New Construction
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Cause & Effect :: Development Patterns & Traffic Problems |
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 Another key thought from last week's Smart Growth Symposium put on the Shenandoah Valley Builders Association is that . . .Distributed neighborhoods, that are not integrated into the community, lead to more driving, and thus, more traffic. Many new residential developments in this area (think of Route 33 East) are:
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Harrisonburg Water & Sewer Connection Fees Increase |
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 Most homeowners, or those who hope to be homeowners in the future may not have paid too much attention to the news earlier this month that Harrisonburg water and sewer connection fees will be increasing. But maybe we all should have taken note . . .The Change Example #1: three-quarter-inch water meter --- in this example, the sum of the water and sewer connection fees will soon be $7,000, instead of the existing $2,000. This size would be typical for a single family residence. Example #2: a six-inch water meter --- in this example, the sum of the water and sewer connection fees will soon be $300,000, instead of the existing $17,500. This size would be typical for a large commercial project. Peruse the current fee schedule here, and the new schedule here (effective July 1, 2008). The Effect As Todd Rhea, of Clark & Bradshaw, commented at last week's Smart Growth Symposium, when builders or developers are faced with new fees, we're fooling ourselves if we think they absorb those costs. They ultimately get passed on to the buyer. With this logic, one could argue that city housing costs will increase universally by $5,000 come July. Action Item Builders and developers should note that the fees are charged at the time of obtaining the building permit --- so as long as a lot has a building permit prior to July 1, 2008, you can take advantage of the lower fee schedule. For a developer of a major residential or commercial project, this could equate to hundreds of thousands of dollars of savings. | |
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Will Rockingham County Be Paved Over? |
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I have heard some people talk about development as if in the next few years, or decades, all of Rockingham County will be developed --- with the farm land destroyed, and our history no longer preserved. Below I'll try to put that thought in the context of actual land use, but for the record --- I don't think many at today's Smart Growth Symposium thought that the above statement is true. (Lest anyone conclude that I am referring to any of the attendees).  The data above is extracted from the Rockingham County Comprehensive Plan, particularly page 18 of the section on Strategies, Policies and Actions. Here's the full list of how Rockingham County land is being used:
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In Theory, Construction Is Booming! |
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 Are builders gearing up? (Daily News Record) Yes, and no! Read on... Building Permits Issued Per Year:
So....the number of building permits has definitely increased, BUT a large portion of the City of Harrisonburg building permits are for multi-family student housing projects. Though not having conducted a wide survey, I would guess:
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Smart(er) Growth For Harrisonburg and Rockingham County? |
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Wow! Today's Smart Growth Symposium, orchestrated by the Shenandoah Valley Builders Association was a fantastic primer on growth issues and how to plan for them in the central Shenandoah Valley. Stewart Schwartz, the Executive Director of the Coalition for Smarter Growth, provided a great overview of smart growth principles and policies that provided a helpful framework for thinking about and planning for the future of our area. One key point that he made, that stuck with me, was a need to focus on developing in the right place. Those present included conservationists, builders, farmers, real estate agents, bankers, local planning staff, elected officials, engaged citizens, and more. There seemed to be a great desire for and capacity to consider working together for the best future for our valley, despite the varying perspectives each of us bring to the table. | |
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Preston Lake -- Diving Into The Details |
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 I have had several clients inquire about Preston Lake, a mixed-use development underway just east of Harrisonburg. I have sent a variety of information and links to online resources to these clients, but thought I'd group all of that information together in one place. General Information News Articles / Opinion Pieces
A few more notes and disclaimers:
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Modular vs. Stick-Built . . . A Blind Test |
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 A few weeks ago some of my clients were interested in viewing both a stick-built home and a modular home, and agreed to look at both in a blind comparison test. First, according to Wikipedia, a stick-built structure is "one constructed entirely or largely on-site," as opposed to a modular home that is "divided into multiple modules or sections which are manufactured in aremote facility and then delivered to their intended site of use." Before we get to the results of the blind test, it is important to note that there are mixed opinions on modular homes. For example, some would suggest that . . .
