Inventory levels – the number of homes on the market for sale – are likely to continue to decline for the next few months.

Above you can see the monthly inventory levels in Harrisonburg and Rockingham County over the past seven years.

We typically see inventory levels declining at least through January or February.

Of note –– this doesn't mean that new listings won't be hitting the market over the next few months –– they will.

But there are likely to be fewer new listings and an equal or greater number of buyers, causing inventory levels to continue to decline.

We should then start to see an uptick in overall inventory levels when we enter the spring market in March or April.

If you are hoping to buy a home soon, you are likely to have fewer options than usual over the next few months.

If you are hoping to sell a home soon, you are likely to have less competition from other sellers than usual over the next few months.

 

Christmas is one week away... and mortgage interest rates seem to be dropping in anticipation of the holiday. ;–)

So... if you're looking for a last minute gift for a special someone... contract to buy them a house, lock in your mortgage interest rate, and my how appreciative they will be!

No, but really, mortgage interest rates have been all over the place over the past year... as high as 7.22% and as low as 6.08%.

They are currently on a downward trend back towards six and a half... though TBD if they'll stay there or keep dropping... for New Years!?

 

Most new construction townhouses in the Harrisonburg area are going under contract months before construction is complete.

Thus, would–be new construction townhouse buyers are finding they need to plan ahead... or they won't be buying a townhouse.

Buyers often start looking for homes a month or two before they need a place to live... since it usually takes a month or two to get from contract to closing.

But... not so on new construction.  The townhouses currently offered for sale at Congers Creek (as pictured above) are currently slated to be complete in May or June of this coming year.

So... if you are hoping to buy a new construction townhouse this coming spring or summer... you should be making those plans ASAP!

 

So –– there is no perfect rule for determining whether to round up or round down when counting the bedrooms in your house –– but will likely do you well to think about how many functional bedrooms most buyers would consider your house to have...

Happy Friday morning, friends!

It's hard to believe there are only 19 days remaining in 2024!  This year has flown by, and we'll soon be ringing in the New Year! 

Speaking of new beginnings, I'm excited to let you know about the latest news in our family – our son, Luke, is now also a Realtor!

Luke looks forward to helping individuals and families navigate the real estate market in the Harrisonburg and Rockingham County area and is also continuing his studies at JMU, pursuing a dual degree in Independent Scholars and Communication Studies with minors in Entrepreneurship and Honors Interdisciplinary Studies.

Check Luke out online here or drop him an email here.

In some other fun news, The Steel Wheels are hosting another Winter Roots concert in February at JMU's Wilson Hall.  You can find the details of the concert here, buy tickets here... and... enter to win a pair of free tickets here!

And now... after all that... let's hit the real estate data...

First up... look at those November home sales!?!  Last November there were only 72 home sales in Harrisonburg and Rockingham County... this November... 130 home sales!?!  This took me by surprise.  Even if we considered November 2023 to be a bit slower than normal, when we look back at November 2022 there were only 93 home sales... so this November was certainly a surprising surge of home sales for our market.

This surge of home sales in November lead to –– no surprise here –– continued improvement in how this year's home sales compare to last year.  We have now seen 12% more home sales this year than last in Harrisonburg and Rockingham County when looking at 11 months of data.  Of note... the 1,254 home sales seen thus far in 2024 is still quite a bit lower than the 1,482 home sales seen in the first 11 months of 2022.

And how about those prices?  The median sales price for all homes sold in 2024 in Harrisonburg and Rockingham County is now approaching $350,000... which is a 5% increase compared to the median of $330,000 seen last year.

Moving on to look at few sub–sections of the market, first let's see what's happening in the detached home market – which excludes townhouses, duplexes and condos...

The main metric I have highlighted above is the median sales price in 2024 compared to 2023.  A year ago the median sales prices of detached homes was $350,000... and we are now quickly approaching a median sales price of $400,000 in Harrisonburg and Rockingham County!  This marks an 11% increase in the median sales price in the course of a year.

