Welcome! This blog tracks the real estate market in the Central Shenandoah Valley, featuring market data and analysis, an exploration of common buying and selling questions, and candid commentary on all things real estate.
If you are interested in discussing any of the topics on this blog, or the details of your specific real estate situation, call or e-mail me!
Construction is moving along steadily at Urban Exchange in downtown Harrisonburg. This exciting new mixed-use community will include 194 condos, two levels of structured parking, and approximately 12,000 square feet of retail space.
Over the past 16 months, we have been excited to see that people crossing nearly every demographic have interest in living at Urban Exchange. Those having committed to living at Urban Exchange span an age range of 20 to 80, and include retirees, young professionals, university faculty and staff, undergraduate and graduate students, families with children, employees of growing local companies such as Rosetta Stone, SRI, SI, RMH, and more.
Urban Exchange is comprised of two wings with approximately 100 condos in each, and when we broke ground in February 2008, we did so with the vision of selling the condos in the West Wing, and leasing them in the East Wing. This past week, however, we made the decision to lease all 194 condos instead of selling half of them --- primarily because of the significant changes in the condominium financing market that have taken place over the past 12 to 18 months.
The West Wing of Urban Exchange is comprised of 98 condos, and Fannie Mae and Freddie Mac guidelines dictate that 51% (soon to be 70%) of such condos must be owner-occupied in order for any purchaser to use a conventional mortgage for purchasing at Urban Exchange. Furthermore, Fannie Mae and Freddie Mac will not allow loans to close on any condos until 51% of the condos are reserved.
Given these guidelines, we knew that it would be difficult to orchestrate the sale of 70 condos nearly simultaneously, but we were determined to attempt to do so. Unfortunately, a few timing and logistical factors conspired against us:
Given the vast, early demand from tenants to live in Urban Exchange, and the delayed, hesitant demand from buyers --- last week we decided to move forward with leasing all of the condos at Urban Exchange.
We have discussed this change at length with all of the buyers who had reservations at Urban Exchange, but we know that there were quite a few other prospective buyers who had not yet committed to purchase. If you are one such person, and are still excited about the possibility of buying a condo in downtown Harrisonburg, we'd like to stay in touch with you.
The developers of Urban Exchange own several other properties in downtown Harrisonburg where they will be developing condos after Urban Exchange is complete. The next two projects that they will be developing will be considerably smaller than Urban Exchange (15-25 units) and thus will be much more feasible for condo sales. In approximately six months we will be starting to hold focus groups with any such interested downtown condo buyers, as we begin the design and planning stages of these next projects. If you would like to know when these focus groups begin, please click here.
Thank you for your continued support of and excitement for Urban Exchange --- while the decision to lease all of the condos marks a slight change in direction, it will still be bringing dynamic change to our downtown district. In just over a month, the first residents will be moving into Urban Exchange, and as the next few months unfold, we will be building up to over 300 new residents of downtown Harrisonburg in an exciting and diverse community at Urban Exchange
If you have any questions about this change in direction at Urban Exchange, please contact me (Scott Rogers, 540-578-0102, scott@LiveUE.com), and if you have interest in further details on leasing a condo at Urban Exchange please contact Mary Messerly (540-421-9341, mary@LiveUE.com).
I am asked this question quite frequently, often from buyers who are relocating to the Shenandoah Valley from other areas of the state or country. Since 2006, Harrisonburg and Rockingham County has not seen an increase or decrease in median home prices. This is in contrast to the nation (as a whole) and most metro areas around the country who have seen 20% to 40% declines in median home values during the same time period.
So....why aren't home values falling here in the Central Shenandoah Valley? Here are some factors that are certainly at play...
This is not to suggest that all homes have "held their value" over the past few years --- some homeowners have certainly seen declines, but any such declines are quite modest in comparison to most other real estate markets across the country.
Without a doubt, we're in a very challenging real estate market right now --- we've seen fewer and fewer home sales over the past several years. Thankfully, we haven't seen a significant decline in home values (as has been seen in most areas of the country) --- but it's still a difficult time to sell a home.
Amidst this, it's great to be working with seller clients who are dedicated to working hard to do everything possible to sell their home:
We've experienced several years of significant declines in sales activity in Harrisonburg and Rockingham County.
However, we (Coldwell Banker Funkhouser Realtors) continue to see a strong increase in the number of properties being viewed on our collection of (65) web sites. This is often a leading indicator of forthcoming sales activity.
So, I'll remain optimistic for the last 10 days of this month and see where we end up. So far this month there have been 45 home sales in our market, and last year during the same time period there were 46 home sales. Perhaps we'll catch up with last year this month, and then stay ahead or surge ahead!?
As a brief variation from my typical long and detailed analysis, here are two quick market observations...
We've all (hopefully) heard of the $8,000 tax credit for first time home buyers --- if you haven't owned a home in the past three years you can receive $8,000 if you buy one by November 30th of this year (6.5 months to go).
But yesterday, the HUD Secretary announced that the Federal Housing Administration is going to permit buyers to use the $8,000 tax credit as a downpayment!
More details will be forthcoming -- check with your lender in the coming weeks to see how this might work for your situation.