The stick-built home had higher quality interior finishes, a more practical layout, higher quality flooring, and seemed somewhat more solid --- but --- had more of an echo, and had several lower quality finishing selections that didn't convey quality construction. The modular home had higher quality framing and higher ceilings, and the marriage wall was not noticeable --- but --- there were more oddities in the floor plan and the floor joists seemed more shoddy. Both homes had great drywall work and seemed to be very structurally sound. | |
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Buying Acreage To Build A Home |
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Recently, one of my blog readers asked a variety of questions about buying land for building a home. Let's delve into a few of the related questions and issues!  What is the average price per acre in Rockingham County? The cost per acre of land varies across Rockingham County, mostly depending upon the size of the tract, and the property location. For example, in 2007 land in Rockingham County north of Route 33, with tract sizes of 1-10 acres sold at an average rate of $33k/acre. These 22 sales, however, ranged in price per acre from $5k to $220k. When a buyer starts considering a particular property, we would then start looking at average price/acre for tracts most similar to that property. Does land appreciate? Almost always, yes --- because we have a fixed supply of land, as opposed to housing which can continue to be built. However --- it often doesn't appreciate as quickly as land with a house built on it, since land sales do not comprise as active of a market as home sales. When evaluating a particular property, what should I consider? It is imperative to investigate many aspects of a piece of land before purchasing. Some, but not all, of these include:
Do you have to build immediately in a subdivision? Each subdivision is a bit different in their expectations, but those expectations are almost always spelled out in the same document -- the covenants and restrictions. Rarely does a subdivision require that building start within any given time frame, however, many subdivisions will require that construction be completed within a certain amount of time after it has begun. Buying land can be somewhat complicated, but is an exciting process. There's nothing like being a Virginia land owner! | |
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Condos Are Coming To Downtown Harrisonburg! |
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Urban Exchange, an exciting new mixed-use development, will be built with frontage on East Market Street and Mason Street --- within walking distance to downtown Harrisonburg and JMU campus.  The six-story structure will be comprised of (196) 1, 2 and 3 bedroom condos / apartments, as well as approximately 12,000 s.f. of retail space -- to house tenants such as a coffee shop, restaurant, and other retail operations. These brand new, upscale units will be available both for sale or for lease. Amenities will include on-site parking, free internet and phone service, a state-of the-art fitness center, public space and an outdoor courtyard. Demolition on the existing structures will begin this month, and the entire project will be complete by Summer 2009. For more information about Urban Exchange, visit http://www.ueharrisonburg.com. | |
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Eastern Rockingham County Lot Sales - The Ups and Downs |
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 Over the past several years, prices of lots in eastern Rockingham County, particularly in the Peak View school district have increased dramatically. However, in 2007, the average sales price dropped below the 2006 average sales price. 2003: $47,546 (81 sales) 2004: $55,354 (112 sales) 2005: $89,112 (98 sales) 2006: $118,075 (51 sales) 2007: $110,875 (35 sales) As you can above, during this same time, demand for lots decreased rather significantly. This was compounded by the fact that the inventory of available lots increased during the same time --- there are currently 109 lots available in the Peak View school district, as follows:
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Will We Have Too Much JMU Student Housing? |
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Last week the Daily News Record reported that 3,700 residential units are under construction, which seemed to be quite a bit of housing for JMU students. Below is a bit more information that sheds some light on the matter (facts and figures provided by Harrisonburg Community Development, summary and commentary by me) . . . The "3,700 units" referenced in the Daily News Record includes projects in various stages ranging from recent rezonings to projects for which building permits have been issued. Some of the housing projects included in the "3,700 units" of housing shouldn't be aligned with college student enrollment growth: 1. Some projects were included that are just about complete and occupied (parts of Liberty Square, Beacon Hill, Millwood Condos, Sunset Heights-Holmes Addt., Westfield, and Willow Ridge). 2. Some projects are not aimed at student occupancy (Christophel Properties, Founders Way Condos, Hidden Creek Apts., Hillmont Apts., Lady Slipper Ct., Beacon Hill, Liberty Square, Miller's Homestead, Millwood Condos, Park Rose Place, The Quarry, Townes of Bluestone, Townes at Wellington Park, Wishing Well Estates II). The largest remaining projects, aimed at students would be: Campus View Condos (84) 2-3 BR units (84) 4 BR units Copper Beach (78) 1BR units (78) 2BR units (118) 3BR units (158) 4BR units Latitude 38 (96) 3 BR units (132) 4 BR units Purple and Gold TH (132) 4 BR units Sunchase (24) 4 BR units Hunters Ridge (16)-(24) 4 BR units Totaling these yields about 3,300 beds aimed at students, which turns the debate back to how many more JMU students will be enrolled in coming years. I would estimate 2,800 based on JMU and SCHEV figures --- the Daily News Record continues to estimate 4,100. No wonder developers keep coming on the scene to build more student housing! In the end, we'll just have to wait and see which projects are actually built out. Some developers may decide to hold off on their projects as they learn more about the market, or as their bankers learn more about increasing vacancy rates. | |
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"New-Home Sales Plunge To 12-Year Low" |
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 Such is the headline of a front page article in the December 29, 2007 issue of the Daily News Record, with excerpts such as . . ."The housing market plunged deeper into despair last month, with sales of new homes plummeting to their lowest level in more than 12 years." "It is the one sector of the economy that doesn't show any signs of life." "It doesn't look like there is any resuscitation in store for housing over the next year..." "Sales and home prices are in a free fall." "The downturn is intensifying." Some important things to remember when reading the article:
More reading on the Harrisonburg real estate market: | |
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Counting JMU Students |