Meanwhile, in the "attached homes" market –– which mainly includes townhouses but also duplexes and condos...

The median sales price is not climbing quite as quickly for townhouses, duplexes and condos... but that median sales price has eclipsed $300,000 for the first time in 2024.

We can also learn a bit more about the nuances of the local real estate market but breaking things down between the City of Harrisonburg and Rockingham County.  Here are the numbers for the City...

As you will note in the top half of the chart above... we have seen 9% fewer home sales in the City of Harrisonburg this year compared to last year... but as shown in the bottom half of the chart above... the median sales price has risen 5% to $295,000.

Let's compare these figures to Rockingham County... you'll find they are quite a bit different...

In contrast to the 9% decline in the number of City sales... we're seeing a 19% increase in the number of County sales –– though the median sales price in the County has increased by 5% over the past year, just as the City price has increased by 5%.

Slicing and dicing the data one more time, let's look at new home sales compared to existing (resale) home sales.  First up, new home sales...

My oh my how the new homes are being built, and are selling.  We have seen a 32% increase in the number of new homes that have sold in Harrisonburg and Rockingham Count this year (364) compared to last year (276) though – interestingly – we're right back to about the level (374) where we were two years ago.  The existence of newly built homes in our community continues to be a significant factor in our overall housing market.

And the existing home sales... did they increase by 32%  Nope...

We are seeing an increase in existing home sales (+5%) this year... but nowhere near the 32% increase seen in new homes.  This is not too surprising, as many homeowners simply do not want to sell their homes right now given the super low mortgage interest rates that many homeowners still have on their current mortgages.

Now, then, you made it past the charts... let's see what we can learn from some graphs showing the latest trends in our local market...

This graph (above) paints the picture more clearly than the chart of data earlier on –– the 130 home sales in November 2024 was unexpectedly high –– way higher than last November (72 sales) and also well above the average (112) of 2020 through 2023. 

But, remember, this high number of closed sales in November 2024 would have been the result of buyers (and sellers) signing contracts in September or October... since it takes some time to get from contract to closing.  Thus, we'll look ahead a bit further on in this report to see what contract activity took place in November 2024 to better predict home sales activity in December 2024.

But first, how is 2024 stacking up compared to prior years?

Home sales are on the rise again!  After declining in 2022 and 2023, we are now seeing an increase in the number of home sales taking place in Harrisonburg and Rockingham County.  The 1,254 home sales seen in the first 11 months of 2024 puts us 12% ahead of last year. 

Visualized differently, here's how the trajectory of home sales and home prices have changed over the past year...

After multiple years of 10% annual increases in the median sales price (only one year of that type of increase is pictured above) we are now seeing a more modest 5% increase in the median sales price over the past year in Harrisonburg and Rockingham County.  I think this is more likely to be what we see moving forward as well –– a 5% (ish) increase in prices over the course of a year.

Meanwhile, the number of homes selling has certainly rebounded over the past year... bottoming out around 1,206 annual home sales a year ago, and now back up to 1,339 annual home sales.

How does the current number of home sales compare to some past years, particularly pre–Covid?  Let's take a look...

Looking back to the pre–Covid days (2016–2019) we were seeing an average of about 1,300 home sales per year in Harrisonburg and Rockingham County.  

Then, Covid.  

During the pandemic and it's aftermath, which included super (super) low mortgage interest rates –– we saw the annual pace of home sales quickly climb above 1,400 then 1,500 then 1,600 to then crest at 1,673 in 2021.  But then, as mortgage interest rates rose (and home prices rose) the number of home sales fell rather quickly – back down to 1,206 in 2023. 

This year, however, with 1,254 home sales in the first 11 months, it seems likely we will get back to that 1,300–ish level by December 31.  So, maybe we are now back to the 1,300 home sales a year range, after having been quite far above it, and then a good bit below it.  Stay tuned in 2025 to see how this plays out.

Now, about that contract activity...

