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If You Have Some Flexibility With WHEN You Buy Your Home Then Low Inventory Levels Are Less Of A Concern |
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 Housing inventory levels are low... just about any way you slice or dice the data. That doesn't mean there aren't any houses listed for sale. There are quite a few houses listed for sale. That doesn't mean the houses currently listed for sale won't be interesting to you. They very well may be interesting to you. But... depending on what you are looking for in your next home, you are likely to only have a few options from which to choose right now... and it will likely be the same next week and the week thereafter. But... if you have some flexibility in WHEN you buy your home, then these lower inventory levels shouldn't be as much of a concern for you. If you have to buy a house in the next two weeks, then low inventories will directly impact you and you will likely have very few options. If you can buy a house anytime in the next three months, then you should have plenty of options from which to choose during that timeframe, and low inventory levels will not affect you nearly as much. Let's chat about your timeline for making a purchase, as it relates to your move to the area, or as it relates to your current lease, and then we can get a sense of how concerned you should be about low inventory levels. | |
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Average Mortgage Interest Rates Are Just That, Average Mortgage Interest Rates |
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 The average (30 year fixed) mortgage interest rate peaked at 7.8% last October. Now, the average rate is right around 6.5%. But... take that with a grain of salt... or however the expression goes... Home buyers that lock in their mortgage interest rate over the next week are likely to see rates anywhere from 6% to 7%, depending on...
So, yes, if you buy a home this week, you might have a rate of 6.5%... or it could be a decent bit lower... or higher. That average rate is just an average of the rates offered by lenders for 30-year fixed rate, conventional financing with an 80% loan-to-value ratio. So, don't ask your lender for that average rate... ask what rates are possible for you based on your credit, downpayment, loan program and points. | |
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How Much Will You Compromise, And About What, When Buying A Home? |
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 Fair warning... most home buyers aren't able to actually figure this out until they have seen a house they want to buy. These days particularly (with fewer homes coming on the market for sale) it is likely that you will have to compromise a bit if you are buying a home. How, though, will you compromise...
Each home we go to view will likely have certain attributes that are just what you are looking for... and will also be missing some features that you would really like or you will really need. Thus, as we consider any given house, we'll be considering and discussing how the house fits your needs, what is still lacking, and whether the compromises that the house would cause you to make are ones you are comfortable with making. | |
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Sometimes Buyer And Seller Price Expectations Conflict On New Listings |
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 Some home sellers decide they ought to round up their list price a bit because surely buyers will expect them to negotiate. This might result in a house worth $400K being listed for $410K. Some home buyers expect all listings to go under contract quickly at or above the list price. This might result in them assuming that house listed for $410K will really sell for $420K or $425K. In such an instance -- a home buyer deciding whether they are willing to pay $420K or $425K for a house they believe is worth $400K -- likely results in the buyer not making an offer at all. So... Sellers - Price your homes reasonably - don't round up too much, or any at all, above the market value of the house. Buyers - Consider the list price as the list price - don't assume every house will sell for $10K or $15K or $25K more than the list price. Some will, but not all, and probably not most. | |
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Fewer City Home Sales, More County Home Sales In 2024 With Higher Prices All Around |
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 Happy Thursday morning to you! The summer seems to have flown by, and soon school will be starting for many of us... as parents of K-12 students, as parents of college students, as teachers or administrators at a K-12 school or professors or administrators at a local college or university. If you have a such a transition coming up, I hope you had a full and fun and relaxing summer and are excited for the school year ahead.  Shaena, Luke, Emily and I had a fun and fulfilling summer and soon Luke will be starting his second year of college and Emily will start 11th grade. The years fly by quickly! Before we start looking through the latest trends in our local real estate market, each month I offer a giveaway for readers of my market report. This month I'm giving away a $50 gift card to Jack Brown's. If you find me at Jack Brown's it will probably be enjoying one of their delicious burgers and some sweet potato fries. Click here to enter to win the gift card. Now then, where were we... ah, yes, the latest housing market data...  