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Focus On What You Can Control When Making Sense Of Buyer Feedback |
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As a home seller, you will face rejection left and right -- many prospective buyers will come view your house and most of them will decide not to buy it. But how, as a seller, do you make sense of that feedback? I often hear the following types of feedback after a showing:
This type of feedback (size, location, floor plan) is difficult to do much with as a seller. You likely aren't going to build an addition to your house, nor will you physically move the house, nor will you reconfigure the floor plan. Sometimes the feedback is just a mild objection to be overcome -- did you realize that the unfinished bonus room could be finished quite inexpensively (size) and that the new South East connector will make your commute quite short (location)? Oftentimes, however, if you receive feedback about size, location or floor plan there isn't much you can do about it as a seller. I also, however, will hear the following types of feedback after a showing:
This type of feedback (price, condition, marketing) is completely in your control as a seller. Many buyers will not make an offer if they think your list price is too far from reality -- adjusting your pricing may be just what you need to either generate more showings, or have a chance of the showings turning into offers. I almost included AGE as a factor outside of a seller's control, but it's much more about condition -- how well has a property been maintained, and is it in top showing shape so that buyers don't feel overwhelmed by short-term cosmetic updates and long-term maintenance needs? Finally, if a house has not been marketed thoroughly and effectively, it will likely have a much longer "days on market" than other properties, worrying buyers that perhaps they shouldn't buy the home because nobody else has in the last ten months. Read more about, think more about, and learn more about selling your house at SellingAHomeInHarrisonburg.com. | |
Home Sales, Prices Continue To Rise in Harrisonburg, Rockingham County |
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Autumn is here! Leaves are falling. Temperatures are falling. Home sales are not -- and prices are not! So, brew yourself a cup of coffee or tea, and let's take a look at some market trends for our local housing market... But first -- find out more about the new homes (rendering above) being built in McGaheysville by visiting IslandFordEstates.com. Now, onto the data, though you can skip to the full PDF report here. September was another solid month of home sales in Harrisonburg and Rockingham County. As shown above...
Breaking things down between detached homes (single family homes) and attached homes (duplexes, townhouses, condos) we see some trends that have been consistent throughout the year...
And let's look a bit closer at the month to month trajectory... A few things stand out above...
Looking afresh at how this year stacks up to prior years... This has been the fastest (though not by a huge amount) start to the year that we've seen in a while. The 1,017 home sales through the first three quarters of the year surpasses sales seen during the same timeframe in each of the prior four years. So, it seems we may see another year of 1,300+ home sales in our area. Zooming out -- looking at a rolling twelve months of market data -- we find a slow and steady increase in sales prices over the past year, and a slow and steady increase in the pace of home sales. All indications are that this could / might / should continue on into the remainder of 2019 and potentially 2020. Taking one more look (above) at value trends we see that the median sales price of detached homes was a190K five years ago -- and has risen to $240K today. That's a healthy increase in home values, though with annual increases of 2% to 7%, it doesn't seem that the overall increases are as unsustainable as they were during the 2003-2007 market boom. This (October) could be the last strong month of contract activity for a while. Above you'll note that contract signing slowed quite a bit between November and February -- and I expect we'll see something similar this year. The 100 contracts signed in September 2019 was on pace with the 102 seen last September. The new norm seems to be fewer than 300 homes on the market at any given time. Over the past 11 months there have always been fewer than 300 homes for sale -- though no fewer than 255. This is a far cry from where inventory levels were a few years ago, but perhaps this is where we'll be staying for a while. Buyers don't have many options at any given time, and yet, we're on track for a record setting year of home sales. If buyers are sad about declines in inventory levels, they certainly aren't sad about declining interest rates! A year ago, the average 30-year interest rate was 4.72% and now it's down over a full percentage to 3.64%. This certainly makes it an affordable time to lock in a housing payment. A few closing thoughts...
