Archive for May 2024
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Harrisonburg City Council Approves Increase In Real Estate Tax Rate |
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 The real estate tax rate in the City of Harrisonburg will be increasing again for the 2024-25 fiscal year... rising $0.05 to $1.01 per $100 of assessed value. This is the fourth year in a row that the City of Harrisonburg has increased the real estate tax rate...
You can read a good bit more about the decision, rationale and citizen comments over at The Citizen... As you likely realize, we have also seen a rather significant increase in home values during the five year period referenced above, which further increases the property tax bill for city property owners. | |
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Almost All Houses Look Better Online Than In Person |
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 This isn't a secret to anyone who has bought a home in the past 10+ years... Almost All Houses Look Better Online Than In Person Real estate photographers do an EXCELLENT job at making each home look absolutely fantastic! Some of it is in the lighting, some in the angles, some in the cropping, some in the post production... but real estate photographers can make almost any house look better online than in person. That's not a criticism of real estate photographers (certainly!) and it is not a criticism of all those houses that in reality don't look quite as pristine as they did in the photos online. It is just a reality that home buyers should be aware of when clicking through photos of new listings, imagining that the house is 110% as wonderful as the amazing photos make it appear. I am merely pointing out the importance of seeing a house in person to be able to take in... [1] the condition of the walls and floors that photos don't show in great detail [2] the parts of the house that weren't as prominently displayed in the photos [3] the lot characteristics or surrounding properties that weren't highlighted Don't get me wrong... I want you to LOVE each house in person just as much as you did when you viewed it online... but once we start looking at a few you may notice that the photos REALLY made it shine, perhaps a bit more than it does in reality. And, just to flip things completely upside down for a moment... every once in a while I do still come across a house that looks much better in person than in the photos... which makes me wonder why the photos look as they do. Photos matter in real estate marketing... a lot... but buyers will almost always be making their decision when walking through the house and experiencing it in person. | |
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Make The Strongest Offer You Are Comfortable Making And Acknowledge All The Possible Outcomes |
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 The market is still moving along pretty quickly in many price ranges. This often results in multiple offer scenarios, where you are making an offer and will be competing against one or more other buyers who are also making offers. You won't know how much the other buyers are offering... or if they are including escalation clauses... or if they are including inspection contingencies... or if they are including appraisal contingencies... or if they are offering cash. So, what then, are you to do as a buyer? I recommend that you make the strongest offer that you are comfortable making and acknowledge all the possible outcomes. Your offer might not be high enough to compete against other offers and the seller might select another offer. You might have included more contingencies than another buyer and the seller might select another offer. You might have the fewest contingencies and the seller might select your offer. You might have the highest offer and the seller might select your offer. Home inspection contingencies make sense to include as a buyer... as do appraisal contingencies... but both can limit your ability to win in a multiple offer scenario. So, make the strongest offer you are comfortable making and acknowledge all the possible outcomes. | |
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Different Local Real Estate Markets Are Performing, Unsurprisingly, Differently |
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 If you are relocating from a small rural area (or from a much larger city) to Harrisonburg, you are likely to experience different market dynamics in the two local markets. If you are relocating from Harrisonburg to a much larger city (or to a much more rural area) you are likely to experience different market dynamics in the two local markets. In conversations with folks moving to or from larger markets, I have heard anecdotes of...
