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!
Dawn at Heritage Estates, December 2016
Only a select few building lots remain at Heritage Estates, an active adult (55+) community located on the West side of Harrisonburg on Garbers Church Road.
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.
Check out the remaining building lots here -- each grouping offering a slightly different vantage point on the community, the pool, the mountains, etc.
For more information on Heritage Estates, visit HeritageEstates.us or email me to set up a time to meet at the model home.
We saw a surge in home sales back in 2003-2005 (and beyond) with a 26% increase in the pace of sales in a two year period. Let's see how that compares to more recent years....
As shown above, if we finish out 2016 with 1300 home sales (which seems likely) we will have seen a (somewhat) similar surge in home sales with a 20% increase over a two year period.
Hmmmm --- should we be worried? After the real estate boom of the early 2000's, we saw a significant bust.
Let's look further....
As shown above, between 2003 and 2005, home prices were increasing RAPIDLY -- with a 33% increase in a two year period. This, it turned out (surprise, surprise) was NOT sustainable. Family income was not increasing by 33% in that same two year period, so families (and individuals) were spending a greater and greater share of their income on housing. This rapid increase in prices was a large contributing factor to why prices (and the pace of sales) then started to decline in 2007 +/-.
So, are we seeing that same rapid run up in prices?
And --- no! Which is GOOD news! We have only seen a 8% increase in the median sales price over the past two years, which I believe means that the recent increase in the pace of sales is not an indicator that this is a boom that will be followed by a bust.
What's your take on this data? Email me at scott@HarrisonburgHousingToday.com with your thoughts or questions.
Some folks would look at home sales over the past seven years (shown above) and comment that home sales are increasing at a very fast pace -- showing a 52% increase since 2010 -- or around 9% per year. Of note -- this is not even including December 2016 home sales, so the rate of increase would be even a bit higher.
Others would look at home sales over the past 16 years (shown above) and comment that home sales have only had a small net increase over time -- and that the increases we have seen over the past seven years have been catching us back up to a normal amount of buyers buying in any given year.
I tend to fall into the second group.
I believe that a "normal" (or "typical"?) number of buyers were buying in 2001/2002 -- and that we started to see the housing boom (loose lending standards, irrational buying craze) starting in 2003. If that is the case, then we have barely seen a net increase between 2001/2002 and 2016.
If we round this year (2016) up to 1300 home sales (to include December), and we average 2001/2002 to come up with 1112 home sales, then we have seen a 17% increase in sales over the past 14 years -- or an average of a 1.2% increase per year.
Then, let's put it in the context of population growth....
2001 Population Estimates per the Weldon Cooper Center....
2015 Population Estimates per the Weldon Cooper Center....
As shown above, we've seen a 20.7% increase in population in this 14 years timespan, or an average of 1.5% per year.
So, in a 14 year timespan, we've seen a 1.5% average annual increase in population as well as a 1.2% average annual increase in home sales. That seems to be a reasonable growth in home sales -- perhaps even with some further upside potential for further increases.
As such, if we do see 1300 home sales this year, I think we are likely to see at least the same number next year.
Just after the election, mortgage interest rates started rising. They started around 3.5%, and have since climbed to somewhere between 4.25% and 4.3%. It seems unlikely that they will come back own anytime soon -- if ever.
So, what do these new mortgage interest rates mean for home buyers? Well, higher mortgage payments, naturally. The graph above shows the potential change in a monthly mortgage payment for a median priced home ($190K) as well as a home priced at $250K and $350K. The payment scenarios above assume that you are financing 80% of the purchase price -- and yes, I know, plenty of folks are really financing 90% or 95% of the purchase price. If you are financing a greater portion of the purchase price, the monthly payment will be higher, and the increase in the monthly payment will be greater.
As you can see above.....
As always -- for actual payment scenarios, you'll need to consult a mortgage lender. Shoot me an email (scott@HarrisonburgHousingToday.com) and I can make some recommendations.
I thought we might actually see more change in these figures over time than we do see when looking at the data. The graph above shows the percentage of buyers (for this year and the three prior years) who purchase in each of the four main price ranges that I analyze each month.
A few observations....