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New Duplexes Being Built in McGaheysville, VA |
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Welcome to Island Ford Estates in McGaheysville, VA! The same builder who brought you The Glen at Cross Keys is now building a very similar floor plan just a few minutes further East in McGaheysville... The site is being prepared for these duplexes -- and wow -- what amazing mountain views! Island Ford Estates duplexes offer an open floor plan on the main level which includes a kitchen, dining area, living room, master bedroom, office or sitting room and laundry room. Enjoy spectacular mountain views and a cul-de-sac location in these thoughtfully designed homes. These homes feature 9 foot ceilings in many areas, light-filled living areas, luxury vinyl plan flooring, upscale cabinetry, granite countertops and many options and upgrades. Visit IslandFordEstates.com to find floor plans, a site plan, standard features, a vicinity map and more! | |
Spend How Much You Want To Spend On A Home, Not Necessarily How Much You Can |
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Most folks who buy a home this year will not be paying cash. An important early stage of the home buying process is to talk to a lender to become pre-approved for a mortgage. As you meet with a lender, remember that there is often a difference between:
If you are looking for a qualified mortgage professional, shoot me an email (scott@hhtdy.com) and I can give you some recommendations. As you are navigating the home financing process, I am happy to help you understand the information you are receiving and the decisions you are being asked to make. There are a variety of loan programs that can likely work well for your situation, but we'll want to make sure you are aware of all of your options. Learn more about the home buying process at BuyingAHomeInHarrisonburg.com. | |
Is October 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 130 buyers per month make a buying decision. The remaining six months of the year (September through February) show anywhere between 52% and 86% as many buyers as the average of 130 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, the it's likely the highest month of buyer activity that we'll see until we get to next March. Even late October can work, as we're likely to see 62% 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. So -- looking to sell before next Spring? Now is the time! | |
Think Twice Before Rounding Up Your List Price |
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Sometimes it is tempting for a seller to want to round up their list price. The seller says (or thinks)... "We think the house is worth $240K? And you're saying we should list it for $245K or $249K? I'm optimistic -- I think someone is going to be willing to pay $250K, so let's list it for $260K! A buyer can always make an offer!" That's all well and fine and good -- and somewhat logical -- unless every buyer that comes to see the house in the first three weeks really thinks it is worth $240K. Then, when leaving the house priced at $260K, if they are willing to pay $240K, they are likely thinking they'd need to offer $220K in order to negotiate you down to the value of $240K. And they almost certainly won't make the offer. If a house priced at $260K has been on the market for a few days, most buyers aren't going to make an offer of $220K. They might think it is a waste of their time. They might not want to insult the seller. Regardless of the reason, you are not likely to have $220K offers on a $260K listing within the first few weeks. Thus, the buyer who excitedly came to see your $260K house, and then concluded that it is probably worth $240K (where we started this conversation) is likely to conclude that they should just wait a month or so and see if you eventually reduce the price to $250K -- and then they might consider an offer. But by the time you reduce the price to $250K, you are bound to get significantly less buyer/market attention with that price reduction since it is no longer a new listing. And some of the originally interested buyers will have found something else to buy. And there will be much less urgency for any buyer to make a decision about an offer. So -- beware of rounding up on your list price too far above what we have concluded is your home's value in the current market. It's easy to talk yourself into it -- and it's likely you'll regret it later. | |
Should You List Your Rental Property For Sale For One Month Between Tenants? |
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Depending on your short and long term financial goals - yes, it may be an excellent idea in the current market to do just that - list your rental property for sale for one month between tenants... In a recent conversation with the owner of a rental property, they were reflecting on the fact that after a tenant recently vacated their rental property (a townhouse) they were making quite a few updates and improvements to the townhouse based on some aging components and finishes in the property. They realized that the townhouse would be in better shape than it had been for years -- and that the condition would likely start to deteriorate (even if just a bit) as soon as they moved tenants back in. So, they wondered whether they should go ahead and just sell the townhouse instead of renting it again -- since it would be in great shape. But they lamented the fact that they'd need to keep it off the rental market for several months to see if it would sell at a price that would suit their financial goals - in other words, a sales price whereby it would make more sense for them to sell it than to continue to rent it. Here are a few thoughts I shared with this owner of an investment property...
