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84 out of 100 buyers are buying for less than $300K |
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Looking at home sales in the past year we find that....
Clearly, that also means that only 6% of our local market is comprised of home sales over $400K. | |
2016 Good Housekeeping Awesome Women Awards |
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A temporary, fun, diversion from real estate.... My good friend and TakeThemAMeal.com business partner, Adina Bailey, has been recognized by Good Housekeeping Magazine as one of their Awesome Women of 2016. Read more about this at Good Housekeeping, or in today's Daily News Record. | |
The brand new Massanutten Bike Park is fantastic! |
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A brand new bike park with a lift system recently opened at Massanutten Resort, and Luke and I decided to go check out this past weekend. It was a blast! Admittedly, Luke crashed on his first run, sliding off of the side of a trail and tumbled down a rocky embankment (or a cliff, as the story is told) but he didn't break any bones and we had multiple successful runs later in the day, even if at a more moderate speed. There are a variety of trails for different skill levels, and one of the most enjoyable aspects is that the ski lift will carry your bike up the mountain for you to start each run.... Read more about the new bike park via this Daily News Record article, a few excerpts of which are below.... The park features six trails along four levels of difficulties. Five are open for use and the sixth should be finished by the end of August, said Kenny Hess, Massanutten's director of sports and risk management.I expect that Luke and I will be going back again soon for another afternoon of biking and I encourage you to check it out as well. Plan your visit to the Massanutten Bike Park by checking out their hours, rates, etc. here. | |
Beautiful Home Adjoining Lake Shenandoah |
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Opportunities like these do not come along every day. A beautiful house located immediately adjacent to Lake Shenandoah has just been listed for sale..... Enjoy privacy, views and direct access to Lake Shenandoah from this well maintained Lake Pointe home with a full lower level apartment! This home offers spacious one-level living with a living room with fireplace, an eat-in kitchen, formal dining room, office, master suite, two additional bedrooms and a full bath plus an rec room (with laundry room) all on the main level. The lower level features an expansive family room with full bathroom, plenty of unfinished storage space PLUS a complete one bedroom apartment with living room, kitchen, dining area, bedroom, bathroom and clothes washer/dryer! Don't miss the immaculate, oversized garage, and the large custom-built deck looking out to the 1+ acre yard, Lake Shenandoah and Massanutten peak!Find out more about this beautiful new home by visiting the property website.... Or, by walking through the home online.... Or by reviewing the floor plans.... | |
You are most likely to sell your home in the first 60 days on the market |
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And by that I mean that that more than 50% of the homes that sold in the past year went under contract within the first 60 days that they were on the market. So, as a seller, if you are getting ready to put your house on the market, make sure you are thinking about price, condition and marketing. If your house has already been on the market for 60 days, and is not under contract, it might be time to think through....
Of course, plenty of homes (46%) go under contract after they have been on the market for 60 days -- so that is not necessarily the time to panic -- but it is a good time to pause and take inventory of where things are, making sure that you feel confident in your strategy for moving forward towards a successful sale. For even more analysis of our local housing market, check out.... | |
Will we see 1200 home sales this year in Harrisonburg and Rockingham County? |
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Based on how the year is going thus far, I think we might see 1200 home sales this year. We are currently 79 home sales ahead of the 2015 pace at this time of year -- and if we add those 79 home sales to last year's 1125 home sales, we'd be just over 1200 sales for the year. The only time we have seen more than 1200 sales in a year in Harrisonburg and Rockingham County was between 2003 and 2007 -- the infamous housing boom that lead to the dreaded housing bust. It seems unlikely that 1200 home sales in 2016 will be a sign of another boom (and bust) on the way -- as we are seeing much slower and steadier growth now. For even more analysis of our local housing market, check out.... | |
Market Balance By Price Range |
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Many housing market analysts consider a six month supply of homes for sale to be an indication of a market that is balanced between buyers and sellers. As such, and based on the information presented above, it would seem safe to say that....
