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!
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The new 2010 real estate assessments are out and I thought it might be of interest to compare these new assessed values to the prices for which properties are actually selling.
Below are the 12 properties in the City of Harrisonburg shown as sold in the HRAR MLS between January 1, 2010 and February 14, 2010.
As you can see, some properties sold above AND some sold below assessed value. On average, these 12 properties sold for 90% of assessment, and the median ratio was 87%. If we assume that assessed values are a VERY GOOD INDICATOR of market value, this analysis could mean that:
If I didn't walk in too many circles there, tell me what you think!
With nearly 2 million page views on our company and agent web sites over the past year, we pay careful attention to trends in the number of people looking for properties for sale on our web sites.
As you can see above, more properties were viewed in January 2010 than in any month over the past 13 months. February being a short month, we may see a slight dip this month, but this trend likely indicates that our real estate market is headed in a more positive direction!
Join the crowd: Search for property now by clicking here!
I was forwarded an article from CNN Money that offers an interesting perspective on understanding how home values may perform in the coming year(s)....
"In normal times, people won't pay much less to lease a house than to own it. After all, if you're paying rent instead of a mortgage and taxes, you still get to enjoy the same rec room, chef's kitchen, and casita for visiting grandparents. So the surest sign of a frenzy appears when owning becomes far more expensive than renting. That's precisely what happened during the last bubble."
This make sense to me. If it costs the same amount to buy as it does to rent, then someone would almost certainly buy instead of renting.
"On average, DB [Deutsche Bank] found that families across America were spending about87% as much to rent as to own in 1999. Hence, they were traditionallywilling to pay a premium as homeowners, though not a big one."
As one rough estimate, let's consider that new two-story Harrisonburg townhomes were selling for around $100k in 2000 (monthly cost of $720 with 100% financing at 6.75% fixed), and were leasing for around $725/month. Thus, per my rough estimates, the leasing and buying costs were quite similar.
"But by mid-2006, with the craze in full swing, the figure fell below60%. At that point, Americans were spending an incredible 66% more toown than to rent."
In 2006, these same townhomes were selling for $150k (monthly cost of $980 with 100% financing at 5.75% fixed), and were leasing for around $900/month. Thus, Harrisonburg also saw a shift in renting being much more affordable, but not nearly as significantly as in some areas.
"So how did that happen? During the bubble, rents -- the real enginethat drives values -- were inching along at more or less their usualpace. From 1999 to 2007, apartment rents increased only 32%. But homeprices jumped more than three times as fast, around 105%."
Per my numbers above, rents increased 24% in Harrisonburg (compared to 32% in the national study), and home prices jumped 50% (compared to 105% in the national study).
"At the end of the third quarter of 2009, the overall number stood at83%, meaning renting was just a tad more attractive than owning."
Interesting -- these townhomes are now selling at roughly $155k (monthly cost of $940 with 100% financing at 5% fixed), and are leasing for around $900/month. Still virtually equivant.
"Given that analysis, it's likely that prices will fall another 5% or sonationwide. The drop could even be slightly greater. One reason: Rents,the force that govern housing prices, are still falling."
Nationally, rental rates seem to be falling, though that is not largely the case in Harrisonburg. If prices had increased more drastically here, then prices would probably be falling more drastically here, and rental rates would also be falling more drastically.
Yet again, the Harrisonburg and Rockingham County housing market seems to have performed, and be performing in a more healthy manner than much of the balance of the nation.
Or will they??
It's interesting, because most people assume that a LOT of sellers will be putting their homes on the market as we move into the spring and summer months. That is to some extent true --- look at the last two years of inventory levels (below) and you'll note that there are certainly more homes on the market between April and September than any other time of the year.
But wait --- the variation isn't actually very significant. The low inventory level has hovered around 800 for the past year, and the high around 940. While the spring/summer inventory levels are 17.5% higher than the fall/winter levels, here's how it translates into a buyer's perspective:
Furthermore, sellers ought not be overly concerned that they'll have dramatically more competition in the spring/summer months because of sky high inventory levels.
Click here or on the image below to view the full February 2010 Harrisonburg & Rockingham County Real Estate Market Report (PDF). Read on below for a few highlights.
As can be seen below, January 2010 sales (45) topped January 2009 sales (38). Furthermore, each of the preceding three months (Oct '09, Nov '09 and Dec '09) showed equal or greater home sales than the same month in 2008. Could it be that the pace of our local real estate market is finally picking up again?
