If you don't have a job, it's hard to buy a house.  If you lose your job, it's often hard to keep your house.  Thus, it is welcome news for the housing market to see the unemployment rates continuing to drop on the local, state and national levels.  Yet another indicator that we should see a further improved local housing market in 2012.
 

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In preparing to list a home for sale, I met with my clients and we examined the competition that their home would have given its characteristics (size, location, age, price).  We were surprised that there were not too many comparable homes (at all) on the market right now.  If someone wants to buy this home, they won't be comparing it side by side with others that are quite similar in size, location, age and price.

One reason why some homes for sale don't have as much competition is because of the overall decline in the number of homes listed for sale.  Inventory levels have dropped 16.5% over the past year, and there are now only 657 homes (single family, townhomes, condos) on the market in Harrisonburg and Rockingham County.

This is good, folks, especially if you are ready to put your house on the market and it is in a decent neighborhood, has been well maintained, and you are able to price it reasonably given market conditions.  If you'd like to examine your competition, just call (540-578-0102) or e-mail me (scott@HarrisonburgHousingToday.com) and we can set up a time to meet.
  

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Here is an overview of some of the more interesting, noteworthy, and/or popular stories of 2011 in the Harrisonburg and Rockingham County real estate market....

JANUARY  -  Has the real estate market finally hit bottom in Harrisonburg and Rockingham County?   "After five years of a declining residential real estate market in Harrisonburg and Rockingham County, I think we might finally be poised to see an increase in sales activity."  read more

FEBRUARY  -  Preston Lake Foreclosure Auction Results In $3.5M Sale To Wells Fargo   "The Preston Lake Trustee Sale took place today, February 3, at noon, and drew quite a crowd of Preston Lake homeowners, developers, attorneys, Realtors, and neighboring landowners.  Here's an overview of where things stand."  read more  and  more  and  more

MARCH  -  Sale of North 38 Apartment Complex Sets New Valuation of Student Housing in Harrisonburg   "An investor just bought a significant stake in the student housing market in Harrisonburg, which provides another data point upon which other student housing owners can value their investment."  read more

APRIL  -  How did Virginia fare in the housing bubble?   "Virginia is one among a handful of states that experienced a net gain in housing prices between 2000 and 2010."  read more

MAY  -  Founders Way Condos are APPROVED for FHA financing!   "As of this week, Founders Way Condos are approved for FHA financing.  These spacious condos have wonderfully open floor plans with 2 or 3 bedrooms, and start at only $149K."  read more

JUNE  -  Downtown Harrisonburg has a grocery store!   "The Friendly City Food Co-op opened this week, and it is a fantastic addition to Downtown Harrisonburg!"  read more

JULY  -  Are lower inventory levels leading to fewer home sales?   "We wondered aloud as to why it might be that we can't find them a home right now --- yet at the same time, sellers are wondering why they can't find a buyer for their home right now."  read more

AUGUST  -  Did the federal home buyer tax credit impact the pace of home sales in Harrisonburg and Rockingham County?   "The federal home buyer tax credit did not seem to have a lasting, positive impact on the local housing market."  read more

SEPTEMBER  -  Finding a rental property in or near Harrisonburg, VA   "While you can find any property listed for sale (via the MLS) all in one place, it's not quite as easy to find rental properties."  read more

OCTOBER  -  Record low interest rates spur on buyer activity   "Average 30-year fixed mortgage interest rates are now below 4.0%.  Wow!"  read more

NOVEMBER  -  HarrisonburgREO.com, your source for bank owned -- REO -- properties in Harrisonburg and Rockingham County   "If you are looking for bank owned (REO) properties in Harrisonburg and Rockingham County you can now easily find them on www.HarrisonburgREO.com."  read more

DECEMBER  -  Why am I cautiously optimistic about the future of our local housing market?   "You don't need to tell me --- I know --- home prices are still on the decline.  But here is the basis for my cautious optimism about our local housing market."  read more

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One of the best indicators in our local housing market is the pace of single family home sales.  Townhouses and duplexes are sometimes bought by investors, and thus if we include those sales, we aren't getting the best picture of the pace at which homeowners are purchasing homes. 

