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Basements in Harrisonburg, Rockingham County Should Be Tested For Radon |
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As you can see above, Rockingham County is in Zone 1 -- which means we are in an area that is likely to have high radon levels. What is radon, and what does it mean for you? Read on, from the EPA.... Radon is a radioactive gas that comes from the natural breakdown of uranium in soil, rock and water and gets into the air you breathe. Radon typically moves up through the ground to the air above and into your home through cracks and other holes in the foundation. Radon can also enter your home through well water. Your home can trap radon inside.Learn more about radon and real estate here. | |
Selling Your Home Will Likely Require Clearing These Three Hurdles |
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While every home sale is different -- with unique contingencies based on the needs and situations of the buyer and seller -- there are three main hurdles that most buyers and the houses they are purchasing must clear to make it to closing. So -- where is your contract in this process? Have you cleared 1, 2 or 3 of the hurdles, thus far? There will be plenty of other details to attend to, but these are the three main areas of focus. Evaluating the property condition, the property value, and the buyer's finances.... INSPECTION - This is an evaluation, by a home inspector, of the condition of the house. Clearing this hurdle typically involves requesting that the seller make some repairs to the house (or negotiate further on price) based on new information about the property condition discovered during the inspection process. APPRAISAL - This is an evaluation, by an appraiser hired by the purchaser's lender, of the value of the house. If the property appraises for the contract price (or higher), all is well -- otherwise, the buyer and seller may need to renegotiate the contract price based on the appraised value. LOAN APPROVAL - This is an evaluation, by a lender (and their underwriters) of the purchaser's financial situation. The lender must confirm that the buyer has the income to support the mortgage payment required for purchasing the home. Again - there are many other smaller hurdles (for example, a termite inspection) and larger hurdles (for example, a home sale contingency) that may need to be cleared in your purchase (or sale) of a home -- but these three main hurdles (inspection, appraisal, loan approval) are the three main mileposts during the contract-to-closing process that we'll be focused during the transaction. BUT WAIT -- THERE'S MORE.... Would you rater have three main hurdles to clear, or six? Let's imagine that you receive two offers on your house, which is listed for $250K....
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Understanding Home Inspection Negotiations |
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A buyer agrees to pay a price for a house based on what they know about the house at that time. The home inspection process allows them to learn more about the house to confirm that it is the house that they thought. But sometimes, they discover problems with the house that they'd like the seller to address.... So, how do these home inspection negotiations usually proceed? The short (and vague) answer is -- well, it depends on the terms of your contract. But, overall, here is how the inspection process typically flows.... As you can see above, after a buyer requests repairs (based on the home inspection) the seller can choose to make some, all or none of the requested repairs. The transaction (and negotiations) can then go in a few different directions based on that response. Learn more about the home buying process at.... | |
Would You Move To The Other Side (!?!?!) of Interstate 81? |
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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! | |
How to Buy a Foreclosure in Harrisonburg, Rockingham County |