For even more analysis of our local housing market, check out.... | |
More Homes are Selling, Faster, at Higher Prices in Harrisonburg, Rockingham County |
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Learn more about this month's Featured Property: 580 Spring Oaks Drive I just published my monthly report on the Harrisonburg and Rockingham County real estate market. Jump to the full online market report, watch the video overview below, download the PDF, or read on for highlights.... First, a video overview.... Now, let's take a look at the overall market performance in July.... A few things jump out at me when looking at the chart above....
July could be seen as a disappointment in some ways. We didn't see sky high home sales, towering over all previous months of July. We only saw a tiny 1.85% increase in sales as compared to July 2015. But wait -- before we become too glum about the 110 home sales in July, let's not forget the record breaking months of sales that we saw in May and June! Just for fun, let's look at May through July home sales for the past few years....
So, yes, I think we can be satisfied with the 110 home sales we saw in July 2016 given the slightly larger context. The graph above is somewhat complicated, but very important as to an understanding of our local housing market. The green "SELLERS" trajectory is showing the number of homeowners trying to sell their homes. The blue "BUYERS" trajectory shows the number of buyers closing on the purchase of homes in a six month period. This graph, therefor, is a good indication of overall market balance in our local housing market, as many housing market analysts consider a six month supply of homes for sale to be a sign of a market that is balanced between buyers and sellers. As shown above, after many years, we finally saw these trajectories cross last month. That is to say that there are now more buyers buying in a six month period than there are sellers selling. As such, if we've been approaching a balanced market for the past year, it is now definitely "in balance" -- even if that varies some from price range to price range. Taking a look at buyer activity in the form of signed contracts, we see that July was another relatively strong month with 119 contracts signed -- as compared to 118 last July. Put in a slightly larger context, we have seen an average of 136 contracts per month over the past five months -- as compared to an average of only 117 contracts per month during the same timeframe in 2015. One of the ways that we have achieved the market balance illustrated above is by a reduction in the number of homes for sale. As the graph above indicates, we have seen a 15% decline in inventory levels over the past year. Thus, buyers a year ago had 644 homes to choose from -- and today can only choose from 549 properties. OK, let's cut off my ramblings about our local market there for now. There is a lot more more in my full real estate market report, but I'll let you explore that and read further on your own if you so choose. I'll continue to delve into the latest trends on HarrisonburgHousingToday.com over the next few days, but if you just can't wait, feel free to read the entire report online....
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Housing costs stay relatively level despite increasing home values |
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How much does it cost on a monthly basis to buy the median price home in our area, assuming 80% financing? Today, that adds up to an $681 monthly payment -- which is right in the same ballpark as what we've seen for the past two years ($850, $856). How can housing costs be staying relatively level if home values are increasing? Well, it's the declining mortgage interest rates, of course! The graph above shows how much you would pay in a monthly payment for each of the past 16 years if you financed 80% of the purchase price at the average interest rate for that year. These payments include an estimate for your insurance costs, and property taxes based on Harrisonburg's current rate of $0.80 per $100 of assessed value. Another pretty wild perspective -- over the past 16 years, housing costs (understood as outlined above) have only increased by 9.6%. | |
Should you list your home in August, September or October? |
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Generally speaking, you should list your home sooner rather than later. As shown above, we are likely to see a declining number of buyers signing contracts over the next few months. August is always the busiest month of buyer activity, then September, then October. That said, there are only 26% fewer contracts signed in October (on average) as compared to August, so it is not a drastic slowdown. | |
The layout (floor plan) of a home is one of the most important aspects for many buyers |
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If a buyer is buying over $400K, or even over $300K, the layout of the home becomes very important to them. That is not to say that it is unimportant for a $200K buyer -- but someone buying a more expensive home oftentimes plans to stay in it for a longer time frame. If not the #1 feedback, the #2 feedback I receive from showings of homes priced over $400K is that the layout just didn't work for the buyers. They wanted another bedroom here, instead of there. They wanted a more open floor plan. They wanted a more formal dining room. They wanted a more spacious basement. Challengingly, the layout is something that is hard (nearly impossible) for a seller to change in order to appeal to a wider segment of buyers. Thus, if your home has a layout that continues to not work for buyer after buyer, you must either wait (and potentially wait and wait and wait) for the buyer who loves that layout -- or adjust the list price to make the house (even with its layout) more appealing to more buyers. That said, as reflected in the conversation at the top of this post -- a great deal on a house is not always enough to sway a buyer beyond the layout challenges that a house offers. | |
Should you accept a home sale contingency? |
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Based on the analysis above, it would seem that sellers are not (in almost all cases) accepting home sale contingencies. Here's the logic....
