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!
How exciting is a house showing? I guess it really depends....
1 in 16 odds aren't so great. Last week I showed a buyer client 16 homes in a day. I started to get the sense, as I called to set up appointments to show the homes, that each owner and their agent was thinking --- this might be IT, these might be THE BUYERS who are FINALLY going to like and buy this house. But the odds weren't good -- even if my buyer client does purchase one of these homes, we'll be disappointing 15 other sellers. As I was setting up the appointments, I was contemplating whether I should make that disclaimer to temper seller excitement.
The 76th showing is made less exciting by the lack of results of the first 75. Yesterday I showed one of my listings that has likely had 75 or more showings since it has been on the market. The price of the house has been reduced multiple times along the way, and the house offers a LOT of square footage for the money -- but for whatever reason, it is still for sale. While the home has been shown a LOT, it has only resulted in two offers (neither of which worked out), so the 76th showing doesn't mean altogether too much to the owners.
The first showing, especially if delayed, can mean so much. There are plenty of homes on the market that have been marketed for a month, three months, six months, and have never had a single showing. These sellers would be greatly satisfied just to have a single buyer come and express enough interest in their home to want to look inside. Again, the odds might be low that that first (delayed) buyer will actually do anything --- but the chances of a house selling without any showings at all is even lower.
So, when that phone rings, and a showing is requested on your home, what will you be thinking?
In all of last September (2009) there were 72 residential sales in Harrisonburg and Rockingham County.
Thus far, in the first 23 days of September 2010, there have only been 27 residential sales in Harrisonburg and Rockingham County.
The sky is falling! The sky is falling! But wait.....is it??
In all of last September (2009) we saw buyers sign contracts to purchase 52 residential properties in Harrisonburg and Rockingham County.
Thus far, in the first 23 days of September 2010, we have seen buyers sign contracts to purchase 59 residential properties in Harrisonburg and Rockingham County.
What, oh what, can we conclude? Perhaps only that we're still on the roller coaster ride of a not-yet-stabilized real estate market.
As reported by NPR, Columbia University recently conducted a study where they asked people about the most effective ways were to save energy --- and as a general public, we're well off the mark! From NPR....
CHIOTAKIS: So what the study found is when it comes to energy savings, we're all idiots?
HILL: Yeah, pretty much. Basically researchers asked people what one thing they could do that would be the most effective thing to save energy and people said turning off the lights.
CHIOTAKIS: Well that makes sense, what's wrong with that?
HILL: Well, turning off the lights and other curtailment activities, as researchers like to call them, may not save as much energy as we think. A better choice might be making efficiency improvements, like installing energy-efficient light bulbs or driving non-gas guzzlers.
CHIOTAKIS: So what are the things, Adriene, we do that we think save more energy than they actually save?
HILL: Well, so there's turning off the lights. There's driving slower on the highway -- maybe stepping it down to 55, people think that saves more energy than it actually does. Unplugging your phone charger -- again, these things do save energy, but not as much as people guess.
CHIOTAKIS: And what do we under-rate? What saves more than most people think they save?
HILL: Driving cars that get better mileage, using room air conditioners instead of central air, and running more efficient appliances.BUT WAIT! THERE'S GOOD NEWS . . .
This Saturday (September 25) from 9am to 4pm you can learn all about saving energy, and living sustainably at Harrisonburg's First Annual Green Expo.
Don't waste the next few months doing web searches and making phone calls to try to learn about improvements you could make to your home, or technologies or products you could use in a new home. This Saturday you can spend an hour or two going from booth to booth speaking directly to the experts! Take a look at the long list of companies that will be present!
Plus, you can learn a lot about these four notable speakers!
In an interesting e-mail dialogue about the current real estate market, I was offered this terrific insight...
"It seems to me that houses bought and sold in a "normal" market should have some average per capita value ... the factors which affect whether people buy or sell houses should be relatively similar from year to year (people moving in for new jobs, divorces, retirements, etc.) in non bubble years."