The chart above outlines some of the main trends in our local housing market and a few things stand out to me... [1] We have seen strong sales over the past three months as compared to last year, with a 14% year over year increase in the number of home sales taking place in Harrisonburg and Rockingham County. [2] This latest surge over the past three months (+14%) has been pushing back against the 7% decline in sales when we look at the past 12 months of home sales compared to the 12 months before that. [3] When looking just at the current calendar year, we have seen an 8% increase in the number of home sales taking place in Harrisonburg and Rockingham County in 2024 compared to 2023. ...and on sales prices... [4] Over the past year the median sales price has increased 6% from $318,480 to $337,500. [5] But when we look just at the current year to date (Jan-Jul) we have only seen a 4% increase in the median sales price compared to the same seven months last year. So, we're seeing more home sales in the first seven months of this year compared to the first seven months of last year... but sales prices seem to be rising a bit more slowly than they had been over the past few years. Sneaking a quick glance at detached single family homes, and then attached homes...  The median sales price of detached homes has increased 11% thus far in 2024 as compared to the same timeframe in 2023... to a median sales price of $388,000. That is to say that half of detached homes selling in Harrisonburg and Rockingham County are selling for $388K or more and half are selling for $388K or less. And how about those attached homes...  We have only seen a 5% increase in the median sales price of attached homes... which includes townhomes, duplexes and condos. The median sales price of these properties thus far in 2024 is $310,000... which means that half of the attached homes selling in Harrisonburg and Rockingham County are selling for $310K or more and half are selling for $310K or less. If you're looking to buy a home, the number of opportunities you might have will likely vary depending on if you want to buy in the City or the County. Here's what we're seeing in the City of Harrisonburg...  City home sales (shown above) have declined 17% in the first seven months of 2024 compared to the same timeframe last year. While 200 homeowners sold their homes last January through July, only 167 homeowners sold this January through July. This is largely a supply side issue... fewer sellers selling... not fewer buyers buying. Meanwhile, in Rockingham County...  If you have been hoping to buy a home in Rockingham County, you're in luck, there are many more opportunities to do so than in the City of Harrisonburg. In the first seven months of this year we have seen 17% more home sales in the County than during the same timeframe last year. But... one of the reasons why there are more home sales in the County than in the City is because most new homes currently being built are in the County (not the City) and new home sales are on the rise...  While only 175 new homes sold in the first seven months of 2023... we have seen 227 new home sales during that timeframe this year... which marks a 30% increase in new homes selling in our area. We have not, though, seen a 30% increase in existing homes selling...  We have seen... only a 1% increase in the number of existing homes selling in the first seven months of 2024 as compared to 2023. Looking one year further back on the chart above you'll note that the mid-500-ish home sellers who sold during this timeframe in 2023 and 2024 is well below the 708 existing home sales seen during that timeframe in 2022. Mortgage interest rates being what they are continues to impact how many homeowners are willing to sell their home. And now, some graphs to provide some visual insights into these latest trends...  May, June and July have been busy months for home buyers and sellers this year with a total of 401 home sales... as compared to only 352 in the same three months last year. Looking ahead, we are likely to see fewer home sales taking place in August if we track along last year's trend. These last three months have helped 2024 eek ahead of 2023...  After a significant decline in the number of homes selling in our area (1600-ish down to 1200-ish) between 2022 and 2023 we are now seeing a modest increase in home sales activity in 2024. The 789 home sales thus far in 2024 exceeds the 730 seen last year through the end of July, though it is well below the 943 seen in January through July of 2022. And as we have been seeing for quite a few months now, sales are slowly rising and price increases might be slowing a bit...  The bottom blue line, above, shows the annual pace of home sales in Harrisonburg and Rockingham County - measured monthly. Over the past seven months we have been (mostly) seeing this pace of home sales trend upwards. The top green line, above, shows the annualized median sales price in Harrisonburg and Rockingham County - measured monthly. We are still seeing steady increase in the median sales price, but it is not increasing quite as quickly as it has over the past few years. But of note... the median sales price of *detached* home sales is definitely still steadily increasing...  Market-wide median sales price trends can be affected by how many detached vs. attached homes are selling... or how many new vs. resale homes are selling. While the median sales price in our overall market is trending upwards a bit more slowly than in recent years, the detached median sales price is still *steadily* increasing. Just three years ago the median sales price of a detached home was just below $300K and now we are edging closer and closer to $400K. Lots of circles and arrows on this next graph... focus, folks, focus...  