Those sort of (extreme!) market dynamics are not currently being seen very frequently in Harrisonburg... but every local market is different. Consult an active, professional, local Realtor in the area where you are relocating to or from in order to understand current market dynamics in that market. Knowing how the market is performing will help you set proper expectations relative to potential offer terms and contingencies. | |
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You Will Be Well Served To See Multiple Homes You Do Not Love Before You See The One You Do Love |
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 Sometimes home buyers think they should only take the time to go see homes that are almost certainly the PERFECT home that they will almost certainly LOVE. I disagree -- I think you should take the time to see some homes that you will probably LIKE but not LOVE. By doing so... 1. You will start to clarify what you like, love, must have, must not have in a home. 2. You will start to very clearly understand what types of homes are selling for what types of prices. 3. You will be much more confident in moving forward with a home that you LOVE because you have explored multiple homes that you liked but did not love. So... if you want to pore over the photos of new listings and potentially disqualify them based on the photos, that's fine... and if you want to drive by new listings and potentially disqualify them based on the lot topography or surrounding homes, that's fine... but you will likely be a more prepared and confident home buyers if you look at some homes that are close to what you want, but not exactly on the mark. | |
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Bedroom And Bathroom Location Is Often Just As Important As Bedroom And Bathroom Count |
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 A four bedroom, two bathroom home might work wonderfully for you... unless all four bedrooms and one bathroom are on the second level... and the second bathroom is all the way down in the basement. A four bedroom, three bathroom home might be a great fit for you... unless all three of the bathrooms are accessed from inside bedrooms... leaving the person living in the fourth bedroom traversing through someone else's bedroom to get to the bathroom. A five bedroom house might work great for you, unless only one of the bedrooms is above grade and all four of the others are in the basement. A three bedroom, two bathroom house might seem like it is just the right size... unless the first bathroom is a common bathroom on the second level, for all of the bedrooms, and the second bathroom is tiny, in the basement, and two floors away from all of the bedrooms. There are countless other examples I could provide... of imaginary homes and/or homes I have explored with buyers over the past year... where the location of the bedrooms and bathrooms is just as important as how many bedrooms and bathrooms exist. We can sometimes piece together the bedroom and bathroom locations by poring over photos of a new listing... or if a floor plan is available... but oftentimes the quickest way to determine if the bedroom and bathroom layout will work for you is to go walk through the house together. | |
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How Does Your Childhood Home Impact What Home You Want To Buy Today? |
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 What type of home did you live in when you were growing up? A townhouse? A single family home? A one-story home? A two-story home? A home with (or without) a basement? The home you lived in as a child might be subconsciously impacting how you think about and feel about homes you might buy as an adult. If you grew up in a single level home you might be most comfortable buying a single level home -- and bedrooms might seem *SO* far away in a two level home. If you grew up in a two level home you might be most comfortable buying a two level home -- and it might feel odd to have *EVERYTHING* on the main level in a one-level home. If you grew up with a basement it might feel like something is missing in a home without a basement. Certainly, if you grew up in multiple homes of multiple styles and sizes when you were growing up, the impact of those childhood homes might be more diluted. | |
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All Contingencies Involve Uncertainty. As A Seller You Can Pick Which Uncertainty Worries You The Least. |
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 If you are selling your home and you have a few offers from which to choose, you'll have some decisions to make. Which contingencies are you most and least comfortable with? Certainly, ever seller would love to have a cash offer (no financing contingency and thus typically an appraisal contingency), without a home inspection contingency, and certainly without a home sale contingency -- but those offers don't come along that frequently. So, if you have to pick an offer that has some contingencies, which are you most and least comfortable with? Nobody's Favorite: Home Sale Contingency Only Slight Better: Home Settlement Contingency (home already under contract) Comfort Levels Vary: Inspection Contingency Financing Contingency Appraisal Contingency How a particular seller will feel about an inspection contingency, financing contingency and appraisal contingency will vary from seller to seller, house to house and buyer to buyer. Some sellers are quite comfortable with an inspection contingency because they have always been proactive with their home's maintenance over the years. Some sellers are quite comfortable with a financing contingency because the buyer has a significant down payment and/or the buyer is working with a familiar local lender. Some sellers are quite comfortable with an appraisal contingency because they are confident that there are multiple comparable sales that support the sales price. Given that offer terms almost always differ between multiple offers, it is important to discuss and decide which contingencies you are most comfortable with as a seller. | |