Given that single family (detached) homes are a good indicator for the market, I made a prediction in January 2011 as to what would happen in our local real estate market this past year.  Let's revisit those predictions for 2011....



So, how did I do?  I estimated that the sales pace of single family homes would stay within 2% of the 2010 pace of home sales.  Either a 2% increase in sales, a 2% decrease in sales, or somewhere in between.

Drum roll, please.....After 555 single family home sales in 2010, there were......618 single family home sales in 2011 -- an 11% increase!!!!  Wow, was I wrong! 


Please note that the 618 sales in 2011 might actually increase a bit further -- I'll publish my full market report in another week which will include final stats.

So, now for predictions for 2012.  It's actually a bit more difficult this year.  After an 11% increase in single family home sales during 2011 --- it's hard to be conservative in my estimates.  Before seeing these figures, I would have estimated we'd see a 2% to 5% increase in single family home sales in 2012.   But given that 2011 showed a whopping 11% increase in sales pace, I think I'll have to predict that we'll see a 5% to 10% increase in 2012.  That would put us somewhere between 649 and 680 sales in 2012 -- which is on pace with 2008.
  
As always, let me know if you agree or disagree.  I value your input as well.
  

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Daily News Record, Dec 23, 2011
By JEREMY HUNT

HARRISONBURG — After be­ing tied up more than four years in court, a lawsuit seeking to re­strict short-term rental activity in a Massanutten Village en­clave has been decided in favor of the defendants.

In November 2007, eight full­time Greenview Hills residents filed suit against 28 neighboring property owners — none of whom live in the subdivision — who market and rent out their houses to vacationers.

The plaintiffs argue the defen­dants' activities violate the subdi­vision's restrictive covenants by operating their dwellings as a business similar to a hotel. The defendants argued the covenants don't prohibit them from renting their homes on a short-term basis. Some full-time Massanutten Village residents have complained for years about short-term rentals and the behavior of vacationers. They sought to have the Rocking­ham County Board of Supervisors prohibit the practice via zoning or­dinance, but were unsuccessful.

Since the lawsuit was filed, four plaintiffs have asked to be dismissed from the suit and eight defendants have been dismissed because they no longer own property at Massanutten.

In a ruling signed Tuesday and filed in Rockingham County Circuit Court on Wednesday, Judge Jay T. Swett ruled in favor of the 20 remaining defendants.

The suit centered on a phrase in paragraph two of the Greenview Hills protective covenants and restrictions in the properties' deeds. "These lots are restricted to residential use and nothing but single family, private dwellings or residences designed for occupancy by one family shall be erected thereon," it says, according to Swett's ruling.

Some plaintiffs rent their properties less than 10 times a year and some more than 30 times a year, generating income ranging from under $4,000 to more than $40,000, according to Swett's ruling. Some rentals had as few as two people at a time, while others had more than 20.

The plaintiffs did not want to ban renting of homes in Greenview Hills, which they acknowledge is legal, but they sought to prohibit rentals that are "continuous and recurring vacation rentals to large groups of people," effectively making commercial use of a facility intended for residential.

Essentially, the case boiled down to the definition of "residential use" and "family."

According to Swett's ruling, short-term rentals do fit the definition of residential use, and the term "family" should be interpreted "broadly," thereby making the defendants' rental practices legal.

For example, Swett questioned in his ruling if an unmarried couple would be barred from owning or renting property in Greenview Hills. The covenants, written in 1975, are "silent with regard to any express restrictions on rental activities," Swett wrote.

The plaintiffs are Kenneth and Sandra Keller and Grover and Nancy Jaeger. The defendants are: Michael Chelst; James and Elizabeth Dwight; David and Connie Vander Haeghe; John David Ross; Elliott Balaber; Peter and Ellen Burke; Martin and Carol Ischinger; Willian Davidson and Cheryl Harrison- Davison; Ryan and Barbara Nelson; Jeffrey Goering; Charles Goering Jr.; Jean-Pierre Scarfo and W. Michael and Joanna Pumphrey.

Contact Jeremy Hunt at 574 6-273 or jhunt@dnronline.com

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As Business Insider puts it, the National Association of Realtors just made the mother of all data corrections. 