As a further indicator, the graph below shows a running 12 months of home sales since 2004. The most recent data point shows Feb '09 through Jan '10, the data point prior shows Jan '09 through Dec '09, etc. Each data point includes every month of the year, allowing for a normalized look at the activity in our local housing market. As can be seen, this metric has been falling since 2006, but over the past several months seems to have stabilized and started to increase again.
Read more about our local housing market by downloading the full February 2010 Harrisonburg & Rockingham County Real Estate Market Report (PDF).
If you find the information in this report to be helpful....
Though 99% of the posts you'll find here are real estate related, I occasionally get sidetracked....
It's been over a year since I last mentioned TakeThemAMeal.com --- a free online tool used to coordinate the delivery of meals to someone who is in need.
Adina Bailey and I created this web site in December 2007, and since then we have been astonished at how usage of the site has increased all across the country -- to date, over 50,000 meals have been coordinated via TakeThemAMeal.com!
So....if you are ever coordinating meals for someone who is sick, has had a new baby, or has some other need for meals, you might want to check out www.TakeThemAMeal.com.
To learn a bit more about TakeThemAMeal.com . . . .
TakeThemAMeal.com on Facebook
My web site allows you to perform many search functions if you're looking for homes in Harrisonburg and Rockingham County, such as the New Listing Search, Quick Search, Community Search and Power Search.
Some time last year we added the ability to search in Shenandoah and Page Counties via the MRIS MLS System. You can now also search all listings in the Greater Augusta Assocation of Realtors MLS using the same intuitive search functions on my web site!
To access this new data set, just use the "Now Searching" drop down in the upper right corner of my web site when you're in the searching section.
A few days ago I compared the Harrisonburg and Rockingham County real estate market to our neighbors north, south and east of us. Now, let's see how we stack up to the state as a whole. The following data comes from the Virginia Association of Realtors 2009 year end market report.
As you can see above, home sales in Virginia (overall), have started picking back up again --- with a 2% increase between 2008 and 2009. Harrisonburg and Rockingham County witnessed another 13% drop in the number of home sales between 2008 and 2009.
This graph is rather interesting -- Virginia and Harrisonburg and Rockingham County both witnessed roughly a 5% decline between 2008 and 2009. Harrisonburg and Rockingham County, however, have seen rather level prices for the past several years while the Virginia median price has actually had a decent increase during that time frame.
Over at hburgnews I noticed a link to a new study from the Weldon Cooper Center indicating that the Harrisonburg / Rockingham County MSA has grown roughly 13% between 2000 and 2009. [ read more at hburgnews ]
Knowing that home sales have decreased during the same time period, I thought I'd see how the two data sets lined up. First, though, please note that:
This graph shows something (somewhat) similar --- a higher percentage (1.43%) of our population bought a home in 2005 than the percentage in 2000 (0.77%) and 2009 (0.66%).
As I ponder this data, I wonder what will be "normal" over the next 20 years as to what percentage of our population will buy a home in any given year. Is 0.77% the magic number (shown in 2000 and 2008)? If so, home sales were depressed in 2009 (how surprising). Or perhaps we should expect about 1% of our population to buy a home each year.
The most pressing question in my mind is when we will start to see an increase again in home sales --- both as a raw number, and as a percentage of the population. I thought we'd see in 2008 (we did not). I thought we'd see it in 2009 (we did not). I think the third time might be the charm, and we'll see home sales (quantity, not sales prices) increase in 2010. What do you think?
Also, another interesting way to look at the data above is as follows:
It is often helpful to put numbers in context. Each month I publish a report on the Harrisonburg and Rockingham County real estate market, but today I thought I'd try to put those sorts of local numbers in the context of our neighboring markets. The following data comes from the Virginia Association of Realtors 2009 year end market report.
First, let's take a look at how we compared to our neighboring markets as to the number of home sales this past year (2009) compared to the prior year (2008).
As you can see, the sum total of Virginia showed a 2% increase in the number of home sales. In comparison, Harrisonburg and Rockingham County aren't doing so well --- with a 13% decline in home sales. In fact, the markets north, south and east of our market have all shown a stronger performance as measured by the number of home sales.
But what about home values, or median sales prices, you might ask . . . .
This is the area where Harrisonburg and Rockingham County has done well --- hmmmmm --- or at least we haven't done as poorly as our neighboring markets, and the state as a whole. Our market saw a 4% decline in median sales price, in comparison to 9% for the state as a whole, a whopping 17% decline north of our market, and a 5% decline to the east.
This data is consistent with what I have been observing for the past several years --- home values are holding steadier in our market than in most areas, but home sales have been quite slow as a result.
Now, what shall we predict for 2010 and 2011??
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