So - here's an idea, if you own an investment property and you are about to have a tenant move out and you are about to make some improvements to the townhouse... Move the tenant out. Make the improvements. List the townhouse for sale for one month at a price for which you'd be happy to sell instead of continuing to rent the property -- so long as that value is generally in line with recent sales prices for similar townhouses. With this concept you don't have to commit to listing the property for six months, missing out on rental income, etc. -- but you can quickly determine if you could sell the townhouse while it is at its peak (from a condition perspective) at a price that would make it worthwhile for you to do so. OK - that was a lot. I'd be happy to talk it all through with you as well - in person, by email, by phone, etc. If you own a rental property and *might* want to sell it soon - be in touch (scott@hhtdy.com or 540-578-0102) and let's talk strategy... | |
No, Home Values Are Not Falling In Belmont Estates |
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This post could also be called "The Dangers of Micro Market Analysis" as you'll discover... The graph above shows that the median sales price of homes in Belmont Estates has been falling over the past few years -- from $311K down to $305K and now down to $289K. How could this be!? After all, aren't home values generally going up right now? Yes, in fact, home values are going up right now. Above you'll see that the median sales price of all homes in Harrisonburg and Rockingham County has risen from $224,600 in 2017 to $228,000 last year to $235,500 in 2019. So, if home values are going up in our overall market area, why is the median sales price going down in Belmont Estates? Do folks just not want to live there any longer? I would suggest that the decline in the median sales price in Belmont Estates is not a result of home values falling, but rather, a result of which specific homes happen to have sold in Belmont Estates over the past three years. We can see this when we look at the size of the homes that sold each year... As you can see, smaller homes have sold in Belmont Estates as we moved from 2017 to 2018 to 2019. So -- either homes in Belmont Estates are shrinking (ha ha - just kidding) or the median sales price appears to have declined over the past two years because smaller and smaller homes have happened to have sold each year. And thus, this is the danger of analyzing a micro market -- a small amount of data points might lead you to incorrect conclusions. | |
It Is OK If Your House Is Messy When I Visit For The First Time |
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All tired out from cleaning your house up prior to meeting with me about possibly selling your house? Don't be! There are plenty of times when I will want your house to be absolutely spotless, 100% organized, de-cluttered, picked up, minimalized (probably not a word), etc. For example...
But did you notice what is not on that list?
Some sellers feel pressure to have their house in absolutely tip top shape before we set up our first time to meet at your house to discuss your house, the market, the selling process, etc. You do not need to feel that pressure. I can look past the way that you (and most people) live everyday life - which is just not quite as 100% polished and put together as when your house is on the market. So -- if you want to get your house all the way to the point where it is ready for photos and showings before you have me over to start a conversation about your potential home sale, that is just fine -- but it is not my expectation that you do so. Talking early and often about selling (When should we list? What should we do before listing? What price expectations should we have?) can be very helpful for most home sellers. | |
Low Inventory Might Make Buyers Desperate But They Are Not Likely To Wildly Overpay |
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Inventory levels are low in many price ranges. You have heard it for a while now -- buyers have very few choices under $200K, under $250K and under $300K. For example, in the City of Harrisonburg, here are current options for single family (detached) homes...
But -- just because buyers have very few options, and are sometimes DESPERATE to find a house to buy -- that does not necessarily mean they will wildly overpay. So -- if you have a house that is reasonably valued at $220K -- we should not look at the lack of options between $200K and $250K and decide to list it for $249K. And if you have a house that is reasonably valued at $160K -- we should not look at the lack of options under $200K and decide to list it for $199K. Hopefully you get the point here -- just because buyers don't have very many options of houses to buy that does not mean that they will pay ANY PRICE for a house in an under supplied price range. Your home's asking price still needs to be grounded in the reality of what buyers have recently paid for similar houses. | |
When To Make An Offer On Your Dream Home If You Also Need To Sell Your House |
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In summary - not yet. If you need to sell your house in order to buy a new house -- and if your house is not already under contract -- then even if you find your DREAM HOME -- resist the temptation -- do not make an offer yet! If you make an offer on a house with a home sale contingency without your house already being under contract...
So -- if you view your dream home and you are ready to make an offer but have to sell in order to buy -- don't make the offer yet -- instead...
