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Missed Another Resale Home? Maybe Build A Home Instead? |
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An age-old question is whether to buy a re-sale home or build a new home, especially as your price range gets above $500K or $600K.
Typically, the tension between buying vs building is one of: 1. Goals 2. Money 3. Timing If you build, you can get the house you want, but you'll pay more for it and it will take a lot of time and attention. 1. Goals = Win 2. Money = Lose 3. Timing = Lose If you buy an existing home, you won't get exactly what you want, but you will pay less for the house and the process will not be as much of a drain on your time. 1. Goals = Lose 2. Money = Win 3. Timing = Win Don't let my oversimplification of this issue fool you -- this is something that buyers can get stuck debating for months, or even years, often while looking at resale homes to try to convince themselves to buy instead building. AND -- two current market conditions are making it an even more complicated decision...
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Record Number of Building Lots Sold In Harrisonburg, Rockingham County in 2021 |
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While we are still a few days short of a full year, it is already quite clear that there was a significant surge in the number of building lots sold in Harrisonburg and Rockingham County in 2021. There have been 144 sales of building lots of less than an acre in Harrisonburg and Rockingham County in 2021. To put that in context...
Clearly, these 144 lot sales is a big jump from the number of lots that typically sell in a year in this area. Breaking it down a bit, here are the top locations where lots sold in 2021...
It seems plenty of would be home buyers may have elected to buy a lot and build a home given the shortage of available homes to purchase at any given time... and/or there may be some builders purchasing lots to build spec homes. | |
Are Lumber Prices Finally Starting To Normalize? |
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If you haven't heard -- lumber prices skyrocketed during COVID. The graph above shows only the past 12 months. If we look a bit further back we can get a bit more context...
So, "normal" over the four years prior to COVID seemed to be a range of around $300 to $475 --- although prices did rise to $639 back in mid 2018. But then, as lumber mills shut down due to COVID and production slowed, prices skyrocketed, getting as high as $1,635 in May 2021. But over the past month, that price has fallen quite a bit...
So, a nearly 50% decline in prices over the past 45 days? That is solid progress towards getting lumber prices back to their long term normal-ish range. Hopefully this will mean we'll start to see more new construction, creating more housing inventory, and easing the inventory strained housing market... | |
Buying vs Building When Hit With Low Inventory AND High Building Costs |
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Typically, the tension between buying vs building is one of: 1. Goals 2. Money 3. Timing If you build, you can get the house you want, but you'll pay more for it and it will take a lot of time and attention. 1. Goals = Win 2. Money = Lose 3. Timing = Lose If you buy an existing home, you won't get exactly what you want, but you will pay less for the house and the process will not be a drain on your time. 1. Goals = Lose 2. Money = Win 3. Timing = Win Don't let my oversimplification of this issue fool you -- this is something that buyers can get stuck debating for months, or even years, often while looking at resale homes to try to convince themselves to buy instead building. AND -- two current market conditions are making it an even more complicated decision...
If you are stuck in this quagmire, I'd be happy to meet with you to talk through some of the pros and cons and try to help you come to a decision you'll be pleased with in the short and long term. | |
Building Lots For Sale in Harrisonburg, Rockingham County |
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If you aren't finding what you're looking for in a resale home, you could always build a home! Yes, admittedly, construction costs are high right now, but you may want to at least explore your options. The list above shows each of the subdivisions where you can currently buy a building lot in Harrisonburg and Rockingham County. If you are interested in additional details on any of these building lots, just let me know.
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Where Might You Build Your New Home In Harrisonburg or Rockingham County? |
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Where might you build your new home? There are 118 building lots for sale in Harrisonburg and Rockingham with public water and sewer priced under $200K. The list below shows the subdivision / location of the lots. If you're interested in further details about any of these lots or locations, let me know!
