Come October 1, 2011 the loan limits for FHA mortgages will be reduced in many parts of the country.  Some would have you believe this will be disastrous for the housing market....



But will there really be that much of an impact on the housing market because of these new loan limits?   Alan Zibel at the Wall Street Journal explores this, wondering whether the changes really matter....



Beyond the possibility that these changes might not even matter much nationally, it's also important to note that....

• Only 2% of FHA borrowers in Virginia would be affected.  Of the 39,055 FHA loans issued during 2010, only 909 of these loans (2%) would no longer be issued based on adjusted loan limits in various areas in Virginia.  (source)
    
  
• The FHA loan limits are not changing in Harrisonburg and Rockingham County.  The current FHA loan limit for Harrisonburg and Rockingham County is $277,150 for a single family home.

Look up the loan limits in your local area by clicking here.
 

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Thus far, September is looking good, with 38% more home sales than last year!



Re-read last month's report if you missed it, and know that we have more positive data in September to continue what appears to be a stabilization of the market.
 

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While you can find any property listed for sale (via the MLS) all in one place, it's not quite as easy to find rental properties.  Here are some web sites to be checking if you are looking for a rental property in Harrisonburg or Rockingham County:


HarrisonburgRentalProperties.com
 

Harrisonburg Craigslist
 

Daily News Record
 

HarrisonburgHousing.com
 

RinerRentals.com
 

Mountain Valley Management


RentalMatchup.com

If you're still having trouble finding a rental after exploring these sites, let me know, and I can ask around to see what else I can find for you.
 

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Please bear in mind, this is not related to the price of any homes currently on the market.  It is, however, a reminder that if you are motivated as a seller that it is important that such a motivation carry over into your pricing as well.
  

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Apparently a lot of people go to bed at 11PM....



Click on the image above for a fun, interactive infographic from Trulia exploring when people are online searching for homes.
 

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The following three features or attributes of a home are wonderful to have in a house, but I believe there is a disconnect between how much buyers want these things, and how much they they use them.



For many buyers, a whirlpool tub in the master bathroom is a must!  But I hear from a lot of sellers that they never used their whirlpool tub. 




Buyers are always impressed if the windows in a home can be tilted in to be cleaned.  But sellers often admit that they rarely (if ever) actually took advantage of that easy opportunity for cleaning.




If a backyard has a bit of slope to it, buyers start to shy away from it, longing for a perfectly level backyard for endless hours of sporting fun with their children.  But as a seller pointed out to me yesterday, they rarely see children outside in their neighborhood taking advantage of such a yard.

What do you think?  Are these three items essentials?  Are they overrated?  What else captivates a buyer's attention when they are buying a house, and then is quickly forgotten or taken for granted once they own the house?
  

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Frank is renting a townhome in Avalon Woods, and is paying $875 per month for the privilege to do so.  He has thought about buying a home, but assumes he'd have to pay quite a bit more per month.

Well, maybe not!  If Frank were to buy a townhome in Avalon Woods (or Liberty Square, Beacon Hill, Harmony Heights, etc) he might pay around $140,000 for the townhouse --- or even less!

Assuming $140,000, here is an illustration of what Frank's mortgage payment might look like, with a ridiculously low rate of 3.875% (which one of my clients was quoted yesterday)....



Frank will still have to pay $40/month for the Property Owners Association on top of this mortgage payment, but his monthly housing cost is now going to be $775.

Wait a minute.......Frank is going to move from paying $875 in rent to paying $775 for a mortgage payment?  How could this be?

• extraordinarily low interest rates
• more townhouse sellers than buyers, driving prices down

The great news here is that if Frank decides he wants to move on after five years, he would have a fantastic opportunity to keep the townhouse and rent it.  After all, his monthly payment will still be right around $775, and his rental income will probably have increased to $900 or $925.

What are you waiting for?  If you're a potential first time buyer, let's talk through your situation to see if a home purchase might fit into your short term (housing) and long term (investment) plans.
  

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Sometimes it can be helpful to see how all of the Harrisonburg townhouse communities are arranged relative to each other and relative to other points of interest such as JMU and EMU.  Here's a map I created to show all (or most) of the townhouses in and around Harrisonburg.  Click on the map for a large version (3MB) that prints well on 11" x 17" paper.

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Perhaps it doesn't always happen with such extreme price variations, but certainly you have had a seller who priced their home very competitively and then was shocked by an extremely low offer brought from someone locally.
 

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How low can they go?  Mortgage interest rates (on 30-year fixed rate mortgages) dropped again yesterday per Freddie Mac's Primary Mortgage Market Survey.  The national average for a 30-year fixed rate mortgage is now 4.12%.  Wow!

If you're planning to buy sometime in the next few months, now would be a GREAT time to lock in a mortgage interest rate!
 