The graph above shows the number of contracts being signed each month. We saw much higher levels of contract activity this March, April and May than we did last March, April and May. Then, contract activity in June was about where it was last June... and July contracts were well below levels seen last July. This likely means that we will see fewer closed sales over the next few months, which is confirmed by the latest pending sales trends...  The number of pending sales (under contract homes) peaked in May 2024 and has been declining ever since. That said, current levels (267 pending sales) are still above where we were a year ago (252 pending sales) in Harrisonburg and Rockingham County. Another quirky metric of late has been inventory levels...  Inventory levels (the number of homes for sale at any given time) were steadily trending now between April and June, and then popped back up again in July 2024. The blue line above shows inventory levels last year and you can see a similar increase between the end of June and the end of July... so the increase this year is not unexpected, but does run counter to the steady decreases we had been seeing over the past few months. This following graph, tracking median days on market, has become much more interesting over the past year and a half...  For quite a few years (see the first third of the graph above) the median sales on market was sticking right around five days, regardless of the time of year. All homes were selling very quickly at all times of year. Now, we seem to be seeing a bit more seasonality in this trend, with median days on market (how quickly homes go under contract after they are listed for sale) trending upwards through the fall and winter and then back downwards in the spring and summer. So, don't be surprised if median days on market starts to rise again over the next few months. And finally, one of the main drivers of buying and selling activity of late...  Those darn, silly, pesky, mortgage interest rates. As mortgage interest rates rise, the cost of a monthly housing payment rises, assuming the same sales price. Over the past few years we have seen steadily rising home prices AND rising mortgage interest rates. When we see higher rates, buyers aren't quite as capable or as interested in buying... and sellers (if they would have to then buy again) aren't quite as interested in selling. If or as or when we see mortgage interest rates start trending downwards, we will likely see more buyers AND sellers enter the market. As noted above, during August, rates have fallen even further than shown on the graph... down to 6.47% and I have seen some buyers locking in as low as 5.99% recently. So, having absorbed all of those insights into the latest trends in our local housing market, what does it all mean for you? If you are thinking about buying a home in the next few months... things might see a smidge more hopeful. Mortgage interest rates are trending down a bit. Inventory levels are trending up a bit. Days on market might trend upwards a touch. Many segments of the market are still moving very quickly and are still very competitive, but not all segments of the market. Depending on what type of property you want to buy, and its location, and its price range -- you might be competing with multiple other buyers within a day of a house being listed for sale -- or you might actually be able to sleep on your decision about whether to make an offer on a new listing. If you are thinking about selling your home in the next few months... it is still relatively likely that it will sell quickly and almost certainly at a very pleasing price... but all property types, locations and price ranges are not performing equally right now. We'll want to dive a bit deeper into the data related to your specific home to devise the best pricing strategy and to give you reasonable expectations as to how quickly your home will sell. If you have questions about buying, selling, the process, the market or anything else, you are more than welcome to reach out anytime. You can contact me most easily by phone/text at 540-578-0102 or by email here. All the best to your and your family as this new school year begins... and if you don't have anyone in your life starting a school year, then just get excited about the eventual return of cooler temperatures as we head into the autumn months. :-) | |
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Where Do All Of The People Work Who Will Live In All The New Housing Being Built? |
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 This is a good question and one that I have had multiple people native to the area and new to the area ask me over the past few years... Where Do All Of The People Work Who Will Live In All The New Housing Being Built? If you drive around the Harrisonburg and Rockingham County area, you'll see quite a bit of new housing at various stages of construction. My non-scientific, non data-driven answer is as follows... 1. Many mid-sized to large employers in this area keep on growing. 2. We continue to see smaller companies starting up or being created in the Harrisonburg area. ...and perhaps (maybe) most significantly... 3. The pandemic at least partially severed the connection between "where I work" and "where I live" as it relates to the Harrisonburg area. After a year (+) of allowing some (to many) employees to work from home, some (to many) employers have realized that remote work has its benefits. Employees can be more productive, spend less time commuting and have a higher quality of life. And sometimes, that higher quality of life for a remote worker means working for a company in a larger metro area, and living in... Harrisonburg! This is not to say that there are suddenly thousands of people living in Harrisonburg and working for companies outside of the area... but that reality is much more in play now than it ever has been in the past. Who wouldn't want to live in Harrisonburg if one's out of town employer allowed for it!? :-) | |
