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How Much Are Sellers Negotiating On Price These Days? |
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 If you're looking to buy a home under $250K, should you only consider homes priced at or below $250K? Probably not - some sellers of homes priced above $250K will negotiate down to $250K. Should you look at homes priced above $500K? Probably not - most sellers of homes priced above $500K probably will not negotiate down to $250K. Both of those are probably obvious to most home buyers, but how do we understand the negotiability dynamics between those two mostly obvious statements? The data above is a first look at that puzzle - with some constraints. Basically, I looked at one year of City/County home sales, but limited it to homes with 1500+ square feet, 3+ bedrooms, 2+ bathrooms, on less than an acre, between $200K and $400K. So, not a canvas of the entire market -- but a pretty reasonable chunk of the middle of our market not likely to be thrown off by lots of investors (lower priced or attached properties) or high end buyers (high priced properties). And - after that intro - here's (some of) what we find...
So - hopefully that provides some guidance as to what you might expect as a buyer. If you see a home listed for 11% above your budget -- there is likely only a 1% chance that the seller will sell at a price that works for you -- or, put another way, you might have to find 99 such properties (where the seller won't come down 10%) before you find the 100th where they will. | |
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Flirting With Selling A Rental Property |
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 Depending on your short and long term financial goals - you may want to list your rental property for sale for one month between tenants... In a recent conversation with the owner of a rental property, they were reflecting on the fact that after a tenant recently vacated their rental property (a townhouse) they were making quite a few updates and improvements to the townhouse based on some aging components and finishes in the property. They realized that the townhouse would be in better shape than it had been for years -- and that the condition would likely start to deteriorate (even if just a bit) as soon as they moved tenants back in. So, they wondered whether they should go ahead and just sell the townhouse instead of renting it again -- since it would be in great shape. But they lamented the fact that they'd need to keep it off the rental market for several months to see if it would sell at a price that would suit their financial goals - in other words, a sales price whereby it would make more sense for them to sell it than to continue to rent it. Here are a few thoughts I shared with this owner of an investment property...
So - here's an idea, if you own an investment property and you are about to have a tenant move out and you are about to make some improvements to the townhouse... Move the tenant out. Make the improvements. List the townhouse for sale for one month at a price for which you'd be happy to sell instead of continuing to rent the property -- so long as that value is generally in line with recent sales prices for similar townhouses. With this concept you don't have to commit to listing the property for six months, missing out on rental income, etc. -- but you can quickly determine if you could sell the townhouse while it is at its peak (from a condition perspective) at a price that would make it worthwhile for you to do so. OK - that was a lot. I'd be happy to talk it all through with you as well - in person, by email, by phone, etc. If you own a rental property and *might* want to sell it soon - be in touch (scott@hhtdy.com or 540-578-0102) and let's talk strategy... | |
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Why Investors Eventually Sell Their Rental Properties |
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 If you own a rental property, you might wonder from time to time whether you should keep or sell that property. I generally advise my clients to keep their rental properties, and not to sell them unless there is a good reason to do so. Here are some of those good reasons... VALUE - If the value of your rental property is currently high, and there is a reasonable chance that it won't be quite as high in the coming years, then now could be a good time to sell the rental property. INVENTORY - If there are very few competing properties for sale right now (which would lead to a speedy sale) but there will be many, many new properties built in the near future (which could result in a slow sale) then it might make sense to sell the rental property now vs. later. EQUITY - If you have owned the property for a decent period of time you may have a good bit of equity tied up in the property - and perhaps you'd like to do something else with that money. Maybe you'll use the sale proceeds for another investment (real estate or otherwise) or to pay off some debt, make a large purchase, go on a trip, who knows, but