Basically, the National Association of Realtors (NAR) retroactively adjusted its accounting of the number of home sales that took place in 2007 (down 11%), 2008 (down 16%), 2009 (down 15%) and 2010 (down 15%).  Put simply, NAR had thought and had broadcasted quite widely that home sales were much stronger over the past four years than they really were -- and bear in mind, even the inaccurate, inflated numbers were quite depressing!

Why did it happen?

• FSBO Sales Declined:  NAR estimates the home sales based on a variety of data sources.  One reason for the inaccuracies is that the proportional number of FSBO sales declined significantly over the past four years.  Back in 2000, 16% of home sales were by owner, but in 2010 only 9% of home sales were by owner.  NAR didn't realize that this ratio had adjusted, and thus projected total home sales assuming that plenty (16% +/-) of sales were still by owner. 
• Builder Sales Declined:  Just as many more owners used Realtors over the past several years to sell their homes (instead of going FSBO), many more builders also used Realtors to sell their new homes.  This change in proportions also lead to over-reporting of home sales by NAR -- they were assuming the same number of sales were taking place directly from builders.
• Marketing Properties Through Multiple MLS's:  As housing markets worsened, more and more owners marketed their properties through multiple MLS's to broaden exposure.  This sometimes results in home sales being reported through more than one MLS, again over-inflating NAR home sales data.

Does it matter nationally?
It sort of matters retroactively -- everybody needs to go back and think that the housing market was worse than they thought before, and make their past decisions differently.  Oh wait, that's somewhat difficult to do -- so the national impact is simply that we need to readjust our historical understanding of the pace of home sales from 2007-2010 and be a bit less dependent on NAR home sales estimates, as they are ultimately, just estimates.

Does it matter locally?
Since the national housing market (if one could be said to exist) doesn't impact us too much at all, these adjustments to national housing sales figures don't impact us that much either.  Of much more importance is the pace of sales (and median price of those sales) on a local level.

Could it happen locally?
NAR and yours truly make different attempts as far as reporting home sales.  NAR attempts to report on total home sales (MLS, by owner, by builder, etc) -- and thus there can be inaccuracies in their data.  My home sales reporting is based solely on data reported through the HRAR MLS.  Thus, I'm not making any guesses -- I'm just performing analysis and providing commentary on home sales reported through our local MLS.

NAR's adjustments are rather significant, so let me know if you any questions or concerns beyond those addressed above.
 

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Wow!  It's been a long time (70 years) since short term interest rates have been this low!
  

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Many condo buyers would like to purchase their condo using an FHA loan, and some condo communities are no longer approved for FHA loans.  Here's the news from last month....



How might that affect you here in Harrisonburg?  Well, one of the newest and most exciting condo communities in Harrisonburg is Founders Way.  OK, yes, I do represent the developer and thus might be a bit biased -- but that's what we hear from the people who have bought at Founders Way too!  So, if you're interested in buying at Founders Way, can you get an FHA loan?



That's right folks, you can still (quite easily) buy at Founders Way using an FHA loan.  So if you're looking for an exciting new condo community in Harrisonburg, look no further than Founders Way, featuring:

• brand new one-level living at a low price point
• all exterior and grounds maintenance is performed by the condo association
• high speed internet and expansive cable package at a low cost through the condo association
• open floor plan (some with lofts) that provide a very different feel than a two-story townhome

To find out more about Founders Way....

• Visit the Founders Way web site 
• View photos of Founders Way
• View floor plans at Founders Way
• Come visit us on Saturday or Sunday between 1PM and 3PM
• Call me at 540-578-0102 or e-mail me

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Click here to download my full market report (27 pages, 7 MB, PDF) or read on for highlights....



November was a relatively positive month for the local housing market:

1. Home sales (barely) decreased in November (by one home sale) as compared to last November.
2. Year-to-date home sales have increased 2% over 2010 sales levels.
3. Year-to-date median sales prices have declined 4% as compared to one year ago.
4. Average days on market increased by 7%.
   