Learn more about this month's featured property: 130 Bedford Place
I just published my monthly report on the Harrisonburg and Rockingham County real estate market. Jump to the full online market report, download the PDF, or read on for highlights....
First, let's take a look at the overall market performance in November....
As shown above, it was a very strong month of sales performance in November. Here are a few highlights....
As shown above, nothing about November was normal. After a slow and disappointing month of October home sales (97) home sales shot up to 111 in November, which far exceeds the number of sales seen in each of the past three months of November. When we combine October and November sales, there were 208 sales in 2016, which still exceeds the October-November sales in each of the past three years, when we saw 184 sales in 2015, 180 sales in 2014, and 157 sales in 2013.
So, how is the overall year doing compared to previous years....
We have already seen more home sales in the first eleven months of 2016 than we saw in the full year of 2013, 2014 and 2015. At this point, we seem likely to finish out 2016 with more than 1,300 home sales!
The graph above looks at a rolling 12-month window of sales data, showing the slow and steady progress we have made climbing to almost 1300 sales per year, and increasing (very recently) to a median sales price of $190,000. As demand increases (more buyers) prices start to increase if there is not more supply (more sellers) to meet that demand.
Speaking of the supply of homes for sale....
As mentioned above, increased demand (buyers) without increased supply (sellers) leads to increases in prices. Well, as shown directly above, we have certainly not been seeing an increasing supply of homes for sale -- in fact, we have seen a 27% decline in home sellers over the past year! To meet the increasing supply, we need more current homeowners to be selling, as well as more new construction to take place.
And -- guess what -- home sales are not likely to slow down much in December 2016, based on the 93 contracts signed during November 2016 -- which marks a 33% increase over the 70 contracts signed in November 2015.
OK, there is plenty more to explore, such as....
And -- as is always my encouragement -- if you will be buying or selling a home in the near future, start learning about our local housing market sooner rather than later! Being informed will allow you to make better real estate decisions.
The City of Harrisonburg School Board has approved the redistricting plan for the City elementary and middle schools to go into effect this coming (2017-18) school year. The final public hearing took place this past Tuesday, and no members of the public spoke to provide any additional feedback about any further recommended changes.
Some excerpts from today's Daily News Record....
Read the full DNR article here.
We have established that there aren't many homes for sale right now, but the under $200K market has seen some of the largest changes in inventory levels.
As shown above, the 194 homes for sale under $200K right now marks a 38% decline over the 314 homes that were sale at this same time one year ago.
I think we need to see some further new construction under $200K (and in some other price ranges) to help with these low inventory levels. Re-sale homes alone are not going to cure declining inventory levels.
I know, I know, it's cold, you aren't thinking about being outside listening to great music and camping overnight -- but wait -- you should be! As of this morning (10AM) early bird tickets are now on sale for the Red Wing Roots Music Festival to be held on July 14 - 16, 2016 at Natural Chimneys.
It is definitely a highlight of our family's summer -- and I encourage you to make it a tradition in your summer as well.
Click here to go buy your early bird tickets via Eventbrite.
In some ways, NO, you should NOT take your house off the market -- because there is a historically LOW number of homes for sale right now.
And yet, still, some folks will take their homes off the market for the winter. Our local MLS requires a house to be off the market for 90 days before the "Cumulative Days on Market" statistic resets. So, if you take your house off the market today, you could put it back on the market on the first Monday in March (March 6, 2017) and have that statistic reset.
During these 90-ish days of being off the market, we will want to talk about price, condition and marketing....
Here's a bit of a sneak peak at my upcoming market report which will be published next week. The graph above shows the number of contracts signed per month over the past two years. As you can see, there were 91 contracts signed this November -- as compared to only 70 and 77 in the two previous Novembers.
This bodes well for continued strong sales (closings) into December 2016.
The Rockingham County Planning Commission will consider a request on Tuesday for a further revision of the Preston Lake master plan.
The most recently approved master plan showed one large 168-unit apartment building, and the new master plan will include 12 smaller apartment buildings, presumably with 14 apartments per building.
Rockingham County is not required to hold a public hearing to obtain input from nearby residents because the changing the overall density of the community. Here's why....
This is the affected portion of the master plan before the proposed change....
And here is the same section after the proposed change....
If approved, the updated composition of Preston Lake will be as follows....
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