sometimes selling a rental property is a key part of freeing up some cash to make some other financial moves. HASSLE - Maybe you are tired of dealing with owning a rental property. Regardless of whether you manage the property yourself, or have a professional property manager, there can still be some annoying details to attend to with property maintenance, uncooperative tenants, etc. MAINTENANCE - Perhaps your rental property is 20 years old and you're pretty sure that if you keep it for another 3 - 5 years you'll have to pay for a new roof, new heating system and new water heater. If so, it might make sense to sell the property now to avoid those major capital expenses. TENANTS - If most of the prospective buyers for your rental property will be owner occupants, then the time between tenants might be the perfect time to sell your rental property. PARTNERS - If you purchased the rental property with a friend or family member, and they would like to move their investment dollars elsewhere, then it might be a good time to sell the property. RENTAL RATES - If rental rates are starting to decline, changing the performance of your investment, it might make sense to go ahead and sell, unless you see a turn around happening in the near future. IMPROVEMENTS - Perhaps your most recent tenant absolutely trashed the property, and you have just completely renovated it, such that the property has never looked better. This could be an ideal time to sell before the condition starts to deteriorate again. All of these potential reasons to sell are quite general - so feel free to touch base if you want to chat more specifically about your rental property and whether it would make sense to sell it now, or keep it for the next few years. | |
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Potential Challenges of Selling A Rental Property in Harrisonburg |
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 Do you own a property in Harrisonburg occupied by a tenant? When you are ready to sell it, how will you go about that process? Will you list the property for sale while the tenant is still living in the property?
Will you list the property for sale after the tenant has moved out?
OK -- admittedly, I'm spelling out the worst case scenario of both sides of this issue -- hopefully making it clear(er) that there is no sure-fire easier, faster, better way to sell an investment property. There can be challenges in listing the property for sale while the tenant is still occupying the property, and likewise, if you list the property for sale after they move out. We'll need to work together to determine the best game plan for your property, perhaps considering...
It doesn't have to be difficult to sell a property occupied by a tenant, but we'll want to approach the process thoughtfully. Let me know if you're planning to sell an investment property in 2020. | |
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Highest Pace Of Home Sales In Almost 13 Years |
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 One more bit of context for you to digest as we start off the week -- at the end of January 2020 we hit an annual pace of 1,352 home sales in Harrisonburg and Rockingham County. That is the highest number of sales in a year that we have seen in almost 13 years! We have to go way back to 2007 to find a higher annual pace of home sales. For additional insights into the current (red hot) local housing market, feel free to check out my full market report and commentary here. | |
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Just How Unusual Was The Pace of Home Sales In January 2020? |
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 Particularly unusual, I'd say. Looking back 17 years, the highest number of home sales we had ever seen in January was 79 home sales -- but this January (last month) there were 97 home sales! What a month! Stay tuned to see if we'll have another high octane month of sales in February. In the meantime, feel free to check out my full market report and commentary here. | |
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Home Sales Soar To Surprising New Heights in January 2020 |
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 Time seems to be passing quickly these days, perhaps because my two kids are growing up faster than I can believe - age 15 (also known as "almost driving") and 11 (but 12 next month!). In the vein of time passing quickly, I was surprised to realize this week that the year is essentially 1/8th of the way over now!? How does the time slip by so quickly? Well, if you blinked, and missed January - you missed a LOT of home sales in Harrisonburg and Rockingham County. We'll get to that soon (keep reading) but first I'll point you to a few quick links... OK - now back to the business at hand - breaking down the latest trends in our local housing market. First, some of the basics...  As shown above...
If we then dive into detached (single family homes) and attached (townhouses, duplexes and condos) we find relatively similar trends...  In the breakdown above, you might note that...