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Mortgage Interest Rates Fall, Again, To Lowest Levels In Over A Year |
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 I suppose this might become an ongoing theme over the next few months but mortgage interest rates have fallen, again. The average 30 year fixed rate mortgage interest rate is now 6.47%... which is the lowest average rate we have seen since May 2023. These lower mortgage interest rates are likely to spur on more home buying activity as each time the rates drop it makes a home buyer's dollars go a bit further. If you plan to buy a home this coming fall, talk to a mortgage lender sooner rather than later to understand what your mortgage payment would look like given current rates... and perhaps you'll be able to keep requesting updated payment information if rates continue to fall. :-) | |
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After X Days On The Market Without An Offer, You Should Consider Adjusting Your List Price |
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 Solve for X... After X Days On The Market Without An Offer, You Should Consider Adjusting Your List Price Arguably, X varies based on the property location, property type, price range and much more. But regardless, the point remains the same, if some amount of time has passed (X) without an offer on your house, you should probably consider lowering the list price. For sellers in a particularly active price range, that might be as little as 14 days. For sellers in much of the market, that might be 30 days. For sellers with a particularly unique property that might only appeal to a small portion of buyers, that might be 60 or 90 days. The same logic also applies after a price reduction... If another X days passes, without an offer, you might want to consider a price adjustment again. | |
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Most Homeowners Make Home Improvements For Two Reasons |
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 Whether you are finishing some basement space, remodeling a bathroom, or upgrading your flooring, most homeowners are making home improvements for two reasons... 1. Greater Enjoyment and/or Utility This is typically the starting point for talking about or dreaming about a home improvement project. Homeowners will often imagine how they will get greater enjoyment out of, or greater utility from, their home after they complete their renovation project. If only we had some finished basement space for the kids to play and for guests to stay when they visit... if only we had a nicer primary bathroom... if only that old, tired, dated flooring looked a bit nicer... Homeowners almost always consider home improvements or renovations because they believe they will enjoy their home more after the work is complete... or their home will fill their needs (or their family's needs) better after the work is complete. 2. To Improve Their Home's Value Most homeowners wouldn't embark upon a home improvement project if it would lower the market value of their home. ;-) Thus, most homeowners consider making some home improvements or major renovations because they believe it will increase the value of their home. But... most home improvement projects have a less than 100% return on investment. That is to say that if you spend $50K on a home improvement project it might only increase your home's value by $20K to $30K... and if you spend $150K on a home improvement project it might only increase your home's value by $60K to $120K. Thus, in most cases, it is important that a proposed home improvement project checks off both criteria above... 1. You will get greater enjoyment or utility from your home after the work is complete. 2. The project will improve your home's value, even if not by the full cost of the work. | |
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It Is Reasonable To Pay A Bit More Than Market Value If... |
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 Most home buyers do not want to pay more than market value for the home they will purchase. If a home is worth $325K in the current market, then they would prefer to pay no more than $325K... and actually, less than $325K would be even better! ;-) But... there can be circumstances where it is reasonable for a buyer to pay more than market value for a home. The two circumstances that most quickly come to mind are... 1. If a house fits this buyer particularly well. If a home buyer is looking for a home in a particular location, with a particular style, with a particular layout... with particular features... or some variation thereof... it's likely that most houses that come on the market don't fit a buyer's particular needs that well. Sometimes, a house will come on the market that fit a buyer perfectly, or nearly perfectly. For such a house, it would be reasonable for that buyer to pay a bit more than market value. 2. If houses that fit this buyer do not become available very often. If a home buyer is looking for homes in this location, in that price range, and with those features... it's possible that multiple homes come on the market each month that fit the bill... and it's also possible that homes only come on the market every few months that fit that description. If houses that fit a buyer's criteria do not come on the market that often, it would be reasonable for that buyer to pay a bit more than market value. So... most of the time a buyer only wants to pay market value for home... but sometimes it is quite reasonable to be willing to pay a bit more. For the home noted above, with an objective market value of $325K... a buyer might be willing to pay $335K if it is an absolutely perfect fit... and a buyer might be willing to pay $345K if it is an absolutely perfect fit AND homes like this only come along every few months or even less frequently. | |