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With some regularity, I am asked by potential purchasers how they would go about buying a foreclosure. First, here is a list of upcoming foreclosure sales, but more importantly, below is a description of a few ways to buy what you might be thinking of as a foreclosure. SHORT SALES: Some homeowners must sell their home, but market conditions won't allow them to sell it at a high enough price to be able to pay off their mortgage(s). In this example, a homeowner might have a $250,000 mortgage balance but can only sell the property for $230,000. As a prospective buyer, it is sometimes possible to purchase this type of a property through a process called a "short sale." In such an arrangement, the homeowner petitions their lender to accept less than the full payoff of the mortgage and in return to still release the deed of trust so that ownership of the property can be transferred over to you, the new owner. This can benefit the lender, as they skip the time delays and cost of the foreclosure process. This can also benefit the homeowner, as a short sale will have a slightly lesser negative impact on their credit as compared to a foreclosure. As a buyer, however, you must know that there are challenges to buying a property as a short sale. The biggest challenges of late seem to be the uncertainty of the purchase and the time table. Even if you and the homeowner agree to a price of $230,000, the homeowner's lender must still agree to accept that price – since it won't allow the homeowner to pay off their $250,000 mortgage balance in full. This process of waiting to hear back from a lender, and then complying with all of their various terms can sometimes take 60 to 120 days – or longer! TRUSTEE SALES: If a short sale does not take place, and a homeowner is behind on their payments (or not making them at all), eventually the property will be sold by the lender on the courthouse steps. Buying a property at a "trustee sale" can be exciting, and can be a great opportunity – but there are challenges as well. If a property to be sold at a trustee sale is also listed for sale with a Realtor, you can usually view the property ahead of time by calling your Realtor. Otherwise, you will likely not have the opportunity to see inside the property before the trustee sale, and thus you will not know too many details about the condition of the property. Furthermore, your purchase of the property at the trustee sale cannot be contingent upon viewing the property, or inspecting the property. In this instance, you are purchasing the property in "as is" condition, regardless of what you then find out about the property. It is also important to note that many times the lender will have an opening bid at the trustee sale that is close to (or sometimes higher than) the amount that they are still owed on the mortgage. Thus, in the example above, they might make an opening bid of $250,000. As a result of this opening bid process, many (or most) properties available for purchase at a trustee sale are not great opportunities. Occasionally, a property will be foreclosed upon that has had a mortgage in place for many years, whereby the balance of the mortgage is much lower than current market value – these are great opportunities for a buyer. Visit HarrisonburgForeclosures.com for a list of upcoming trustee sales. BANK OWNED PROPERTIES: If you don't buy the property before the auction (as a short sale), and don't buy it at the trustee sale, you'll have a third opportunity to buy it once the bank owns it. These properties are called "bank owned properties" or REO properties ("real estate owned"). Oftentimes, the prices on these properties are quite realistic, if not under market value. It would not be atypical for a house such as the one mentioned above to come on the market after the trustee sale at a price of $210,000. In such an instance, you should expect to be buying the property in "as is" condition, and you will also be buying with a slightly different contract document. Most lenders have a long standard contract or contract addendum that spell out a variety of additional contract terms designed to protect them from any future liability – and rarely will a lender agree to have these contract documents changed in any way. As you can see above, oftentimes buying the property as an REO property is where the best opportunity lies. Visit HarrisonburgREO.com for a list of bank owned properties currently on the market for sale. When a home goes into foreclosure it is often for very sad and unfortunate reasons – such as the loss of a job – and I do not wish such circumstances on any homeowner. However, if you are a buyer in today's market it is important to be familiar with different methods for buying a property when it will be, is being, or has been foreclosed upon. | |
Will Single Family Home Sales Ever Return to 2016 Peak? |
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Apparently, 2016 was a special year for single family home sales in Harrisonburg and Rockingham County. After three years straight (2013, 2014, 2015) of seeing a very consistent number of single family homes in the City and County (813-819) there was a 20% increase in 2016 to 978 home sales! Then, in 2017 -- sales of single family homes fell 10% to 884 sales. Hmmm..... This was likely at least partially an inventory issue....
And inventory levels got even worse during 2017....