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Sellers Are Often Making Price Reductions In A Matter Of Weeks Not Months |
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 Most segments of the local housing market are moving very quickly these days. Many homes are going under contract in a matter of days and not weeks. As such, the market is essentially giving feedback to home sellers very quickly as well. If your home goes under contract in the first week -- success -- you likely prepared it well, priced it appropriately, marketed it thoroughly and likely negotiated a favorable contract. If your home is not under contract after two or three weeks, any number of things could be going on... 1. You might not have prepared the property well enough. 2. You might not have priced the property appropriately. 3. You might not have marked the property thoroughly. 4. You might be selling a property for which there is a very small pool of likely buyers. Because the market is giving feedback to sellers so quickly (Did your house go under contract? Or not?) many home sellers are thus making adjustments very quickly as well - and if the home preparation is solid and if the marketing is thorough, then many home sellers find themselves considering a price adjustment. These days, it is best to price your home perfectly from the beginning (if that is even possible) but if it is not under contract within a few weeks it is better to go ahead and make a price adjustment now rather than waiting a few months. | |
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Mortgage Interest Rate Fluctuations Do And Do Not Seem Likely To Impact Local Housing Market Activity |
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 Will mortgage interest rate fluctuations impact market activity in the local housing market? Yes and no. For context, first... Over the past year, rates have fluctuated between 5.75% and 7.75%. That's a pretty broad swing over just a single year. The current average rate of 7.09% is lower than the 7.5% rate we saw six months ago. Rates have been mostly rising over the past four months from 6.6% to 7.1%. So, will rates impact market activity? Yes... if/as rates get back below 7% or closer to 6.5%, more buyers are likely to more seriously consider more offers on more properties. Likewise, if/as rates rise further and if they approach 7.5%, fewer buyers are likely to consider offers. But, no... rate swings between 6% and 7% (for the most part) seem unlikely to drastically change the number of buyers who will choose to buy a home this year. So, if you will be selling a home, you likely don't need to try to time your listing with when mortgage interest rates are lowest. And if you will be buying a home, it will be convenient if the home you like the most hits the market when mortgage interest rates are the lowest... but you'll probably still pursue it if rates are a bit higher when that perfect house hits the market. | |
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Every Home Seller Will Likely Prioritize Differently When Comparing Multiple Offers |
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 It's tough to be a would-be home buyer making an offer in a multiple offer scenario... [1] You don't know what offer terms other buyers are including in their offers. AND [2] You don't know how the seller will prioritize differing offer terms. For example... [1] Some sellers will focus mainly or only on price -- they will likely go with the offer with the highest offered price. [2] Some sellers will lean most heavily towards cash buyers, followed by buyers with the largest down payments, even if this is not the highest offer. [3] Some sellers will opt for an offer without a home inspection contingency, even if that is not the offer with the highest offer price or with the smallest loan [4] Some sellers will focus mainly on the timing of the closing and/or whether the buyer is offering to let them stay in the house after closing. AND [5] Almost all sellers will consider ALL of these factors but will consider some of the offer terms more heavily than others. | |
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Slightly More Homes Are Selling This Year Than Last, At Significantly Higher Prices |
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 Happy Monday morning, friends! I hope you had an enjoyable weekend of seeing (or in my case, not seeing) the Northern Lights, celebrating the mothers in your life, and soaking in some delightful not-too-hot and not-too-cold spring weather here in the Shenandoah Valley! I was still at least partially in rest and recuperate mode this past weekend after running VA Momentum's Perfect Day 50K trail run the prior weekend with Luke. It was an amazing event with a community feel and great support from the family and friends as individuals and teams ran a 5K every hour on the hour for 10 hours straight, from 8AM until 5PM. It was definitely the longest Luke or I have run in a day!  Speaking of amazing events... each month I offer a giveaway for readers of this market report, and this month... I'm giving away a pair of 3-day tickets to one of my favorite events of the summer... the Red Wing Roots Music Festival!  