I must say, I was quite surprised to find this to be the case --- I thought perhaps 10% - 20% of contracts might have kickout clauses (and thus home sale contingencies) because plenty of buyers have to sell before buying. It would seem that most buyers are likely waiting to make offers until they have their own properties under contract (thus eliminating the need for the kickout clause) AND/OR most sellers are not accepting offers with home sale contingencies unless the buyers' houses are already under contract (thus eliminating the need for the kickout clause). If you are a buyer, I would certainly suggest the strategy outlined above (and the only one that is apparently working with sellers right now) --- get a contract on your house and THEN make an offer on the property you would like to purchase! | |
Explore More Discovery Museum in downtown Harrisonburg expanding upwards! |
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Explore More Discovery Museum, in downtown Harrisonburg, is expanding upwards, onto the 2nd and 3rd floors. The future 2nd floor Arts & Innovation area will offer eight new, interactive exhibit galleries! Explore in the tree house,build in the construction zone, fly the airplane, create movies, music and art! The 3rd Floor Community Education Center will provide greatly needed multi-purpose space for educational programs and special events. Two new classrooms and a kitchen facility will offer unique opportunities to expand enrichment offerings. Construction is in progress! Read more about the expansion here and consider making a donation to support this effort. | |
Airbnb in Harrisonburg (and Rockingham County) |
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Can you find an Airbnb rental in Harrisonburg or Rockingham County? It seems so. Per a July 24, 2016 Daily News Record article, there are "[...] almost 300 registered Airbnb locations in the Shenandoah Valley [...] from a $27-per-night RV in Hinton to an 8-bedroom house in Luray for $600 a night." But as a property owner, is it legal for you to rent out your home in Harrisonburg or Rockingham County via Airbnb? Maybe, maybe not? From the DNR article.... While Airbnb is spreading around the Valley - and the globe - it faces resistance from governments and zoning laws. Adam Fletcher, director of planning and community development for the city, said Airbnb renting is "for all intents and purposes" not allowed in Harrisonburg.Read more in the full Daily News Record article. | |
Diving Deep Into APPRAISAL DELAYS |
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Silly me! Appraisal delays are NOT only related to increasing sales. Teri Robinson, of Vision Appraisal Services, kindly educated me on some of the other factors that are affecting appraisal delays. In summary....