All that is to say that I would be shocked if we saw more than 978 home sales in 2018. I think we may have peaked in 2016 -- and we might not return to that peak for some time. Perhaps some home builders need to start creating new single family home supply in this area?? | |
When Will Home Buying Activity Start in Earnest? |
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It is no surprise that buying activity (signing contracts, not closings) slows down over the Winter. As shown above -- an average of 72 buyers sign contracts in January, which then jumps up to 90 in February, and then an even larger jump in March to an average of 130/month. So, we're going to say the March is when we first seem a big jump in buyer activity. For that reason, many sellers wait until March (or even April) to put their homes on the market -- though the Spring market brings more competition from other sellers in addition to meaning that we'll start to see more buyers. Of note -- staying relatively true to form, there have been 75 contracts signed thus far in January 2018. Who knows, maybe we'll come out slightly ahead? | |
City vs County Home Sales Trends |
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Now, for the annual showdown between the City of Harrisonburg and Rockingham County, though first noting that:
There are any number of factors that affect whether buyers end up buying in the City or County, including what type of property they are seeking, how much land they desires, school systems, employer locations, and much more. | |
30 Year Mortgage Interest Rates Starting To Rise |
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While we ended the year just below 4%, the average 30-year fixed mortgage interest rate has now risen to 4.15%. This is a good bit above the 12-month average of 3.98%, though still historically low in any longer term context. It seems possible that we'll see some further increases in coming months, though I don't think rates will get up to 4.5% in 2018. And....it's possible they will drop back down closer to 4% within the next few weeks or months. | |
Which price range of homes have been hit the hardest with reduced inventory levels? |
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Clearly, the under $200K market is extremely tight right now -- with a sharp (65%) decline over the past two years. Some of this is the lack of availability of this housing because more people want to buy these homes than sellers want to sell them -- and some is a result of increases in property values over the past two years, resulting in some "just under $200K" homes becoming "just over $200K" homes and falling into the next price bracket. As shown above, there has also been a significant (45%, 43%) drop in housing inventory levels between $200K-$300K and $300K-$400K. The only stable price range has been the "over $400K" price range where there are just about the same number of homes for sale now (58) as there were two years ago (55). I expect that inventory levels under $200K will drop even lower over the next 12 months You can find out more about the Harrisonburg and Rockingham County real estate market by visiting.... | |
January Inventory vs. Past Year of Home Sales |
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In 2014, 2015 and 2016 we started off the year with enough homes actively listed for sale to last us for right around six months -- or a bit longer. This balance (a six month supply of housing inventory) is considered by many analysts to be an indicator of a balanced housing market. Last year (2017) was quite different. Inventory dropped 26% from 2016 to 2017 and sales rose 17%. As you would, thus, expect - we started off last year (Jan 2017) in a slightly different spot, as shown above. Which is, arguably, why we ended up seeing slightly FEWER home sales last year -- sales declined 4% in 2017 from 1309 to 1254. So, now, starting of 2018 -- are things any better? No. There are even FEWER homes for sale now than there were a year ago. Inventory levels dropped another 32% between January 2017 and January 2018 -- and the current inventory of active listings (280 homes) will / would only last us 2.7 months -- as compared to that balance point of six months. So, what then will this lead to in 2018? I am predicting slightly fewer sales than last year -- and likely faster sales -- and at slightly higher prices. Stay tuned! | |
Conjecture vs Analysis in Home Pricing |
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Sometimes, determining the market value of a home is quite straightforward, such as in this recent example....
When you then are considering the value of a 3 BR, 2 BA, 1800 SF, circa 2000 home -- it would seem reasonable to think that you'd likely pay between $245K and $255K. Multiple comparable sales point very specifically to that value based on a high degree of similarity between the comparable sales and the subject property. Sometimes, however, it's not as straightforward. Conjecture - an opinion or conclusion formed on the basis of incomplete information. Sometimes, we're going to identify a few sales of homes that are not so similar to your home, but which we understand a buyer would see as inferior to your home. And then we might point to a few other sales of homes that are, again, no so similar to your home, but which we understand a buyer would see as being superior to your home. At the end of the day, pricing a home is a conversation, based on data, to come to our best, clearest and most complete understanding (guess) as to what a buyer is going to be willing to pay for your home. Sometimes this conversation is a reassuringly precise exercise -- sometimes, not so much. | |