This may sound/seem difficulty or slow or risky or uncertain -- welcome to the world of trying to sell and buy at the same time! :-) But it can be done and I regularly help folks with this. All of the advice above is generalized -- if you are in a situation where you want to buy but you have to sell -- let's chat more specifically about your situation and develop a game plan. | |
Buying vs Building A Home Over $400K |
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Most buyers looking to spend over $400K (or certainly those looking over $500K) will also be considering building a new home. Typically, the tension between buying vs building is one of: 1. Goals 2. Money 3. Timing If you build, you can get the house you want, but you'll pay more for it and it will take a lot of time and attention. 1. Goals = Win 2. Money = Lose 3. Timing = Lose If you buy an existing home, you won't get exactly what you want, but you will pay less for the house and the process will not be a drain on your time. 1. Goals = Lose 2. Money = Win 3. Timing = Win Don't let my oversimplification of this issue fool you -- this is something that buyers can get stuck debating for months, or even years, often while looking at resale homes to try to convince themselves to buy instead building. If you are stuck in this quagmire, I'd be happy to meet with you to talk through some of the pros and cons and try to help you come to a decision you'll be pleased with in the short and long term. | |
Which Side of 81 Do You Live On? |
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If you have lived in Harrisonburg for a while (more than a few years) which side of I-81 do you live on? The East or the West? Would you consider moving to the other side of I-81? Regardless of which side you are on now, I'm guessing most of you wouldn't flip-flop to the other side. Most people stay on one side of I-81 after they buy on that side -- because they get used to the patterns of life on that side of our community. Nothing is necessarily better or worse on one side or the other -- but they are different, that's for sure. EAST: Most of the residential development over the past 15 to 20 years has been on the East side of Harrisonburg, in the general vicinity of the new hospital. This makes it an exciting place to live -- for some people. There are many newer developments where homes have recently been built, and there are newer commercial destinations (Stone Port, Martin's grocery store, Target, etc) all on the East side of town. But this also makes it a bit more hectic for getting around. Of note, there is also plenty of outbound traffic East of town, towards Massanutten, Elkton, Charlottesville, etc. WEST: There hasn't been as much residential development West of Harrisonburg over the past 15 to 20 years (other than Belmont and Monte Vista Estates) and this is just fine with most people who live on the Western side of Harrisonburg. Things are a bit calmer, without as much hustle and bustle, and in some cases with more established neighborhoods. The towns of Dayton and Bridgewater end up falling into this side of town as well for many people. I am not doing justice to all of the differences between the East side of town and the West side of town, but I believe that most people in this area are oriented towards one side of town or the other, for very specific reasons. Furthermore, most people who have spent any considerable amount of time living on one side of Harrisonburg likely wouldn't think about moving over to the other side of Harrisonburg. So -- if you're just moving to the area -- choose East or West carefully -- you might never switch to the other side! :-) | |
Are you selling a house listed for more than $400K? |
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Do you have your house listed for sale over $400K? If so, and the property is in Harrisonburg or Rockingham County you have 81 friends (or competitors??) who also have their homes listed for sale over $400K. And...only 8 buyers are likely to contract on a home each month over the next year based on buyer activity during the past year. So -- 8 of the 82 homes listed for sale over $400K are likely to go under contract in the next 30 days -- and 74 are not. How then, does a seller of a house over $400,000 make their house stand out? How do you best position yourself to be one of the four houses to sell this month?
Bear in mind, of course, that some factors are outside of your control....
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There Are Not Necessarily Always Buyers For All Homes Ready To Buy At All Times |
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If you are preparing your house well for the market - and pricing it appropriately, according to what other buyers have recently paid for similar houses - and the house is marketed fully and professionally...it should be under contract relatively quickly, and certainly within the first 30 days, right? Well... maybe... Sometimes, it just takes time. In the end, if the right buyer is not in the market right now, then it might not sell until the right buyer is ready to buy - and we shouldn't necessarily expect that the wrong buyer will buy your house just because it is prepared well, priced well and marketed well. Understanding how these dynamics will affect you and your listing is highly related to how many buyers are in your price range -- and in that pool of buyers in your price range, is your house likely to meet the needs of only a few, many or most of the buyers. So, if your home has been on the market for 30 days, or 60 or 90 or 120 or more days -- we should be thinking about...
If the answer is yes, yes and yes -- then we'll be left with two options...
Again - proper preparation, pricing and marketing alone won't sell your house - we also need the right buyer for your home to be in the market to buy at the time when your house is listed for sale! | |
Home Sales Stable, Median Prices Slowly Rising in Harrisonburg, Rockingham County |
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Summer might not officially end for another six days, but today has certainly has been a nice taste of the cool Autumn days to come. That said, even if the temperatures are starting to cool down, home sales are not yet ready to do so in our local market. Before we take a look at the most recent market trends, take a few minutes to check out this spacious Colonial in Barrington that is pictured above by visiting 2980BrookshireDrive.com. Now, then, let's get down to some overall market stats... First above, lots (and not much at all) to observe here...
And how about if we break it down between detached homes (almost all purchased by owner occupants) and attached homes (mostly purchased by owner occupants, but also purchased by investors)... Here's what we're finding...