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In most situations, it's o.k. if we aren't working with an exact number for JMU enrollment. However, many developers are currently spending a lot of money to build thousands of housing units in Harrisonburg --- many of which are intended to be occupied by JMU students. When you dig into the numbers, it starts looking like we will have a significant over-supply of college housing in the coming years . . . How Many Bedrooms?? Per today's Daily News Record, "more than 3,700 residential-housing units are under construction or in various stages of approval" --- of which 2,985 are apartments or townhouses. However, many of these are not 1-bedroom housing units, but 2, 3, or 4 bedroom. We'll assume for a moment that they average out at 2 bedrooms per unit. This provides us with 5,970 "beds" to fill --- and the article later states that by 2013, the city will need 2,500 additional beds for JMU students. Hmmmm.......so far that's 3,470 extra beds --- and I hope they aren't finished too quickly! What Is Headcount? The second problem (for developers spending lots of money on building these housing units) is that the figures being used for JMU enrollment can be a bit deceiving. The above-referenced article references 2013 enrollment as 21,500. The only enrollment projection I can find on SCHEV's web site close to 21,500 is the "Total Fall Headcount". This is defined by SCHEV as "A student enrolled for more than zero credit hours in courses offered for degree or certificate credit, or a student who meets the criteria for classification as a remedial student." My understanding is that this would include faculty or staff taking one (or more) class(es), students studying abroad, local residents taking one (or more) class(es), etc. All of these categories of "fall headcounts" wouldn't at all contribute to a demand for student housing. The Total Fall Headcount shows 21,542 students in 2013. For the best "living in Harrisonburg, needing student housing" enrollment figures, I am almost always pointed to the "Regular Session Full-Time Equivalent" data, which is defined by SCHEV as "A calculation of enrollment based on total credit hours taken byundergraduates and first professionals divided by 30 and added to totalgraduate credit hours divided by 24. Includes fall and spring semestersonly, does not include summer term enrollments. May be broken out by onand off-campus activity." This is a calculation to get a lot closer to the number of full time students will be attending JMU --- and these numbers show 19,333 students in 2013. Does it matter, or are we just splitting hairs? If you explore SCHEV's Enrollment Projections, you'll see that there are a lot of figures that can be used for estimating future JMU enrollment figures. My concern is that the figure that developers are using for their decisions is the highest number available -- and one that counts people who would not be seeking student housing. I can understand that the City and the Daily News Record use that highest figure in many situations, but when student housing developers use it for planning purposes, it may be a cause for concern. | |
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Driven Down Old Furnace Road Lately? |
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 Construction is booming on Old Furnace Road --- making way for "Latitude 38", a 228-unit, 800+ bedroom complex of student housing for JMU students. Some public details of the development were highlighted in the Daily News Record in August. The project is being developed by Franklin Holdings out of Charlotte, NC. Apparently they developers didn't read this, as they reference an increase of 4,000 students "over the next few years", whereas SCHEV's FTE Regular Session numbers would suggest that even all the way through 2013/2014 we'll only see a growth of 2,787 students. One thing is for sure --- students at James Madison University will certainly have a lot of housing choices in the coming years! | |
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Garage Prevalence |
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On the air yesterday, we had some questions about garages --- are most houses being built with them these days, are most buyers looking for them, etc. Here are some numbers to answer those questions . . . Garages have become a more frequent occurrence over time. Looking at sales during the past 12 months in Harrisonburg and Rockingham County, here's what we get:
Of late, the larger the home being built, the more likely it will have a garage. Looking at sales during the past 36 months, of homes built since 2000, in all of Harrisonburg and Rockingham County, here's what we get:
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Solar Panels, Wind Turbines and Low Flow Toilets, Oh My! |
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What a great story --- "On 5 acres along Interstate 81 about a mile north of Harrisonburg, Zach Fettig, a 24-year-old graduate of James Madison University's College of Integrated Science and Technology, is financing and building a self-sufficient, environmentally friendly house." (Source: Daily News Record) Zach is a recent graduate, and will house several other students in the house he is building --- providing a hands-on experience for learning about and performing research on sustainable living technologies in everyday life.  Per the Daily News Record, these technologies will include:
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A Great Time For Home Improvements! |
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As reported today in the Daily News Record, the number of building permits has dropped by roughly 16% in Rockingham County. As Jenny Jones points out, this reflects what has been going on for the past year nationally --- both with building permits and the number of homes sold. David Milstead, of Milstead Construction, also makes a great point that there are still plenty of buyers for mid-priced homes, but upper-end home buyers seem to have disappeared lately. One additional reason for this, is that many of our market's high end buyers were relocating or retiring from larger markets, selling high-priced homes in those markets, and buying high-priced homes in our market. With several of those markets slowing down, the rate of high end buyers entering our market from outside has certainly slowed in the last 12-18 months. With every economic turn (for better or for worse), there exists an opportunity. The current opportunity is for hiring a contractor to do a home improvement project. Over the past few years, this was a tough task --- with the huge demand for new construction housing, it was difficult to find someone to build an addition, or a deck, or to remodel a kitchen, etc. All that has changed --- look in the classifieds section of the Daily News Record and you'll see many contractors and builders seeking customers both to build homes or do home improvement projects. There are lots of options, and I imagine you would be able to obtain multiple, competitive bids. | |
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Buyer Incentives Galore! |
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 Centex Homes is running an outstanding "Year-End Savings Event" in a variety of the areas where they are currently building new homes. Communities in Virginia include Northern Virginia, Richmond, Williamsburg and Hampton Roads.Unbelievably, they are offering the following incentives:
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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