So, it's not just more than just more sales, more fully, it is.... More Sales + More Paperwork + Fewer Appraisers = Appraisal Delays Still want to read more? Keep reading, from Teri....Since the 2008 downturn and subsequent housing collapse, the turmoil in the financial industry created many burdensome regulations on the only Licensed/Certified person in the financial process (prior to Loan Officers having to be Licensed/registered).So -- I stand corrected since yesterday -- yes, higher sales volume is contributing to slower appraisal timelines -- but there are other big picture factors at work here as well. | |
High Sales Volume (GOOD) Creates Long Appraisal Delays (BAD) |
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Most folks are pretty excited about the fantastic pace of local home sales in the first half of 2016 -- however, there is a downside. As shown above, there are three main hurdles to buying and selling a home -- the home inspection, appraisal and loan commitment. Well, right now, on many if not most of the transactions I am working with, we are experiencing significant delays on appraisals being completed. It seems that local appraisers are having difficulty keeping pace with the roaring pace of home sales. This, then, creates ripple effects as buyers and sellers are either delayed in knowing that the transaction will be successfully moving forward -- are closing dates are pushed back. Again, it's great that we're seeing so many home sales (no complaints there) but the much slower than normal timeframe for appraisals being completed is creating some real headaches for buyers and sellers. So, if you're buying (or selling) EXPECT DELAYS when it comes to the appraisal. | |
Current mortgage rates still WELL below 12 month average |
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If I said, a year ago, that mortgage interest rates were going to rise soon --- I was WRONG!!! Current mortgage interest rates are just below 3.5%, and while I am still thinking that they could or will start to increase soon --- I would not be surprised if they are still below 4% a year from now. Buyer still have great buying power, and the opportunity to lock in super-low interest rates for the next 30 years. | |
Where to start when considering the purchase of an investment property |
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If you are considering the purchase of an investment property, I believe the first things you need to think about are.... BUDGET How much are you able or willing to spend on an investment property? This can be determined by your financing ability, or by the amount of cash you have to put into the purchase (for the down payment or closing costs), or simply by how much of an investment in a rental property you want to make at this time. INVESTMENT GOALS Are you planning to purchase and hold this property indefinitely? Or are you looking at a five year time horizon? Based on the amount of money you are putting into the transaction (compared to how much you are financing) are you hoping to break even on a monthly basis? Are you hoping to clear $X / month in positive cash flow? What are you hoping to get in return for your investment in the short term and long term? RISK TOLERANCE Relatively early on, you will need to decide how comfortable you are with risk, particularly because the more risk you take on, the more potential reward you have for taking that risk. The easiest way to think about this (in our local investment property market) is whether you are comfortable with buying student housing -- which comes with high rental income, but also the potential for more property damage and vacancy. If we gain some clarity on your budget, your investment goals and your risk tolerance, we can then narrow the scope on which properties it will make sense for you to consider as a potential investment property purchase. | |
Where to find the best deals on houses in Harrisonburg |
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One way for investors to identify the best deals in Harrisonburg is to compare the list price of each active listing to its assessed values. To make it super easy for you (and any other aspiring investors) I have created BestDealsInHarrisonburg.com which features properties that are being offered at a low list price compared to their assessed value. This is likely to mean that they are a "good deal" -- though if their assessed value happens to be high (relative to their market value) then the deal won't be as sweet. As always, consult a Realtor (such as myself) for expert advice on whether any particular property really is a great deal. BestDealsInHarrisonburg.com is simply shuffling some good prospects to the top of the pile for your consideration. What are you waiting for? Go check it out at BestDealsInHarrisonburg.com. | |
When making a low offer, accentuate your other offer terms |
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If you are making a low offer, you can increase the appeal of your offer by strengthening your other offering terms.... DEPOSITS Make the largest deposit you are comfortable with so the seller knows you have money "on the line" and that you won't risk losing that money by attempting to walk away from the deal. CLOSING COST ASSISTANCE Sellers don't just look at the contract price --- they calculate their net proceeds based on the offer price and any credits or closing cost assistance. Only ask for assistance if you truly need it. FINANCING Provide as much detail as possible about your financing intentions, and always include a pre-approval letter. Sellers who believe you are capable of financing the purchase will be less hesitant as they consider other terms of your offer. And yes -- offer cash, a large pile of it, if you are able. :) PERSONAL PROPERTY Don't automatically ask for everything the seller intends to convey --- if you don't need them all, leave them out of the offer. Allowing the seller to keep their washer/dryer (for example) may make them more flexible in other areas. INSPECTIONS Having a professional inspect the property you are purchasing is usually a good idea; however if you only intend to do it for informational purposes, consider leaving it out of the contract negotiations and conducting it post-settlement. SETTLEMENT & POSSESSION If possible, cater your settlement date and the details of transferring possession of the property to the needs or wants of the seller. This can go a long way towards gaining seller flexibility on other contract terms. Finally, research the seller's context for selling. That information can be invaluable in negotiating a successful contract. | |
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Scott Rogers
Funkhouser Real
Estate Group
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scott@funkhousergroup.com
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