You can see it clearly here (above) that a crazy high number of contracts in October 2024 was what lead to the crazy high number of closed home sales in November 2024.  So what shall we expect over the next few months?  The 91 contracts signed in November 2024 was a normal–ish number of contracts for a November –– it was higher than the 78 we saw last year, but slightly lower than the 2020–2023 average of 97 contracts.  Thus, we should likely see around 80 – 95 home sales close in December 2024.

With all of those closings in November, are there still quite a few homes under contract right now?  Sort of, kind of...

Pending sales were higher than expected at the end of September and end of October... but perhaps unsurprisingly because of all of the closed sales in November... the pending sales count is lower at the end of November than we might have otherwise expected.  This is also an indicator that we'll see a bit of a slower month of closed sales in December and likely in January –– though this is somewhat to be expected in these winter months.

And inventory levels –– how do they compare to last year?

There are significantly fewer homes on the market now as compared to a year ago.  Last September through November we saw inventory levels of 206 to 230 homes for sale –– while we are seeing a more consistent 160 to 165 homes for sale during the same timeframe this year. 

Last year's higher inventory levels were mostly a result of rapidly increasing mortgage interest rates that slowed the market, causing inventory to start building. 

About those mortgage interest rates...

They've been up, they've been down, they've been all around!?!  Mortgage interest rates were steadily declining for quite a few months in the middle of 2024 (May – Aug) but they have now increased again, getting closer to 7%.  I think we will likely see mortgage interest rates continue to fluctuate between 6% and 7% over the course of the next year.  If you're waiting to buy until rates get below 6%, it might be a long wait.

Now, for a brief summary of the big picture and the latest trends in the Harrisonburg and Rockingham County real estate market...

[1]  We are seeing 12% more home sales this year than last.

[2]  The median sales price has increased by 5% over the past year.

[3]  Detached homes are increasing in value faster than attached homes.

[4]  We are seeing a decrease in City home sales and an increase in County home sales.

[5]  We are seeing a much larger year over year increase in new home sales than existing home sales.

[6]  Inventory levels remain relatively low.

[7]  Mortgage interest rates continue to stick between 6% and 7%.

So, as we prepare for 2025...

Home Buyers should connect with a great lender, get a preapproval letter in hand, and go see houses within the first few days that the hit the market.

Home Sellers should be realistic in the pricing of their homes given that prices are not increasing as quickly and mortgage interest rates are remaining quite high.

Homeowners who do not plan to sell should enjoy their home, their likely low mortgage interest rate, and enjoy not having to engage in what can be a hectic and/or stressful process of selling and buying a home.

As you think about YOUR year ahead, if it might include a housing transition (buying, selling, both) feel free to reach out so that we can chat about the market, the process, your hopes and dreams and so that I can know how to best support you in that potential move.  You can contact me most easily by phone/text at 540–578–0102 or by email here.

Until next year (!) have a wonderful remainder of 2024 – and I hope that you have the opportunity to spend some quality time over the next few weeks hanging out with, laughing with, having fun with, the people in your life who bring you joy!

 

It's easy to think, or say, that interest rates and home prices are the largest or main factors affecting whether sellers sell and buyers buy.

But... sometimes life events or life changes eclipse the impact of interest rates and home prices.

You are a new grandparent and you want to spend more time with your new grandbaby who lives eight hours away?  I'm not at all surprised that you plan to sell your home and move.

You have a new job opportunity with an exciting company in a city three hours away?  I'm not at all surprised that you plan to sell your home and move.

You are retiring in northern Virginia and your two kids both went to JMU and still live in Harrisonburg?  I'm not at all surprised that you plan to sell your current home and move to Harrisonburg.

There are lots and lots of life events or life changes that can cause a homeowner to all of a sudden be ready to sell... or can cause someone to all of a sudden be ready to buy.

These buyers and sellers that became such because of life events will still stop and consider interest rates and home prices... but the life event is typically what will actually cause them to decide to make a move.

 

When you think about buying your next home, think about the room or rooms in which you spend most of your time.

Some people spend most of their time in kitchen the kitchen or kitchen adjacent space.