Despite several negative trends (#1, #3, #4 above) the positive trends (#2 above) is a long-term leading indicator that we are likely in the early stages of recovery for our local housing market.  After sustained increases in the long-term pace of home sales we should then start to see an eventual leveling off and increase in sales prices.



A strong surge of buyers in 2011 is leading the charge towards more stability in the local housing market.  As shown above, November 2011 was yet another strong month of contracts (76) showing a 27% increase over last November and a startling 77% increase over three Novembers ago.



Inventory levels continue to significantly decline, down 12% from a year ago.  Lower inventory levels (fewer sellers) combined with an increase in contracts (more buyers) will eventually lead to greater balance in the local housing market.



Despite the fact that our local housing market's median price has not yet stabilized, it is interesting to note that we have seen a steady improvement in median price per square foot for single family homes over the past year.  This is in sharp contrast to the steady decline seen in the four prior years.



The icing on the cake is that mortgage interest rates remain at historically low levels creating amazing opportunities for buyers.  At the end of November, the average 30-Year fixed mortgage interest rate was 3.98%. 



For an even more in-depth look at the Harrisonburg and Rockingham County real estate market, click the image above to download my full market report (27 pages, 7MB, PDF).

If you have questions about the report, or if I can be of assistance to you with real estate that you own, or that you'd like to own, please be in touch.  You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com. 
  

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This is good news for the local housing market!

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Each month inventory levels drop at the beginning of the month -- as quite a few listings expired on the last day of the prior month.  So it's possible that today's incredibly low inventory levels (744 properties) will climb back up by a bit over the next few days.

However, as things stand now, these are the lowest inventory levels we've seen in almost four years.  It's actually probably quite a few more months than that, but I have only been tracking inventory levels for the past 45 months. 

What does this mean?  Hope for further balance in the local housing market -- as the number of hopeful seller decreases, and the number of actual buyers increases, we'll return to a more balance market.

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If you are looking for a historical record of property transfers in Harrisonburg and Rockingham County, you can now easily find them on www.HarrisonburgPropertyTransfers.com.

Also, don't forget, if you are looking for properties with owner financing available in Harrisonburg and Rockingham County you can find them on www.HarrisonburgOwnerFinancing.com.

Also, don't forget, if you are looking for properties available for lease/purchase in Harrisonburg and Rockingham County you can find them on www.HarrisonburgLeasePurchase.com.

Also, don't forget, if you are looking for potential short sales in Harrisonburg and Rockingham County you can find them on www.HarrisonburgShortSales.com.

Also, don't forget, if you are looking for bank owned (REO) properties in Harrisonburg and Rockingham County you can find them on www.HarrisonburgREO.com.

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In very good news for the local housing market, foreclosures are declining in Harrisonburg and Rockingham County.  The graph above shows the number of Trustee Deeds recorded at the courthouse per year for 2008-2010 and the number recorded in the first ten months of 2011.

It is clear that 2011 has marked a sharp turning point in the foreclosure rate in our local area.  While we are not yet back to historically normal rates (70-100 per year), we have turned the corner from the peak of 270 in 2010.
  

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Click here to download my full market report (27 pages, 7 MB, PDF) or read on for highlights....



October was a relatively positive month for the local housing market:

1. Home sales increased 8% in October as compared to last October.
2. Year-to-date home sales increased 3% over 2010 sales levels.
3. Year-to-date median sales prices declined 3% as compared to one year earlier.
4. Average days on market increased by 8%.
   

Despite some negative trends (#3, #4 above) the positive trends (#1, #2 above) are an indication that we are likely in the early stages of recovery for our local housing market.



A strong sign of strength to come in the local housing market, October 2011 was a great month of buying activity, with 84 buyers committing to buy homes in Harrisonburg or Rockingham County.  This marks a 65% increase in buyer activity as compared to October 2010!



Trends are very slow to reveal themselves in annualized sales figures (shown above) because they are an indication of 12-month rolling averages.  That said, it seems that it may be a safe bet that home sales and home prices are on the mend when examining the graph above, which has now been showing increases in these long-term indicators for four months.



Some price ranges are recovering more quickly than others.  The graph above shows that the price ranges under $300K have been starting to see increases in sales over the past several months.  This should eventually roll over into the higher price ranges as buyers move up the price spectrum.