And now, the visual of what we'll call a crazy January...  If there was one thing it seemed we could count on, it was that we'd see between 60 and 70 home sales in January. That's what we've seen for the past three years - and looking back even further (2010-2016) we find even lower months of January sales - 47, 40, 41, 49, 56, 49, 67. But not this year. This year started off with a BANG with a shockingly high 97 home sales in Harrisonburg and Rockingham County. Could this be an anomaly? Will February sales be miserably slow, bringing a January/February average to more normal levels? Maybe. Will every other month this year fall back in line with normal historical trends? Maybe. Or -- will this year be unlike any prior with much higher sales than expected, all year long? Maybe. Stay tuned to see how things shape up after this blockbuster month of sales in January. And look what this crazy January contributed towards...  The data above looks at 12 months of data at a time - month after month - to see long term trends. These long term trends have now pushed us to the point of having 3+ year highs in both categories shown - the pace of sales and the price of sales. The median sales price of $223,500 is higher than it has been in many more than three years. Likewise, the annual pace of 1,352 home sales is higher than it has been in over three years. So, it's a wild time right now in the local housing market with steady growth in sales prices and stable but strong numbers of home sales. Circling back to the prior question - will home sales taper off in February?  I'm going to lean towards "no" -- given that 95 contracts were signed in January -- many of which will result in February home sales. As an aside - I have been tracking "under contract" data since 2008 -- and there has never been a January with quite so many contracts signed as we saw this January. So, maybe February will be a relatively strong month for home sales as well? And these increases, while one major metric keeps decreasing...  Indeed, despite increasing sales, the number of homes on the market at any given time keeps declining. We've seen a 27% year-over-year decline in the number of active listings on the market. So, how do more homes sell if fewer homes are on the market? It seems that plenty of homes are coming on the market for buyers to buy - but because buyers are contracting to buy them so quickly these new listing aren't staying on the market long enough to allow inventory levels to see an effective increase. Speaking of buyers contracting to buy homes quickly...  More than half (58%) of homes that have sold in the past year were under contract within 30 days of being listed for sale. Homes are, indeed, selling quickly. The median "days on market" currently stands at 18 days. A nice time to be a home seller if you're hoping not to have a prolonged period of time having buyers coming to view your house. Depending on your home's price, condition, layout, location, it may very well go under contract quickly! And today's buyers are paying lower mortgage interest rates than we've seen in a while...  The average mortgage interest rate on a 30 year mortgage has now dropped to 3.51% - the lowest rate seen in over three years. Buyers who are currently buying a home are fixing in lower monthly payments than they would have seen with any recent mortgage interest rate - though that is offset somewhat by the increases in median sales prices over the past few years. OK - that's it for now - I'll be diving into a few more market dynamics in the coming days. But until then... If you're planning to sell your home in 2020 -- let's chat SOON about the best timing for doing so, what you should do to prepare your home for the market, and of course, we'll want to start by analyzing your segment of the market. If you're planning to buy a home in 2020 -- get ready to compete with lots of other buyers in a low inventory housing market. To assist you, sign up to get alerts of new listings, talk to a lender to get pre-approved, and let's get ready to make a mad dash to see new listings as soon as they come on the market! As always -- shoot me an email if you have follow up questions or if you want to chat about your plans to buy or sell. | |
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The Role of a Realtor in Representing A Home Buyer |
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 Home buyers would be well served to have a Realtor represent them in their home purchase. So, before you call the listing agent to see a home listed for sale, you should understand a bit more about buyer representation.
In representing you in your home purchase, your buyer's agent would be performing tasks such as:
So -- you can call the listing agent (who is contractually bound to represent the seller's best interests) -- or you can hire a Realtor to represent YOUR best interests as the buyer. Clearly, I recommend the second option. Beyond buyer representation, there is a lot more to know about and think about regarding the home purchasing process. Read more at....  | |
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Who Is Winning In 2020 In The Local Real Estate Market? |
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 Sellers are winning - rather universally. Every market metric works in their favor. Buyers are losing - in most categories. Buyers are happy about low rates and low unemployment, but otherwise, all market metrics are working against them. Homeowners are winning - they are indifferent to most market shenanigans - but are glad home values are increasing. SELLER-BUYERS - If you will be a seller AND a buyer -- things may balance out -- you may benefit as a seller and struggle as a buyer. | |
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City Townhouses Are Selling QUICKLY! |
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 Townhouses in the City of Harrisonburg are selling QUICKLY! The "Days On Market" referenced above is the number of days between when a property is listed for sale and when it goes under contract. Just three years ago, the median days on market was 24 days - which means that half of the townhouses that sold went under contract in fewer than 24 days, and half took longer than 24 days. But now, the median days on market has dropped down to just FIVE days in 2020. Oftentimes, sellers of townhouses who want to buy a single family home are worried that they won't be able to sell their townhouse quickly enough to then make an offer on the house they want to purchase - this should be at least somewhat less of a concern now given the speed at which townhouses are going under contract! | |
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Home Sales Rise In County, Fall In City |
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 Home sales rose 8% in Rockingham County last year -- from 847 sales in 2018 up to 917 sales in 2019. This is the highest number of home sales we have seen in Rockingham County in at least the past six years. But in the City, it was a different story. Home sales declined 12% in the City of Harrisonburg in 2019, from 459 sales in 2018 down to only 403 sales in 2019. This is higher than some recent years, but the lowest number of homes ales in the past four years. A few more notes...