Some people spend most of their time in the family room.

Some people spend most of their time in a sunroom.

Some people spend most of their time in a finished basement.

Some people spend most of their time in a home office.

Some people spend most of their time on a back patio or in the backyard.

Yes, and I know, most people spend time in lots of rooms... but which room is the primary room where you spend your time?

Once you have determined that number one room (or numbers one and two if you must) consider prioritizing how that space lives, feels and works when you evaluate homes you might purchase.

If you spend most of your time in the kitchen or kitchen spaces, then we shouldn't get too overly excited by the great home office and back patio that a home offers... as that is not where you spend most of your time.

Certainly, the patterns of how and where you spend most of your time might change in a new home, but make sure that the spaces in which you currently spend most of your time are going to be just as nice or nicer in your next home.

 

Wow!  I wasn't expecting this when I ran a few numbers on November home sales.

Last November... only 72 home sales.

This November... what!?!!?... 130 home sales.

More analysis of November (and year–to–date) home sales coming soon, but for now... this was a much busier November than we experienced last year.

By far.

 

Sometimes a house will have all of the spaces you're looking for (number of bedrooms, living room, family room, dining room, sunroom, office, etc., etc.) but sometimes... they will be in all the wrong places.

Yes, the home has a delightful primary bedroom suite... but it is on the upper level and you would really like for it to be on the main level.

Yes, the home has a dining room... but it is on the entirely opposite side of the house from the kitchen, which is not ideal.

Yes, the home has five bedrooms... but four of them are in the basement, and you want more main level bedrooms.

Yes, the home has both a living room and family room... but they are right next to each other, which makes it more challenging to have to groups socializing in the two spaces.

Yes, the home has a delightful office... but it is directly next to the playroom.

Yes, the home has a wonderful and renovated laundry room... but it is in the otherwise unfinished basement.

And on, and on, and on.

When we see a new listing of a house for sale we'll likely be able to discern what spaces that house will offer... but we often won't be able to determine if they are in the right places until we visit the house.

 

This is not the case for all houses, or all new listings, but... in the current market I'm often seeing two things happening...

Inventory levels are quite low right now, so plenty of buyers want to go see new listings if they are anywhere close to what a buyer might hope to purchase for their next home.  Low listing inventory results in lots of property showings.

But... home prices and mortgage interest rates are quite high right now, compared to where they have been over the past five years... so plenty of buyers who came to look at your house might decide not to make an offer.  Sometimes it just comes down to the numbers (your home price, current mortgage interest rates) and sometimes it's that the house is not "right enough" for the buyers.

So... hopefully you'll have plenty of showings of your home when it hits the market (this is likely) and hopefully you'll have lots of offers (this is less likely).

The market (buyers) responds differently to every home as it hits the market for sale, so don't take this as universal advice or insight across all price ranges, locations and property types.  For further insights on what you might experience if you list your home for sale, touch base and we can dive further into the more specific details of the sub–market for your home.

 

Only about a quarter of homes that are going under contract are doing so in three days or less.

And actually, only about half are going under contract within a week and a half... 11 days.

So, it's taking 12+ days for about half of homes to go under contract.

And it's taking 46+ days for about a quarter of homes to go under contract.

All that is to say, homes aren't going under contract quite as speedily as they were a year or two ago.

So, with some new listings – yes – you will need to make a decision (and potentially make an offer) very quickly – but not necessarily on most homes any longer.

 

Between 2016 and 2020 we were seeing around 150 to 200 new home sales per year, per the HRAR MLS.

But since 2021 we have been seeing upwards of 300 home sales per year in Harrisonburg and Rockingham County as recorded in the Harrisonburg Rockingham Association of Realtors Multiple Listing Service (HRAR MLS).

A few thoughts, notes and observations...

1.  These numbers do not include all new home sales, as some owners of lots or parcels of land hire builders to build them a home and these homes never show up as a new home sale in the HRAR MLS.