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How Many Days Did It Take For New Listings To Go Under Contract |
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 All new listings are not receiving multiple offers. All new listings are not under contract in a matter of days. But plenty of new listings are going under contract plenty quickly! Of the homes that have gone under contract over the past 30 days... approximately a third of them have been under contract within three days! Thus, if you are looking to buy in the near future... go see homes within a day of when they come on the market (whenever possible) and make sure you have a lender letter ready to go if you want to make an offer! | |
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Mortgage Payments Drift Downward As Mortgage Interest Rates Slowly Decline |
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 The average mortgage interest rate on a 30 year fixed rate mortgage has been slowly declining over the past three months, from 7.22% on May 2nd to 6.73% on August 1. Thus, as you would expect, monthly mortgage payments are trending downward as well. The graph above shows the principal and interest portion of the mortgage payment for a $300K purchase with 80% financing given the average mortgage interest rates each week for the past three months. As you can see, this theoretical mortgage payment has declined by about $80 over the past three months... which provides almost $1,000 per year of savings to a buyer given the lower mortgage interest rates. | |
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With Home Inspections Back In Play Again, Do Not Assume Your Contract Price Will Definitely Be Your Sales Price |
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 Plenty of buyers are making offers that include home inspection contingencies these days - and reasonably so. A home purchase is a large purchase and a major decision and it makes sense to engage a professional to help you understand the condition of the house. As such, home sellers should not assume that their contract price will definitely be their sales price, because... 1. Your home inspection might reveal property condition issues that you did not know existed, resulting in negotiations on repairs or pricing. 2. The buyer for your home might be more concerned about some known needed repair items than you might expect, resulting in negotiations on repairs or pricing. So, when your home goes under contract, great! But wait until you get past the home inspection contingency to consider your contract price to (likely) be your sales price. All that said, as with most things, how true the above will be for you and your home will vary based on the price range of the home, it's condition, the age of the major systems, and based on how much other buyer interest existed when your current buyer made their offer. | |
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Two Versions Of Paying Slightly More For A House Than You Had Hoped |
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 Sometimes a buyer loves a new listing but thinks it is priced a smidge higher than it should be - and they aren't sure what to do. Here are two versions of how such a scenario might play out... Scenario 1 - A house is listed for sale for $545,000. You love the house, but think it should only be priced at $535,000. You ask if there have been many showings - there have been. You ask if other buyers seem to be considering offers - they are. You offer $545,000 for the house and secure a contract to buy it. You're happy but in the back of your mind wonder whether you should have only offered $535,000. Scenario 2 - A house is listed for sale for $545,000. You love the house, but think it should only be priced at $535,000. You ask if there have been many showings - there have been. You ask if other buyers seem to be considering offers - they are. You offer $535,000 and the seller waits for a day to respond. You are then notified that they have received two other offers. You add an escalation clause to your offer to confirm your willingness to increase your offer as high as $550,000. Your escalation clause goes into effect and you end up paying $547,000 for the house. Or the not quite as exciting outcome... Scenario 3 - A house is listed for sale for $545,000. You love the house, but think it should only be priced at $535,000. You ask if there have been many showings - there have been. You ask if other buyers seem to be considering offers - they are. You offer $535,000 and the seller waits for a day to respond. The seller informs you that they accepted another buyer's offer and when it goes to closing you see that the other buyer paid $545,000 for the house. If you love a house, and it's a new listing, and it's only priced a smidge higher than you think it should -- there can be merit in just going ahead and making that full price offer to try to secure a contract to buy the house that you love. | |
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How Quickly A Home Seller Responds To An Offer Is Often Related To How Likely It Is They Will Receive Multiple Offers |