For an even more in-depth look at the Harrisonburg and Rockingham County real estate market, click the image above to download my full market report (27 pages, 7MB, PDF).

If you have questions about the report, or if I can be of assistance to you with real estate that you own, or that you'd like to own, please be in touch.  You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com. 
 

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Despite starting to see some colder weather (and the first snowfall of the year) October 2011 was a strong month of contracts for Harrisonburg and Rockingham County.  These 84 contracts was a significant increase over last October's 51 contracts -- and at 84 was right in line with May (88), June (84) and July (86).  Wow!
 

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Probably not, but there is still some exciting Siri-related news for our local economy....



Known facts....

Siri is a revolutionary personal assistant application on the recently released iPhone 4S.

Apple bought Siri in April 2010.

Siri was developed as a project of SRI International.

SRI International opened a campus in the Shenandoah Valley in 2009.

So....what does it mean?

OK, admittedly, SRI Shenandoah Valley might not develop a component of the next iPhone, but I think the storyline above points out the enormous upside potential of this developing research and technology company right here in Rockingham County.

Per the Shenandoah Valley Partnership, SRI's Center for Advanced Drug Research (CADRE), will focus "on improving the productivity of the pharmaceutical industry, helping the nation respond to bio-threats, and developing life-saving treatments for neglected and orphan diseases."

I think this is rather exciting for our local economy!
 

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The most recent real estate news in Harrisonburg and Rockingham County isn't all good news, but there is plenty to be excited about, particularly related to foreclosures.



The numbers of foreclosures filed in Harrisonburg and Rockingham County steadily climbed between 2008 and 2010 -- but now it seems to be reversing course. 

In 2010, there were 270 foreclosure filings, and only 758 home sales.

Thus far in 2010, there have only been 160 foreclosure filings and 600 home sales. 

This is a strong indicator that we'll finish out the year with fewer properties being foreclosed on, which should slowly strengthen the market.
  

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Click here to download my full, 27-page report on the Harrisonburg and Rockingham County real estate market, or read on for highlights....



The housing market in Harrisonburg and Rockingham County continues to show signs of stabilization and recovery:

1. September 2011 home sales (79) were 44% higher than in September 2010 (55).
2. 2011 year-to-date home sales are 2% higher than 2010 year-to-date.
3. Median prices have decreased 4% over the past year.
4. Days on market has increased 10% over the past year.

The positive indicator here is that the pace of home sales is (finally) starting to increase, even though prices are still on a slight decline.  Once the pace of home sales has been increasing for some time, we should see prices start to stabilize as well.



While contracts were down slightly in September (67 compared to 74 last September), contracts year-to-date are up 15%.  Yes, that's right, 15% more buyers have committed to buy properties this year as compared to last year -- indicating that we should see continued strength in closed home sales over the next several months.



Helping to balance the housing market, inventory levels have declined 14% over the past year.



After three years of declining sales pace and sales prices, both metrics are now increasing when examined from an annualized basis. 



If you have questions about the report, or if I can be of assistance to you with real estate that you own, or that you'd like to own, please be in touch.  You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com. 
  

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Come October 1, 2011 the loan limits for FHA mortgages will be reduced in many parts of the country.  Some would have you believe this will be disastrous for the housing market....



But will there really be that much of an impact on the housing market because of these new loan limits?   Alan Zibel at the Wall Street Journal explores this, wondering whether the changes really matter....



Beyond the possibility that these changes might not even matter much nationally, it's also important to note that....

• Only 2% of FHA borrowers in Virginia would be affected.  Of the 39,055 FHA loans issued during 2010, only 909 of these loans (2%) would no longer be issued based on adjusted loan limits in various areas in Virginia.  (source)
    
  
• The FHA loan limits are not changing in Harrisonburg and Rockingham County.  The current FHA loan limit for Harrisonburg and Rockingham County is $277,150 for a single family home.

Look up the loan limits in your local area by clicking here.
 

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Thus far, September is looking good, with 38% more home sales than last year!



Re-read last month's report if you missed it, and know that we have more positive data in September to continue what appears to be a stabilization of the market.
 

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