rates, etc. -- but prices can't rise at 9% per year forever, so 2021 and 2022 will be interesting to watch to see how much further prices can or will increase. And now, looking back a bit to look forward...  A few things to note here, on the graph above. First, it was a summer FULL of contracts. There were 34% more contracts signed this summer than last, and 32% more signed this September than last. Thus, it seems relatively likely that the strong home sales we have seen thus far in 2020 will continue on through at least October and likely into November. How many times have I said "low inventory levels now"?  There it is, visualized, above -- the agony of buyers in our current local housing market. Inventory levels are at historic low levels. Never have there been fewer homes on the market, for sale, at a single point in time in Harrisonburg and Rockingham County. We have seen a 46% decline in active inventory over the past year. Now - keep in mind, we have seen a 2% - 3% increase in home sales, so these low inventory levels just mean that as quickly as new listings come on the market they are being scooped up by a buyer, preventing them from contributing to the "number of homes for sale" metric which we call "inventory". Unfortunately, I don't anticipate that these inventory levels will shift upwards anytime soon unless it is due to new construction at a large scale. Finally, a few times above I have noted that prices are rising - and this is perhaps one of the reasons why buyers can pay higher prices without blinking...  As shown above, the average mortgage interest rate keeps on falling. A year ago it was 3.64% and now it's down to 2.9%. These super low interest rates create a great opportunity for today's home buyers to lock in ridiculously low interest rates -- and they soften the impact of rising home prices. Alright, I'll pause here for now. If you've made it this far, thanks for taking the time to seek to better understand our local housing market. For more such joy, feel free to check out my blog or shoot me an email (scott@hhtdy.com) with any questions you have about our local housing market or about your house. Some key take aways... BUYERS
SELLERS
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Is October (Right Now) Too Late In The Year To List Your Home For Sale? |
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 I believe this question is best answered by evaluating when buyers make an actual buying decision -- which is when they sign a contract. The data above shows when buyers sign contracts -- calculated by averaging data from the three most recent years. As can be seen, the busiest buying season is March through August when an average of 136 buyers per month make a buying decision. The remaining six months of the year (September through February) show anywhere between 46% and 79% as many buyers as the average of 136 per month seen in the busiest six months of the year. So -- listing your home in October is not at all a bad idea based on this data! As shown above, it's likely the highest month of buyer activity that we'll see between now and next March. Even late October can work, as we're likely to see 60% as many buyers signing contracts in November as compared to the average busy month. That said, in the following month (December) we're likely to only see about half as many buyers as compared to the average month. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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Commonwealth of Virginia
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