How does a Kickout Clause work in real estate? |
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Buying and selling at the same time can be tricky -- and a common question is whether you should go ahead and make an offer on a house if you do not yet have your house under contract. If you do so, you'll likely then be dealing with a kickout clause. What is a Kickout Clause? If a buyer who needs to sell their home in order to a buy a new home finds a home that they want to purchase – they can make an offer that is contingent upon the sale of their current home. If a seller is willing to entertain such an offer they will typically counter back with a "kickout clause" which allows them to continue to market the property to other buyers who do not have to sell a home in order to buy. If a second buyer comes along and makes an offer, that is not contingent upon the sale of a house, the seller then provides notice to the primary buyer that they are being "kicked out" – and that primary buyer has a set period of time (typically 48 or 72 hours) to either get their house under contract (to satisfy the home sale contingency) or remove the home sale contingency by showing proof that they can proceed with the purchase without selling their current home. If the primary buyer cannot do this, and the timeframe passes, then the first contract will be null and void and the seller can then proceed with the second buyer. OK -- and no -- a kickout clause does not have anything to do with soccer. :) | |
The Two Phases of Looking For a Home |
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Looking and waiting. Exciting and frustrating. Fun and boring. Whatever we call them, there are usually two phases of looking for a home to purchase once you have (decisively or tentatively) made a decision that you are going to buy a new home. First -- we'll take a look at all of the homes currently on the market that might fit your ends. Second -- we'll wait for new listings to hit the market that might fit your needs. These days -- with very low inventory levels in many price ranges and market segments -- the first part of the process (looking at current listings) is often a brief exercise. Most of the homes of interest that have been listed in the past 90 days may very well have already been snatched up with another buyer. As such, don't be surprised if it doesn't take long to go see the houses currently on the market that are a good potential match for you. We're then stuck in that second phase -- waiting. How exciting. There will (likely) be new listings hitting the market in coming weeks or months that will be a potential match for what you're seeking in a new home, but we'll have to wait around for a homeowner to be ready to list their home for sale. When a local housing market experiences low levels of housing inventory, more of our "looking for a home" time is typically spent waiting rather than looking. What an exciting opportunity to practice patience! ;-) | |
Last Call for City Homes Under $200K |
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There are fewer and fewer homes for sale under $200K in Harrisonburg and Rockingham County. Here's what the inventory numbers have looked like over the past few years....
That has now fallen a bit further, to 93 homes for sale under $200K in the City and County -- but even more interesting is where those homes are located....
And it probably woulnd't surprise you that only 5 of the 21 City homes under $200K are actually single family detached homes -- the other 16 are townhouses, duplexes or condos. Prices are rising -- which makes homes under $200K harder and harder to come by, especially in the City. | |
In 2017, Median Sales Price Finally Surpasses 2007 Peak |
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It should be noted, perhaps with some fanfare, that in 2017, the median sales price in Harrisonburg and Rockingham County finally surpassed the prior peak seen in 2007. Yes, that 2007, the one after a rapid run up of sales prices as a result of a largely nationwide real estate BOOM, followed thereafter by a decline in sales prices, at different speeds in different areas. But now, in 2017 -- ten years later (!!!!) -- we finally hit a median sales price of $198,500 -- slightly edging out that previous high of $195,100 seen in 2007. Thank goodness. Now, folks who bought in 2006, 2007 or 2008 might finally not be underwater based on their original purchase price. It's been a long time coming.... | |
Determining An Offering Price on a Property in a Neighborhood |
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How does one determine an offering price in a neighborhood? Start 5% below asking price? Start at the tax assessed value? Start at the price the seller paid, adjusted per market changes since that time? Start $1K lower than the list price for every day it's been on the market? Start at full price if it's a new listing and you think it will sell quickly? Many or all of these strategies are likely to lead you astray. In theory -- you should be willing to pay approximately the same price as other buyers have paid for approximately similar homes in the recent past. For example....