I couldn't agree more --- so let's run with that theory for a moment and see what we can learn.
The graph above shows the population for Harrisonburg and Rockingham County (source) compared to home sales per the HRAR MLS. You can see that while population has steadily increased over the past decade, home sales rose dramatically, and then fell dramatically. So....what if we took the per capita theory, and extrapolated from the year 2000....
This graph supposes that the number of home sales in 2000 compared to the total population in 2000 (0.77%) was the norm -- and then suggests what home sales would have been for each subsequent year -- still assuming they would be 0.77% of the population. You can see that home sales would have slowly increased just as the population did.
The graph above shows actual home sales (blue) compared to the theoretical 0.77% home sales --- what a difference in the peak years of 2004 through 2006! Per this theory, we're "behind" as of 2009 --- there should have been more home sales, given the population figure, and assuming that home sales will usually be 0.77% of the population.
To push the envelope a bit further, let's assume home sales should be 0.87% of the population. You see, in 2000 the per capita figure was 0.77%, but in 2001 it was 0.97%. If we split the difference, we have the graph above -- showing that last year the home sales were significantly below the norm.
What does this mean for the future? If we buy into the per capita theory, then last year's home sales are not the pattern the future. We won't always have about 800-ish home sales per year, and see a steady increase from that number. Instead, we are likely going to see a return (over the next year or two) to a sales level closer to around 1,000 home sales per year, which will then steadily increase as the population grows.
That is, of course, unless we see another market boom at some point in the future!
A lot of you might view properties online today --- only a few of you might close on a home sale today. That said, there often seems to be a correlation between the number of people viewing properties online, and the number of people closing on properties.
It makes sense --- if more people are going to buy a home, there will likely be more people looking at said homes online. Take a look at the interesting two year trends below. Not only do they mimic each other, but they are both headed up!
Now, I don't wear the rose colored glasses 24x7 --- I know we're not out of the woods yet. We still have super-high inventory levels, we haven't decidedly seen a turn of the tide in sales volume, and it will probably be another year or more before we see prices starting to stabilize. However, there are more and more indicators of late that we may be seeing a gradual change towards more positive times in the Harrisonburg and Rockingham County housing market.
Retirement doesn't come at age 55 for everyone -- and an increasing number of people are continuing to work past that age given the current economy and financial markets. Even after retirement, many people are looking for second careers, and U.S. News & Word Report recently (yesterday) ranked Harrisonburg as one of the ten best places to launch your second career. Click here to read the article.
Here's what they have to say about our area....
The centerpiece of this rural town is James Madison University and its 17,000 undergrads. It's hard to miss the purple-and-gold-clad students around town. Eastern Mennonite University is here as well.
Agriculture and JMU fuel the economy. Healthcare provider Centra Healthcare Solutions is also one of the region's major employers. Getting to Washington will take a two-hour drive, but Charlottesville (home of the University of Virginia) is just an hour away by car.
It's the area that surrounds Harrisonburg that often clinches the deal. The Blue Ridge Mountains, Skyline Drive, and the Shenandoah Valley, along with its namesake river, are a magnet for outdoor enthusiasts from skiers and spelunkers to hikers and kayakers. And the 1.8 million-acre George Washington and Jefferson National Forests extend along virtually the entire western edge of Virginia; Crabtree Falls Trail features one of the most impressive vertical-drop waterfalls east of the Mississippi River. Toss in the wineries and apple orchards tucked away on winding back-country roads, and it's an appealingly bucolic picture. Meanwhile, the downtown area is showing signs of new life, with an active farmers' market and a handful of hip coffee shops and ethnic restaurants.
A few observations....
The one thing I try to tell all of my seller clients is that the market is very unpredictable. It's impossible to know if a given house will sell in three months, six months, a year, or even longer. Most of this uncertainty is related to the vast number of homes for sale relative to the number of buyers in the market. It's hard to predict which houses buyers will actually choose.