There are any number of factors that affect whether buyers end up buying in the City or County, including what type of property they are seeking, how much land they desires, school systems, employer locations, and much more. | |
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Apartments Instead of Condos on Boyers Road? |
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Cosner Investments LLC was successful in having Rockingham County rezone a 5-acre portion of a 10-acre parcel on Boyers Road to allow for the construction a four-condominium development with not more than 86 condos. Condos are properties that would be sold by the developer to individual homeowners. But now, the developer wants Rockingham County to allow the land to be used to build apartments instead -- and is asking for this change to take place without a public hearing. The developer states that investors could not be found for the condo development, so now he wants to build apartments. Apartments would all be owned by a single entity and would be rented to tenants. As stated, Cosner Investments recently asked the Board of Supervisors to waive the requirement for a public hearing, but the Board of Supervisors denied that request -- a public hearing will be required before the board decides whether to allow the developer to build apartments instead of condos. Read more from the Daily News Record from earlier this month... Read on for a reminder of some details of the condo community originally proposed by the developer. Here's where these condos (or apartments) would be located... Here is what the developer proposed as a site plan for the condo development... Here's what the buildings were to look like... "Specifically, Locust Grove Village will house no more than 86 individual condominiums containing a mixture of 1-, 2-, and 3-bedroom units. Units will be clustered into four buildings of 20-22 units apiece, with a majority of these units having a ‘townhouse' style and appearance. Building ‘corners' will be comprised of six condominium units served by a common entry and stairwell. Each pair of buildings will encircle a central green, with each townhouse-style condo having direct access through their own private courtyard. Half of the corner units will have balconies/courtyards that face the common green (interior), while the other half will face the exterior." "The central greens will be improved with tasteful landscaping (mixture of trees and shrubbery), paved walkways, a central gazebo, charcoal grills, and benches, intended to promote resident interaction and sense of community. If desired by residents, allowances will be made for community gardens, to be maintained by the residents themselves, and thereby promoting a sense of pride and ownership within the community. Pedestrian connectivity between the greens will be provided through walkways and a mid-block crosswalk through the parking area." | |
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Rockingham County School Redistricting Approved |
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 On January 27, 2020 the Rockingham County School Board approved the following redistricting decisions... 1. The South River Elementary School attendance area will be part of the East Rockingham High School attendance area beginning with the 2020/2021 school year. 2. Students who attend 5th grade at South River Elementary School will transition to 6th grade at Elkton Middle School, beginning with this year's 5th-grade class. 3. Students who currently attend Montevideo Middle School as 8th graders and live in the South River School District will transition to 9th grade at East Rockingham High School for the 2020/2021 school year (sibling exceptions below). There are quite a few grandfathering rules that affect these changes. Read all about it here... And more broadly... | |
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How Should The City Improve Parking in Downtown Harrisonburg? |
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 The City wants to know what YOU think about parking in the downtown area. They have developed a series of recommendations from a forum and more than 1000 survey responses. These recommendations include ideas such as:
The City wants to know how much YOU agree with the recommendations they are considering. Take the survey NOW (or before Feb 7, 2020) at the link below... | |
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Three Ways To Pay For Mortgage Insurance |
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 George Mason Mortgage has an excellent overview of the three main ways to pay for mortgage insurance. But before we go there, what is mortgage insurance? If your down payment is less than 20% of the purchase price, your lender may require that you pay for mortgage insurance to cover their greater risk because of your smaller down payment. Two quick points...