And now for that pretty visualization of the month to month ebb and flow of home sales... Here (above) we note that every summer is different. Last year (blue line) June was a spectacular month for home sales - with 174 closings - more than seen anytime (ever!) in our local area. This year (the red line) June home sales were mediocre at best. But then, July and August home sales were stronger this summer as compared to last year. Looking ahead to September, I anticipate that we're likely to see around 110 home sales - slightly more than the past two years, but not quite as many as back in 2016. When we pile all of the months on top of each other we can get a clearer view of how the first eight months of this year (Jan-Aug) compares to the first eight months of the past four years. And this is where we find that we have had the best first eight months of anytime in at least the past five years. Given the current trajectory, it seems likely that we'll see at least 1,300 home sales this year. This graph shows us the overall long term trends in local home sales. The green line is the median sales price which has been creeping its way up over the past year. The orange line shows the annual rate of home sales, which has been hovering around 1,300 home sales for the past year. Focusing in just on the detached homes, we see that the median sales price has been increasing anywhere from 2% to 7% per year for each of the past four years. This year we are likely to see another increase in the median sales price somewhere in that range. With steady home sales and increasing sales prices, it's a great time to be a seller. But not as great of a time to be a buyer. As shown above, there have been a relatively stable number of home buyers over the past few years, but the number of homes for sale at any given point has been steadily declining for over three years. Why do I think we'll see 110 home sales in September? Well, partially because 120 home buyers signed contracts in August. This was a higher rate of contract activity than last August and suggests that sales will continue to be relatively strong as we continue into the Fall. And here (above) are those overall inventory numbers. The number of homes for sale has been declining over the past year. We used to see much more of an increase in available inventory during the Spring months but this past year buyers were contracting on new listings almost as fast as they were being listed, which kept the inventory levels low. Here's a startling statistic. Inventory levels have declined 13% over the past year when we look just at detached homes -- but when we look just at attached homes (duplexes, townhouses, condos) we find a shocking 50% decline in the number of homes for sale! It is a tough time to be a first time buyer these days! Finally, mortgage interest rates. If there is any consolation for today's home buyer it is that their mortgage interest rate is likely to be lower than anytime in the past year or longer. Interest rates have fallen 21% over the past year -- from 4.52% to 3.58%. A few final notes and thoughts for those that made it this far...
That's all for today. Have a delightful, pleasant, cool evening! | |
Do Detached Or Attached Homes Appreciate More Over Time? |
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Over the past five years, detached homes have increased more in price (on average, per year) than attached homes (townhouses, duplexes, condos). This wouldn't always be the case if we looked back over the past 20 years -- we could find time periods when this were not true -- but we have seen some larger than normal swings in home values during some of those past 20 years. My general sense (beyond the numbers) is in line with what the graph above shows -- which is that over time (5+ years) both detached and attached homes are likely to increase in value, but detached homes are likely to increase in value a bit more quickly than attached homes. | |
The 67 Places You Could Build A Home NOT In A Subdivision |
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Yesterday I was taking a look at the various locations, mostly in subdivisions, where you can buy a lot in Harrisonburg or Rockingham County with public water and sewer, including...
But you don't have to build in a subdivision -- or on a lot with public water and sewer -- and sometimes that's the goal -- to get a bit more land. So, here's a VERY wide look at properties currently for sale in Harrisonburg and Rockingham County *without* public water and sewer that are *not* in subdivisions, priced under $200K... View these 67 (as of today) properties by clicking here. Plenty of folks looking to build homes start to think about it at this time of year -- hoping to acquire a property to start building in the Spring. So, as you start considering a new build -- think about how much land/space/privacy you'd like, whether you'd like to be in a subdivision, whether you'd prefer to have public water and sewer, etc. | |
Where Might You Build Your New Home? |
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Where might you build your new home? There are 180 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! | |
When To Actually Apply For A Mortgage When Buying A Home |
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As Late As Possible
Incredibly Proactive
A Reasonable Middle Ground
I try to encourage all of my clients to at least be in the "reasonable middle ground" sequence as outlined above. This gives them a firm idea of what they can afford and how a home price will compare to a loan payment. This also allows them to make a stronger offer, already having a pre-qualification letter in hand. I strongly discourage my clients from following the "as late as possible" sequence as outlined above. This doesn't help them make the best decisions about which houses to pursue, how far to negotiate, etc. This also doesn't allow us to make as strong of an offer on a house. Occasionally, one of my clients will fall into the "incredible proactive" sequence as outlined above, and wow, this makes the financing process a joy to work through! These buyers have already done so much of their work with the lender before even thinking about which house to buy -- which then allows them to focus on buying, negotiating, inspecting, etc., rather than be bogged down in the process of securing their mortgage. Let me know if you have questions about how I have described these sequences -- and let me know if you would like a few recommendations for lenders in the Harrisonburg area. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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