2.  Can you imagine how tight inventory levels would be in our market if these new homes had not been built?  Fewer homeowners have been willing to sell their home in recent years, but thankfully there has been an increase in the number of new homes being built.

3.  Pre–2021 the main regional / national builder in our marketplace was Evergreene Homes (Preston Lake) but since 2021 we have seen Ryan Homes and DR Horton join the mix.  These larger non–local builders have been significant contributors to these higher numbers of annual new home sales.

4.  Many new home developments are currently being built, or planned or proposed.  Higher interest rates have kept (at least temporarily) some builders and developers on the sidelines but we will still see quite a bit of new construction over the next few years.

In a growing area such as Harrisonburg and Rockingham County we will continue to see new home sales play a vital role in increasing housing options for people hoping to make this area their home.

 

The Rockingham County Planning Commission is reviewing a proposed rezoning of 6.63 acres on Port Republic Road, across from Hose Company Number 4, near the intersection of Port Republic Road and Boyers Road.

The developer is requesting that the 6.63 acre parcel that is currently zoned A–2 (General Agricultural) be rezoned to PMF (Planned Multi–Family) to allow for the construction of 68 townhome units.  The developer would seemingly plan to develop these over a two year timeframe with no more than 34 building permits being issued in any rolling 12–month period.

Here is the planned site layout...

You can download the full rezoning application and supporting documents here.

Current plans call for Planning Commission to review the request today (12/3/2024) and for the Board of Supervisors to review the request next month (1/8/2025).

 

Preparing your home to sell takes time, for most. 

Perhaps your home is neat and organized and show ready and we could take photos tomorrow to list your home for sale –– but this isn't the case for most homeowners.

There will likely be a few small projects you will want to take care of before putting your house on the market... and you will likely need to do a bit of decluttering... and you might need to remove some items from counters, cupboards, closets and more to have your home show best.

If you plan to sell your home this coming spring, but wait until spring to start on the projects –– it will likely seem overwhelming.

If you plan to sell this coming spring, to downsize, or move to a retirement community or to move to be close to the kiddos, or to get a bit more space, or for any other reason –– let's talk now about what you can be doing over the next few months to prepare your home to sell.

It will be a much more relaxing process if you start making small steps in the right direction now or soon –– rather than waiting until early spring to begin.

 

With most proposed new housing developments including apartments and townhouses these days –– and far fewer including detached homes –– some wonder whether we will continue to see fewer and fewer new detached homes built in future years.

Above you'll see how things shook out in 2023 and 2024.

Last year, 59% of new homes that were sold via the HRAR MLS were detached homes... more than half of the total.

This year, only 48% of new homes that sold via the HRAR MLS were detached homes.

I think there is a good chance that this trend –– a shift away from detached homes, towards attached homes –– will continue in new construction in this area over the next few years.

With fewer homeowners looking to sell their homes and buy another, often because of their low mortgage interest rates on their current mortgage... some such homeowners may be wondering how much it is reasonable to spend on renovating their home.

Here's one potential guideline to consider... and I'd like your feedback on it...

Consider spending no more than 15% to 20% of your home value on renovations... knowing that you will likely only increase your home value by no more than 10% by making such renovations.

Let's run a few examples...

$400K home... consider spending no more than $60K to $80K on renovations... knowing that you will likely only increase your home value by no more than $40K by doing so.

$600K home... consider spending no more than $90K to $120K on renovations... knowing that you will likely only increase your home value by no more than $60K by doing so.

Multiple thoughts run through my mind, and may run through your mind, when considering these examples...

1.  Where am I going to get $60K or $80K or $90K or $120K to make these renovations?  Yes, a good point.  These are intended to be theoretical maximum renovation budgets... but that doesn't necessarily mean you have those sort of funds on hand to make the improvements.  The renovations that many homeowners make will be bounded by their overall financial picture, more than these hypothetical guidelines.

2. Why will your home value only go up by $40K if I spend $40K to $80K?  Most renovation projects have a less than 100% return on the dollars you spend on that project.  Renovating an older kitchen into a brand new kitchen will increase your home's value, but likely by an amount that is less than the total cost of your renovation.