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 Nearly all home buyers would like home sellers to respond right away to their offer... but sellers don't always respond to offers in a timely fashion. One dynamic that is often (but not always) at play is whether a seller believes they will be receiving other offers. A few examples... 1. If a house was listed for sale on Monday, followed by 12 showings on Monday and Tuesday and an offer on Tuesday evening, a seller might wait a day or two to respond to the offer, believing that they might receive additional offers given the flurry of showings after having listed their home for sale. 2. If a house was listed for sale a month ago and a favorable offer is received on day 31, a seller might respond rather quickly, even if there is another showing scheduled for the following day. 3. If a house was listed 10 days ago and there have been 15 showings, but it wasn't until that 15th buyer viewed the home that they decided to make an offer, a seller might respond rather quickly, even if there are three or four more showings scheduled in the coming days. There are certainly usually other dynamics at play as well that affect how quickly a seller responds to an offer - but the likelihood of receiving other offers usually plays a part in the speed of their decision making. | |
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Another Busy Summer For Home Buyers (And Sellers) |
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 It has been another busy summer for home buyers and home sellers thus far this year. As shown above, 200 buyers (and thus, sellers) have signed contracts on homes in Harrisonburg and Rockingham County between June 1 and July 25... as compared to 204 last year during the same timeframe. We will likely continue to see relatively strong contract activity as we move into and through August - though things get a bit irregular in the second half of August as many folks are preparing for the start of the school year... either with kids who are students... or as teachers. | |
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Ask About The Age Of The Roof And Heating System Before Making An Offer |
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 When the home inspector says "the roof is fine but probably will need to be replaced in three to five years" it isn't reasonable to ask the seller to replace the roof. When the home inspector says "the heating system is working just fine but is beyond it's statistical life expectancy" it isn't reasonable to ask the seller to replace the heating system. But... it is reasonable to think differently about the value of a home if the roof and/or the heating system will need to be replaced soon. So, simply put, ask about the age of the roof and heating system *before* making an offer! | |
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All Homes Are Not Appealing To An Equal Number Of Home Buyers |
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 There are many more home buyers in our market who can buy a $300K home than there are that can buy a $500K or home or a $800K home. But... we can't over generalize and assume that there will be tons of buyers for every $300K home, many buyers for every $500K home and just a few buyers for every $800K home. After all, all homes are not appealing to an equal number of home buyers. Some homes are broadly appealing to many buyers, independent of their price, perhaps because of their floor plan, features and finishes. Some homes are quite narrowly appealing to just a few buyers, independent of their price, perhaps because of their floor plan, features and finishes. Before we list your home for sale... and before we finalize a pricing strategy for your home... we'll need to evaluate how broadly appealing we believe your home will be to buyers in the current market. | |
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As Your Home Search Continues, Will You Become More Or Less Picky? |
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 Every new listing isn't having multiple offers these days... but plenty of new listings are getting lots of attention... and some are having multiple offers. As a result, some buyers are still having a difficult time securing a contract to buy a home. If you are such a home buyers... who has been searching for a home for months and months... or who has unsuccessfully made offers on home after home... Will you become more or less picky as time goes on? Some buyers will get more and more flexible with their home search criteria as the months go on, as they just... want... to... finally... purchase... a... home. Some buyers will get more and more picky as their home search continues... figuring that if they've waited this long to find a home, they might as well wait a bit longer to find a home that is a great fit for their needs. If you are hoping to buy in a popular price range or location or property type such that you have lots of competition from other buyers... will you become more or less picky as time goes on? | |
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Only Six Townhomes Remain In Phase Two Of Congers Creek! |
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 Brand new townhomes are being built at Congers Creek, located on Boyers Road, just minutes from the Sentara RMH Medical Center -- but only six townhomes remain for sale in Phase Two! If you are hoping to buy a townhome in Congers Creek and move in this calendar year, there are likely only six more townhouses that will be complete within that timeframe. Phase Three of Congers Creek will be announced soon, but completion dates will likely be in early 2025. Check out available homes at Congers Creek here and let me know if you'd like a tour of the model home. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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