But here is another unpredictable and turbulent market trend --- the sale of new-ish (circa 2000-2010) townhomes in the City of Harrisonburg.
What a roller coaster this year has been! Only a single sale in January and March, and only two in July!?!?! The dip in July is likely because of the original June 30th tax credit expiration --- but why were January and March so terribly low, with a strong February between them? Maybe there is always this much turbulence in the townhouse market? Let's take a look at last year....
Here you see some variation, but not the extreme ups and downs that the townhome market has experienced this year.
If you own a townhome and are trying to sell it, I suppose this coming month could be wonderful, or it could be terrible. Townhome buyers are coming in small bursts these days, and then disappearing again.
Last year, 816 homes sold in Harrisonburg and Rockingham County. Per my most recent market report, it seems probably that we'll be at the same pace in home sales for 2010. But follow me for a minute....
One last exciting statistic for your Monday --- last September, only 52 homes went under contract in the entire month. In the first half (less than half, really) of this September, 36 homes have already gone under contract!
Thanks Kemper, for pointing out last week's astounding buying pace!
As home values escalated between 2003 and 2006 in Harrisonburg and Rockingham County, buyers bought larger and larger homes!
The graph above shows the average size of single family homes sales per the Harrisonburg Rockingham Assocation of Realtors MLS. As can be seen, the average size of a single family home increased quite steadily between 2002 (1,698 square feet) through 2007 (2,162 square feet). That is a 27% increase in the average sized home!
Over the past few years, however, the size of the average home has decreased, all back down to 1,971 square feet thus far in 2010.
This is not a trend only taking place in the Shenandoah Valley. Read about it nationally at MSN: At annual builders' show, small is in.
When I show properties to my buyer clients, I give them a printout of the data sheet from the HRAR MLS with lots of pertinent information about the property for sale. This data sheet used to include a DAYS ON MARKET field that would show how long a property had been listed. No longer....
The data sheet doesn't really say CLASSIFIED --- but the entire field is now gone. The information is, however, on the Realtor version of the data sheet, which begs the question --- is this change solely to provide opportunities for small talk amongst shy buyers and timid Realtors? Here's the Realtor version of the same data sheet....
As it has been explained to me, the DAYS ON MARKET field was taken off the buyer data sheet for a few reasons:
Below are several highlights from the September 2010 Harrisonburg & Rockingham County Real Estate Market Report. Read on, or click here to download a PDF of the entire report.
Home sales in Harrisonburg and Rockingham County... Are they up? Down? Stable?
In fact, they are up, down AND stable! A mix of indicators this month:
Another good indicator, as shown above, is that the local housing inventory has peaked --- at least for now. A few months ago the number of homes for sale in Harrisonburg and Rockingham County broke 1,000 for the first time -- but it has now started to decline again, as is typical for this season of the year.
Lot sales (less than an acre) have been very, very slow over the past several years, falling from a peak in 2004 of 408 lot sales to only 58 lot sales last year. As shown above, lot sales might actually rebound this year!
There is even more in the 19-page September 2010 Harrisonburg & Rockingham County Real Estate Market Report. Download the entire report by clicking on the image below.
Thanks for reading, and if you have any questions, or if I can assist you with buying or selling real estate in Harrisonburg or Rockingham County, please contact me at 540-578-0102 or scott@HarrisonburgHousingToday.com.
First of all, I should point out that there are LOTS of homes on the market right now, so this blog post is not intended to broadly encourage anyone and everyone to put their house on the market. However....I have been asked several times in the past two weeks about whether it's really too late at this point to try to sell a house this fall. It seems that this assumption is based on:
On the second point, I haven't given up on 2010 yet. If the rest of the year is going to be quite slow, we should see it in the number of contracts being ratified. Here are the past four Augusts....
My full market report will be coming out in about a week after additional data is available. Stay tuned!
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