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After five years of a declining pace of home sales in Harrisonburg and Rockingham County it appears that the local housing market may finally be stabilizing.  The latest market data shows a mix of both positive and negative indicators, but the positive signs that have emerged over the past several months seem to be sticking around.  Cut to the chase and download a PDF of my entire market report (PDF) or keep reading for a summary of what you need to know.



A few notes from the summary chart above:

1. August 2011 was another strong month of home sales, with 27% more sales than last August. 
   
2. The pace of year-to-date home sales is only down 2% compared to 2010.  Just a month ago, this year-to-date comparison showed a 6% decline in the pace of sales, so we're catching up.
3. Looking only at August sales (2010, 2011), median sales prices increased an astonishing 15%.
4. The year-to-date median sales price has only declined 4% since a year ago.  Just a month ago, this year-to-date comparison showed a 7% decline in median sales prices, so we're catching up.
5. Home sold much more quickly (+14%) in August 2011 as compared to August 2010.

Strong buyer activity continued through August 2011, with a 43% increase in contracts between August 2010 and August 2011, as well as a 13% increase when comparing January through August of 2010 and 2011.  This strong buyer activity will lead to continued strength in the pace of home sales over the next several months.

Three things we're excited to see decline:

• The foreclosure rate continues to decline in Harrisonburg and Rockignham County.
• Unemployment declined in July 2011 in Harrisonburg and Rockingham County
• Mortgage interest rates declined again in August 2011 to 4.2%
  

And things might even be starting to improve in the way of land sales.



Land sales of over an acre are on the rise, both in the pace of sales as well as in the median price per acre.  This is a welcome sign for the land market, as sales were quite slow last year.

For an even more in-depth look at the Harrisonburg and Rockingham County real estate market, click the image below to download my full report as a PDF.


If you have questions about the report, or if I can be of assistance to you with real estate that you own, or that you'd like to own, please be in touch.  You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com. 
 

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Buyers at Founders Way will currently receive these great promos from the builder:

• $3,500 seller paid closing cost credit
  
• $3,000 towards upgrades or closing costs
  
• free upgrade to granite countertops in the kitchen
• one year of builder-paid condo association dues
  

Plus, you get all of this while buying a unique, beautiful, brand new condo with an open floor plan and exciting architectural features! 

Buyers at Founders Way are often attracted to:

• brand new one-level living at a low price point
• all exterior and grounds maintenance is performed by the condo association
• high speed internet and expansive cable package at a low cost through the condo association
• open floor plan (some with lofts) that provide a very different feel than a two-story townhome

Find out more about Founders Way:

• Visit the Founders Way web site 
• View photos of Founders Way
• View floor plans at Founders Way
• Come visit us on Saturday or Sunday between 1PM and 3PM
• Call me at 540-578-0102 or e-mail me

Full Disclosure:  I represent the Scripture Communities, the builder/developer of Founders Way.
 

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Everyone knows, the summer is the busiest sales season -- but how does the rest of the year compare?  And is it reasonable to list a home for sale now (in the Fall) or should homeowners wait for Spring?



The graph above shows the percentage of homes that go under contract each month through the year.  Thus, if 1000 homes were available for sale in January, we could expect that 6.9% of them (69) might go under contract that month.

The red line running through the graph shows the average -- on average, 7.7% of available homes go under contract each month in this area.  Thus, the "better than average" months to have your home on the market are March through July.  But....does that mean that homeowners who didn't sell in those months should give up until the following March?  I say no.....

First, on average, 423 homes will go under contract in those better-than-average months of March through July.  But an additional 405 homes will go under contract in the remaining worse-than-average months of the year of August through February.

Second, other than November (6.2%) and December (5.5%) all of the other months show roughly 7% of homes going under contract --- a mere 0.7% lower than the average of 7.7%.

So, homeowners, you need not be depressed from now until next March when the buyers come back out of hibernation.  There will continue to be buyers in the market even if we are currently in the not-quite-so-active months of the market.
 

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Scripture Communities is breaking ground on yet another new home at Heritage Estates, after having finished a single family home earlier this summer. 

We're delighted to have Don and Eva joining the community at Heritage Estates, and Brant has been fantastic to work with in his representation of his clients.

Heritage Estates is an active adult community located in Harrisonburg, Virginia. Heritage Estates boasts superb French Country architecture with flowing interior floor plans that are wonderful for entertaining. You'll also enjoy spectacular views of the Blue Ridge Mountains, the golf course immediately beside Heritage Estates, the community swimming pool, and a maintenance-free lifestyle.
 

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August was another strong month of contracts....



Contracts year-to-date are also still quite strong!



Stay tuned for my full market report next week --- could this finally be the year when home sales stop declining in Harrisonburg and Rockingham County?
 

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