This super-relaxing and family-friendly music festival from June 21 - 23 at Natural Chimneys Park in Mt Solon features wonderful music (on multiple stages throughout the weekend), great food, lots of activities (hiking, biking, running, yoga, kids events), and all around great fun with family and friends. Have you considered going to Red Wing but haven't been yet? Maybe this summer is the time for you to make it one of your favorite family traditions. I am looking forward to being there with my family and I'm hoping you'll join in on the fun... from June 21st through 23rd. And now, let's move on along to the latest numbers in our local housing market...  The chart above takes a look at our overall market during a variety of timeframes. Number of Home Sales -- As shown in the first set of highlighted numbers, over the past 12 months we have only seen 1,214 home sales in Harrisonburg and Rockingham County, compared to 1,488 during the 12 months before that. As such, we have seen an 18% decline in home sales when looking at a 12 month period -- but when looking just at this year, thus far, we are seeing a 2% increase in home sales, from 386 this January through April compared to 378 last January through April. Median Sales Price -- Over the past year we have seen a 9% increase in the median sales price in Harrisonburg and Rockingham County, which has now reached $335,000 (over the past 12 months) as compared to only $306,700 over the 12 months prior to that. Looking just at the first four months of this year we see a slightly smaller (5%) increase in the median sales price ($338,645) when comparing it to the first four months of last year ($323,735). Median Days On Market -- Homes are selling a bit more slowly this year than last. The median number of days it took for new listings to go under contract over the past 12 months has been nine days... which is an increase from the median of seven days during the 12 months prior to that. Now, looking at a subset of the market, for a moment, here are the same numbers when looking just at detached homes, and excluding townhomes, duplexes and condos...  Focusing just on the first four months of 2024 compared to the first four months of 2023, here are the differences we see between the detached home market and the overall market... There has been a 3% decline the number of detached homes that are selling... compared to the 2% increase in the overall number of homes selling. There has been a 12% increase in the median sales price of detached homes that are selling... compared to the 5% increase in the median sales price of all homes that have sold. So, when looking just at detached homes, slightly *fewer* are selling in 2024, and the increase in their median sales price is higher than that of the overall market. Meanwhile, in the attached home market...  When looking just at attached homes (townhomes, duplexes, condos) we have seen a 13% increase in the number of such homes selling in the first four months of 2024, compared to the first four months of 2023 -- and a 17% increase in their median sales price. As such, the attached home market is seeing a strong start to the year both in number of sales and the price of those homes. Now, let's switch gears learn about the latest trends via some graphs...  As you read above, we are seeing slightly more home sales in the first four months of 2024 compared to the first four months of 2023... but... April was not a contributor to that trend. Strong months of home sales in January and February were the biggest reason why we're seeing slightly more home sales in the first third of 2024 compared to the first third of 2023, as we saw fewer home sales this April (105) than we saw last April (124). Where do we go from here? We'll have to look at contract activity and pending sales (a bit further down this overview) to guess at whether home sales activity will rebound at all in May 2024. But first, let's see how the start of this year compares to the last few years...  The 386 home sales during the first four months of 2024 puts us slightly ahead of the 378 in the first four months of last year... though well below the 447 and 461 home sales levels reached during the first four months of 2021 and 2022. It seems reasonable to conclude we'll probably see around 1,200 home sales this year (similar to last year) and not 1,500 - 1,700 home sales such as were seen in 2021 and 2022. Now, then, looking at slow moving trends by examining rolling 12 months of data...  The top green line, above, shows the median sales price over a 12 month period, measured each month. Over the past year that median sales price has increased 9% from $306,160 to $335,000. Despite fewer home sales and higher mortgage interest rates, the median sales prices keeps... on... rising. The blue line, above, shows the number of homes selling in 12 months time, measured each month. Ever since the middle of 2022 we have seen this metric of annual home sales steadily falling... though in early 2024 that trend seemed to be reversing itself as the pace of annual home sales started to rise again. But... not so much in April 2024. Stay tuned to see if the annual pace of home sales levels out, declines even further, or starts rising again as we head through May, June and July. I haven't touched on it yet in this report, but a large portion of homes that are selling this year are new homes....  Thus far in 2024, 25% (1 in 4) home sales have been new home sales. This is a rather significant change from just a few years ago when only 13% (2019) and 15% (2020) of the homes that were selling were new homes. With soooo many current homeowners having rather low (to super low) interest rates on their current mortgages, we seem poised to have lower numbers of resale home sales for several years to come. As such, the new homes offered for sale (and being purchased) help to at least partially satisfy buyer demand for housing, and we are likely to continue to see around 25% (more or less) of buyers buying new homes over the next year or two. To get a sense of where the market might go next, let's look at contract activity...  