3.  Should I just sell my home and buy a new one instead of renovating?  Probably not.  When you consider the cost of selling, the cost of buying, the cost of moving, the cost of any improvements on the new house, and the change in mortgage payment based on current mortgage interest rates... most homeowners are better off staying and renovating rather than selling and then buying.

If you want to dial in a bit further on what your numbers could or would or should look like relative to your current home value, how much you might spend on renovations and a post renovation value, just let me know.

 

It has become increasingly difficult to purchase a detached home in the City of Harrisonburg... because there simply aren't as many sellers selling right now.

Three years ago (2021) there were 253 detached homes sales in the City.

In 2022 that dropped to 214 sales.

In 2023 that dropped to 155 sales.

Thus far in 2024, there have only been 132 detached home sales.

Why aren't more City homeowners selling their homes?

1.  Many have super low mortgage interest rates, and thus super low monthly housing costs, and wouldn't want to trade that in for much higher housing costs given current mortgage interest rates.

2.  While many homeowners have plenty of equity and sell for a very delightful sales price... they would also have to pay a rather steep price for a replacement home if they want to stay in the City.

3.  For anyone hoping to stay in the City, it's a vicious cycle... won't sell because what would I buy... which keeps my house off the market... which means there are fewer homes for anyone else to buy, etc., etc.

So, if you hope to buy a detached home in the City of Harrisonburg, you may very well have a longer wait than you'd like, you may have more competition from other buyers than you'd like, and you will probably pay a higher price than you'd like to pay.

 

For quite a while now, we've been operating in a market where nearly everything sells at or over the asking price, sometimes with multiple offers.

Thus, many buyers assume a seller will only sell for the asking price and it isn't worth making an offer below the asking price.

Sometimes this is, indeed, the case –– especially in the first few weeks that a house is on the market. At this stage, home sellers are typically still rather confident and/or hopeful that their asking price is appropriate for the market.

But after a house has been on the market for a few weeks, what's the downside of a buyer making an offer below the asking price? 

When a buyer views a house that has been on the market for a few weeks, and they don't like it enough to pay the list price... they often just move on and decide not to make an offer.

I think many buyers should, instead, consider what price they WOULD pay for the house.

If you like a house, but just not at the current offering price –– make an offer of the price you would be willing to pay for the house.  Who knows, the seller might surprise you, and might be willing to negotiate to a price that would work for them and for you!

 

I'd like to buy that house, over there...

Well, that's great, but... it's not for sale!  :–)

With some regularity, I'll be chatting with a buyer who describes what they want to buy... and we find that there is nothing on the market that matches their interests.

Sometimes we will go a step further and look to see if something similar has sold in the past year... and sometimes we will again find that nothing has sold that matches their interests.

But... this doesn't mean that the house they want to buy doesn't exist... it just means that it is not for sale and has not been for sale recently.

As you might imagine, this can be frustrating for said buyer... who really wants to buy a house like ___ or in ___ neighborhood... but finds that nobody is selling such a house or a house in such a location.

What, then, should you do if this describes your home search?  

Three main options exist...

1.  Continue to patiently (?) wait for such a home to come on the market.

2.  Compromise somewhat on the overall vision for your next home and buy something that is close to what you want, but not spot on.

3.  Start knocking on doors of homes you think you'd like to buy to see if you can talk a homeowner into selling. 

 

The most active price range for home sales in the City of Harrisonburg is... the $200K to $300K price range.

But this might be more than just what buyers are buying...

1.  The housing stock (what homes exist in the City) also impacts what is sold, and thus, what buyers can buy.

2.  The houses that homeowners in the City are willing to sell also impacts what is old, and thus, what buyers can buy.

An interesting unknown is whether home buyers would buy $500K+ or $600K+ or $700K+ homes in the City of Harrisonburg if more such homes existed.

Quarry Heights may help to answer that question as they plan to build $500K+ detached homes and $600K+ attached villas.