And now, the three main ways to pay for this mortgage insurance...
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Taking A Winter Photo To Prepare For Listing Your Home In The Spring |
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 Many sellers list their homes in the Spring or Summer, which is often ideal for the timing of their move, and aligns well with when most buyers are in the market. However -- some houses are very difficult to be seen (and photographed) in the Spring and Summer because of large trees in the front yard. So -- if you're thinking of selling this Spring or Summer, and you have trees (especially large house-obscuring trees) we should discuss taking some exterior photos SOON rather than waiting until later when we can't see your house at all. Certainly, the grass isn't as green as it could be right now, and the flowers aren't blooming -- but it could be nice to see your house in the main view of your future real estate listing -- rather than just a tree. I'm happy to come by to shoot a few photos of the front of your house this month to give us better options for marketing your home a few months from now. Just drop me a line (scott@hhtdy.com) so that we can coordinate the details. | |
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If Your Basement Wall Has A Crack You Should Definitely Buy A Crack Monitor |
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 Sometimes during a home inspection, I wish I had a time machine. We'll see a crack in a basement wall -- but we don't know how long it has been that way. The general logic often then goes like this...
Yes, I know, those are sweeping generalizations, but... Because we don't have a time machine, most buyers end up needing to assume that every crack in a basement wall falls into the first category -- recent, and continuing to shift or change, and needing immediate and expensive remediation. But what if today, you installed a crack monitor for your basement wall -- and monitored it quarterly for the next five years -- and then when you were selling your house you could provide documentation that the crack had not changed at all (hopefully) in five years of monitoring... That, my friends, would change the game for a home seller with a crack in their basement wall. So -- check your basement walls for cracks -- and if you have any, consider installing a crack monitor! The photo above is the CRACKMON 4020A Concrete Crack Monitor Kit, which includes three crack monitors and the epoxy adhesive to install them. You can purchase the set for $100 on Amazon and that $100 could be some of the best money you spend on preparing for the future sale of your home if a prospective buyer finds themselves fretting over your cracked basement wall in the future. | |
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Monthly Housing Cost for Median Priced Home Climbs Further in 2019 |
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 As should come as no surprise, the monthly cost of housing is increasing -- and has been increasing more quickly over the past several years (2018, 2019) as compared to many prior years. The graph above devises a monthly cost of housing using the median sales price of homes sold in Harrisonburg and Rockingham County and the mortgage interest rate at the time. The payments above assume that a buyer finances 80% of the purchase price at the prevailing rate -- and these housing costs include an estimate of real estate taxes and homeowners insurance. Of interest -- this monthly cost...
Over the next few years, it seems likely we will see a continuation of this trend, as sales prices and mortgage interest rates are both likely to continue to increase. | |
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Issues Affecting Harrisonburg in 2020 and Beyond |
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 Are you an engaged member of our local community, hoping to play your part in making it a better place to live, work and raise a family? If so, take a few minutes to read this excellent article over at The Citizen that explores 20 issues that will likely shape Harrisonburg in 2020 and for years to come... Here is a sampling of the topics that are discussed in the article...
I believe it is worth your time to read this article and get involved in the community discussions and decisions related to these issues. Read the article here... And -- do you enjoy depth of local reporting found at The Citizen? If so, two action items... | |
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50 Largest Employers in Harrisonburg Rockingham MSA |
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 Looking for a job? Or trying to understand the types of employment offered in the Harrisonburg and Rockingham County area? Below is a list of the 50 largest employers in the Harrisonburg Rockingham Metropolitan Statistical Area per the Virginia Employment Commission as of 2019-Q2. Highlights: Higher Education, Healthcare, Public Schools, Distribution, Poultry, Publishing, Hospitality, Manufacturing and more!
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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