Despite fewer home sales in March and April of 2024... the amount of homes going under contract was MUCH higher this March and April (red line) compared to last year (blue line). Given these higher months of contract activity, I believe we are likely to see higher numbers of home sales in May and June. This is reinforced when looking at the number of homes under contract at the end of March and at the end of April...  There are currently 333 homes under contract (waiting to go to closing) in Harrisonburg and Rockingham County... compared to only 275 homes being under contract at the same time last year. Higher numbers of homes going under contract in March and April of this year has resulted in this higher number of pending sales, which should (within the next month or two) translate into higher numbers of closed sales. And yet, just to throw one more metric into the mix to at least partially make you scratch your head and think on this Monday morning...  As shown above, inventory levels are tracking a good bit higher at the start of this year (172-185) than they were last year (109-129) and also well above the four year average (132-147). So, why are there more homes on the market (at any given point) this year than last? My two leading theories are... [1] Homes are going under contract (days on market) a bit more slowly this year than last, which could result in slightly higher inventory levels. [2] Quite a few (31%) of these active listings (58 of 185) are new homes... some of which have not yet been built or have not yet been finished, which might result in them remaining as active listings and not going under contract. Think on that mystery... home sales rising, contract activity rising, prices rising, but inventory... also rising... and let me know if you have any other theories. While you think on that, here's one more thing that is rising...  Mortgage interest rates have been above 6.5% for the entirety of the past year, and the sub-5% rates are now a distant (two years ago) memory. After steady declines in rates between October 2023 (7.79%) and December 2023 (6.61) we have seen rates trend back up over the past four months. Anyone who is waiting to buy a home until mortgage interest rates get back down to 5% -- or even 6% -- will probably have a long wait. So, what does all of this mean for you? Home Sellers - As has been the case for quite a few years now, you're in a great position. You will likely be selling your home at a higher price than would have been possible over the past few years. Remember, though, that mortgage interest are high, which make mortgage payments for buyers quite high, so make sure your list price is in line with recent sales so that you have enough buyer interest to hopefully see your home quickly go under contract. Home Buyers - Depending on your price range and the type of property you hope to buy, you may or may not have LOTS of competition. I am currently seeing some properties linger on the market for a week or more without any offers... and some going under contract within days with multiple offers. Talk to a lender to get a sense of where you can be and where you want to be with your mortgage payment and purchase price, and then let's start getting out there to see some homes and get a feel for the market so that you're ready to confidently move forward when the right house hits the market. Home Owners - If your current home works well (or well enough) for you - enjoy your likely low housing payment (depending on when you bought or refinanced) and enjoy the increasing equity you likely have in your home. As much as excited would-be home buyers might wish you would sell your home so they have more options for buying... I can't blame you for staying put and enjoying where you are. Renters - Plenty of folks are not homeowners and are not planning to buy anytime soon, or do not see themselves being able to buy anytime soon. This is completely understandable given the significant increases in sales prices and mortgage interest rates over the past five years. If you are on the edge of being able to or interested in buying, don't hesitate to have a preliminary conversation with a lender and/or with me to get a sense of what it would look like to buy a home... especially given how rental rates keep on increasing. And... that's a wrap, folks. You are about as well informed as is possible on the overall Harrisonburg and Rockingham County real estate market on this Monday morning. But if you have questions about a specific segment of the housing market, or about your neighborhood, or about your home... feel free to ask! Until next month... [1] Check out the complete set of May 2024 charts and graphs here. [2] If you're getting ready to buy, let's chat about the process, the market and what you hope to buy. You'll also want to talk to a lender sooner rather than later. [3] If you're getting ready to sell, let's meet soon to talk about the market, the process, your house, your timing and your goals. To touch base with me about any of the above, call/text me at 540-578-0102 or email me here. Enjoy your Monday! | |
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Some Buyers Are Starting To Be Able To Compare And Contrast Multiple Similar Listings At The Same Time Now |
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 For the past few years, inventory levels were so low and homes were going under contract so quickly that a buyer's process looked like this... Home #1 is listed for sale, we go see it, you make a decision about whether to make an offer, it is under contract within 48 hours. Three days later, Home #2 is listed for sale, we go see it, you make a decision about whether to make an offer, it is under contract within 48 hours.