Construction at Urban Exchange is flying along quickly! In a mere 51 days, the first residents will be moving into these beautiful new condos in downtown Harrisonburg. Click on any of the photos below to view updated construction photos.
Find out more about Urban Exchange:
Read on for a full review of the state of the Harrisonburg and Rockingham County residential real estate market. Or....download the full report:
April 2009 Harrisonburg & Rockingham County Real Estate Market Report
Homes in Harrisonburg and Rockingham County are continuing to sell more slowly than in recent years -- when examining January 2009 - April 2009, we see a 29% decline compared to 2008. However, we continue to see median and average sales prices staying relatively level, with a 3% decline in median sales price and a 3% increase in average sales price. The homes that have sold this year took, on average, 21% longer to close than in 2008.
As with each of the past three years, we saw a decline in home sales as compared to last month (March). April 2009 home sales (50 sales) were 38% lower than April 28 (80 sales). We will likely start to see an increase in May, as we have each of the past three years. The important thing to note will be how quickly sales increase, and whether we will be able to match the 2008 sales pace.
This graph shows a normalized trend of home sales by charting the ongoing sum of the preceding 12 months' sales. We continue to see a decline in this metric, and likely will until the pace of sales stops its decline.
Some people have noticed an increase in activity in the real estate market, but it is likely simply an increase in homes for sale that they are noticing. These increasing inventory levels are not welcome news to sellers, as it continues to over saturate our market.
Unfortunately, the increased inventory of homes on the market over the past several months has not been matched by a corresponding increase in sales. Thus, the number of months of supply has started to increase again in all price ranges.
This graph captures all residential real estate activity as reflected in the Harrisonburg/Rockingham Multiple Listing Service. The 2009 year-to-date sales figures now include four months of sales data, and show only a slight decline in median sales prices. This is positive, however, the pace of sales continues to decline.
When examining only single family home sales in Harrisonburg and Rockingham County we see that the median sales price is holding steady as compared to last year and has not had a significant net increase or decrease since 2006. This is occurring despite a drastic reduction in sales pace between 2006 and 2009.
Sales of townhomes in Harrisonburg and Rockingham County continue to slow, and median prices have started to slip ever so slightly down to $156,500. This marks a median value slightly below the 2006 median value of $160,850, and is coupled by a continued decline in sales pace for townhomes.
Examining the median price per square foot of sold single family homes in Harrisonburg and Rockingham County shows that homes have started selling at a somewhat higher rate when examining their cost per functional space. We are now approaching mid-2005 levels, at $123 per square foot.
The chart above examines time on market for homes sold in Harrisonburg and Rockingham County during the past six months. Homes with the lowest price points are selling the quickest, and homes in the upper price ranges are taking the longest time to sell.
For example, overall only 10% of homes took longer than 1 year to sell, but 34% of homes selling over $400,000 took longer than a year to sell.
In contrast, only 10% of these homes over $400,000 sold in the first three months, while 39% of homes selling for less than $200,000 sold in the first three months of being on the market.
Download the full report here:
April 2009 Harrisonburg & Rockingham County Real Estate Market Report
Some of you think this, don't you? For the past month I have been discussing this topic (via e-mail) with a statistician at JMU, and it has been a very helpful dialogue (for me) as I've explored some new perspectives from which we can examine home values.
The statistician's hypothesis is that homes have increased so quickly in value here in Harrisonburg and Rockingham County, that they are now significantly overvalued and will need to decline by 30% - 50%. I started to explore this a few weeks ago in this article: Home Value Projections for Harrisonburg and Rockingham County.
But here's the latest...
Here's what we're seeing above:
Your Conclusion: Regardless of whether you are a statistician or someone who just barely understands the chart above, I'd love to hear your thoughts. What do you think of the data presented here? Do you think homes in our area are over-valued?
For those of you who just have to see the numbers....
When preparing to sell your house, bear in mind that the value of your house is not (necessarily):
click image above for printable (and legible) PDF
If you click on the analysis above, you'll see that I am comparing the property being evaluated to a set of recently sold properties and a set of currently available properties. (Or, that's what I was doing at the time --- this analysis is from 2008). The theory is this --- we can best understand what your property is worth by evaluating it in the context of very similar homes that have recently sold, as well as in the context of what is on the market today.
A few notes about this general market analysis I perform before putting properties on the market:
A few days ago I mentioned that lot sales in Harrisonburg and Rockingham County (of less than an acre) have slowed dramatically. In fact, the rate of such lots sales has fallen 82% since their peak in 2004.
Lane Chesley then asked about lot sales of over an acre, hypothesizing that such sales might not have fallen as much as those may be more desirable parcels. Let's take a look....
As you can see above (click the graph for a PDF) --- sales have also fallen rather dramatically of parcels larger than an acre, but Lane was correct in his assumption. Lot sales (larger than an acre) have only fallen 69% since their peak in 2005. Also of interest is that even though less than an acre lot sales slowed 25% between 2004 and 2005, lots sales greater than an acre increased 57% during the same time period.
Thus, buyers of smaller lots (likely in a subdivision) began pulling back in 2005, but it wasn't until 2006 that buyers of larger lots started pulling back.
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