When you then are considering a new listing of a 3 BR, 2 BA, 1800 SF, circa 2000 home -- it would seem reasonable to think that you'd likely pay between $245K and $255K. Of course, there are a variety of other extenuating factors that can affect this pricing:
So -- how does one best research what homes are selling, and at what prices? I'll remind you of -- HarrisonburgNeighborhoods.com. On this handy new website, among other things, you can find a three year history of the sales prices in each of 34 neighborhoods in and around Harrisonburg. I hope that HarrisonburgNeighborhoods.com continues to serve as a helpful resource to you as you research home values, monitor for new listings, and more. Don't forget -- you can sign up to receive email alerts of all new listings and recent sales in any of the 34 neighborhoods! | |
Updated City GIS Mapping System |
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The City of Harrisonburg just launched an updated GIS system, and it's worth checking out the next time you are trying to explore a property in the City of Harrisonburg. One of my favorite parts of the new GIS system is that it is mobile-friendly and you can explore property data much more easily from your phone or tablet. Here is the GIS system: http://www.HarrisonburgVA.gov/GIS Here is the update from the City.... The City of Harrisonburg's Geographic Information System (GIS) recently improved its mapping system and GIS viewer online to allow for more capabilities. The City's GIS technology combines layers of information to give the public a better understanding of a specific area. Different layers of information can be combined to tell a story about that piece of property. Some layers include streets, public facilities, parks, property lines, and city limits. Information about specific parcels of property is also available through the GIS system. The improvements to the City's GIS system have enabled it to be more user friendly and responsive, which allows it to work on a desktop computer or smartphone. When the data and maps are updated, it will be reflected online almost immediately. "The GIS system is a resource that holds a wealth of information, which is free and accessible to the public," explained Nate Rexrode, GIS Administrator. "We encourage members of the public to take a look at the site and utilize the information that is available to them." Property owners are encouraged to visit the GIS site for zoning information, acreage, voting and school districts, and data specifically involving their property. This site is also beneficial for realtors, surveyors, engineers, planners, and those who often research property-related information. | |
Local Home Values Rise in 2017 |
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Find out more about this stellar home just outside Bridgewater at 1215MtCrawfordAvenue.com. I just published my most recent monthly market report, and as usual, you can read on for an overview, download the full report as a PDF, read the entire report with commentary online, or tune in to my monthly video overview of our local housing market... OK - now, let's dive into the market data behind this month's report.... As shown above....
Two observations here (above)....
Perhaps the truest analysis of the trends in housing values -- single family homes on their own. The waters can be muddied, a bit, on townhouses, duplexes and condos -- with investors buying the properties as rentals. Most single family homes are bought as residences, and thus there are fewer external factors that affect these home sales. As noted above, there were 10% fewer single family home sales in 2017 -- but the median price rose for the third year in a row, to $224,950. This is a good indicator that home values are rising in our area. And finally, the disturbing statistic I was hesitant to even go look for this month.... Indeed -- after free falling for most of 2017, the number of homes for sale in Harrisonburg and Rockingham County has now plunged below 300 -- to only 280 homes for sale as of this morning!?! Two crazy further notes -- there are only 46 townhouses/duplexes/condos listed for sale in the entire City/County -- and there are only 64 homes for sale in the City of Harrisonburg!?! OK -- I'll stop there for now. There is plenty more in my full market report, so feel free to download it as a PDF, read the entire report online, or watch/listen to a video overview of this month's report. And, my reminders for buyers and sellers last month still apply.... SELLERS -- even though it is a seller's market in many price ranges right now, you must still focus on price, condition and marketing. For further reading on buying or selling in this area, check out.... | |
Septic Tanks Can Crack |
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If you are buying a home in the County, I strongly suggest that you have the septic system (tank, distribution box, etc.) inspected by a qualified company. Just because everything is neatly tucked away underground, and seems to be working fine, that does not mean that, in fact, all is well. Septic tanks can crack. Connections to/from the distribution box can crack. Distribution lines can be crushed or crack. Regardless of whether the buyer or the seller is paying for it, as a buyer, it is worth having the septic system thoroughly evaluated when purchasing a home on a septic system. | |
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Scott Rogers
Funkhouser Real
Estate Group
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scott@funkhousergroup.com
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