Etc., etc. There would rarely be two similar houses on the same time for you to be able to consider both at the same time and decide which to pursue. You'd have to decide if you wanted to pursue House #1 before knowing that House #2 would be coming on the market. If you didn't like House #2 as much as House #1, it was too late, as House #1 would already be under contract. But... we're starting to see (some!) listings linger on the market for a bit longer these days... Some buyers are able to go see multiple houses on one day and compare and contrast them before deciding which one to pursue. Or, some buyers are able to go see multiple houses over the course of a few days and compare and contrast them before deciding which one to pursue. What a novel concept... being able to consider multiple options at once, rather than only being able to consider one option at a time, over and over. | |
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No Need To Get Overly Competitive As A Home Buyer... Unless You Have Competition |
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 Many sellers of homes newly listed for sale are still receiving multiple offers from eager buyers within the first few days on the market... but that is not universally happening on all new listings. As such... if you're the first one to the party... the first buyer to make an offer, you likely do not need to... [1] included an escalation clause [2] waive a home inspection [3] offer to pay your offered price regardless of the appraised value But... if you submit an offer without an escalation clause, with a home inspection contingency and with an appraisal contingency... and then receive notice that another offer has been received... you might pause to reconsider your offer terms. If you are competing against another buyer, you may very well want to... [1] included an escalation clause and/or [2] waive a home inspection and/or [3] offer to pay your offered price regardless of the appraised value The competition that you do or do not have when making an offer should guide and direct your offer terms. | |
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Buying A Great House Is Likely Better Than Eternally Searching For A Perfect House |
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 You may have heard of the expression - "Don't let the perfect be the enemy of the good" - and here are a few other similar phrases from philosophers over the ages...
So, how does this all apply to house hunting and home buying? When in the midst of a home search process, when a buyer finds a house that seems like it could work well -- they might get stuck in trying to determine conclusively whether good is good enough... or whether great is perfect enough. It's understandable... Buying a house is an expensive and lasting decision. You'll likely live in the home for many years to come, and the various aspects of the house will shape some of the patterns of your life, relationships and more. So, it's important to get the right house -- a great house -- a perfect house -- right? Yes, 100%. That said, oftentimes a house is great, but is not 100% perfect, and this can leave a buyer wondering whether to go ahead and jump on the pretty-amazing-but-not-perfect house, or to keep looking for something that is an even better fit for their needs or desires. There's no magical answer here -- it's not that you should always decide to buy a great-but-not-perfect house -- and it's not that you should always eternally wait for the perfect house. | |
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Local Real Estate App Now Available For Download |
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 Funkhouser Real Estate Group has recently launched a real estate app that will make your home search easier than ever. Download it today by clicking here, or read on for some highlights. Enjoy an easy and intuitive map based search when you first launch the app, based on your current location...  View full property details for any home on the market with the ability to easily ask a question or schedule a showing...  Create a search area by drawing any shape you'd like, and save that search for notifications when a listing hits the market in your areas of interest...  Refine your search parameters with a variety of filters allowing you to find just the houses best suited for you...  Take this new local real estate app for a spin today by downloading it here. Let me know if you have questions or feedback! | |
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It Is Prime Time For Getting Your House On The Market If You Want To Sell This Summer |
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 Lots of home buyers try to, prefer to, want to move into their next home during the summer months... which typically means contracting on that home in May or June. As such... sellers who are hoping to sell in the next six months should consider getting their home on the market now or soon. Just to spell out a bit of the potential timing for listing your home in May... May 15 - home listed for sale May 20 - home under contract (not always this fast, but often so) June 30 - closing on sale of home (typically 30 - 45 days after contract) Or, a bit later... June 1 - home listed for sale June 5 - home under contract July 15 - closing on sale of home A touch later... June 15 - home listed for sale June 20 - home under contract July 31 - closing on sale of home Many home buyers hoping to transition over the summer will want to close on their purchase by the end of July -- which means sellers will be an ideal position to sell to those buyers if they have their home listed for sale by June 15. Again, there are plenty of assumptions in the timelines above, such as the home going under contract in four days (when it might take 10 or 14 or 21) and a closing happening in about 40 days (when it might take 60). If you hope to sell this summer, we should chat sooner rather than later about a potential timeline for preparing your house for the market and getting it on the market. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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