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This Is A Great Time To Explore Building Lots For Sale |
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If you're thinking about building a home, it's a great time to explore building lots for sale - simply because it is not an indoor space with regular inhabitants. I don't think the owner of the building lot will feel a need to wipe down the grass, underbrush or trees after you leave. Speaking of building, an age-old question is whether to buy a re-sale home or build a new home, especially as your price range gets above $400K or $500K. Typically, the tension between buying vs building is one of: 1. Goals 2. Money 3. Timing If you build, you can get the house you want, but you'll pay more for it and it will take a lot of time and attention. 1. Goals = Win 2. Money = Lose 3. Timing = Lose If you buy an existing home, you won't get exactly what you want, but you will pay less for the house and the process will not be a drain on your time. 1. Goals = Lose 2. Money = Win 3. Timing = Win Don't let my oversimplification of this issue fool you -- this is something that buyers can get stuck debating for months, or even years, often while looking at resale homes to try to convince themselves to buy instead building. If you are stuck in this quagmire, I'd be happy to meet with you (via Zoom?) to talk through some of the pros and cons and try to help you come to a decision you'll be pleased with in the short and long term. | |
Last Chance To Build A New Home at Heritage Estates |
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If you want to build a home at Heritage Estates -- an active adult community in Harrisonburg, Virginia with homes featuring French Country architecture -- this is basically your last chance to do so! There has been a flurry of buyer activity in the neighborhood and there is now only ONE remaining home site (Lot 18) on which you can build a home. The developer is also building a model home (rendering above) on Lot 30 (details in a PDF here) -- so that is an option as well, though it is framed in and under roof, so you don't have quite as much flexibility as to what you might build. Find our more about Heritage Estates here and email me if you have further interest or questions. | |
The 67 Places You Could Build A Home NOT In A Subdivision |
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Yesterday I was taking a look at the various locations, mostly in subdivisions, where you can buy a lot in Harrisonburg or Rockingham County with public water and sewer, including...
But you don't have to build in a subdivision -- or on a lot with public water and sewer -- and sometimes that's the goal -- to get a bit more land. So, here's a VERY wide look at properties currently for sale in Harrisonburg and Rockingham County *without* public water and sewer that are *not* in subdivisions, priced under $200K... View these 67 (as of today) properties by clicking here. Plenty of folks looking to build homes start to think about it at this time of year -- hoping to acquire a property to start building in the Spring. So, as you start considering a new build -- think about how much land/space/privacy you'd like, whether you'd like to be in a subdivision, whether you'd prefer to have public water and sewer, etc. | |
Where Might You Build Your New Home? |
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Where might you build your new home? There are 180 building lots for sale in Harrisonburg and Rockingham with public water and sewer priced under $200K. The list below shows the subdivision / location of the lots. If you're interested in further details about any of these lots or locations, let me know! | |
49 More Detached Homes Coming To The Crossings |
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The Crossings, a neighborhood of detached homes straddling the City/County line, will be expanding - from 35 homes to 84 homes - after a slight rezoning of the land by Rockingham County. The first phase of the neighborhood included 35 building lots, most of which have been built upon and the homes sold. The new phase will include 49 home sites, with 40 of them in the County and nine in the City. Here's the site plan for the new phase... Here is a somewhat recent aerial view of the area -- from about two years ago -- when many but not all of the homes had been built... Dick Blackwell with Blackwell Engineering works with the developer and indicated at the Board of Supervisors meeting that the houses will cost about $200,000. That does seem possible given recent sales at The Crossings, many of which have been close to $200K... Looking a bit further at the metrics, we find that the median sales price of homes at The Crossings in 2018 was $226K... After lots of news of new rentals, condos and townhouses, it's nice to hear that some modestly sized/priced detached homes will be built in the near future as well! | |
New Building Lots Available in Preston Lake, Crossroads Farm |
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Of interest -- two new types of building lots have hit the market in the past week or so.... PRESTON LAKE Previously, if you wanted to build at Preston Lake -- you had to work directly with the developer/builder, using one of their sets of floor plans, and having them build the home for you. Now, it appears you can purchase a building lot and bring your own builder. The lots that are now listed for sale are between 0.4 and 0.5 acres and are priced between $145K and $175K. Explore these building lots at Preston Lake here. CROSSROADS FARM The (new-ish) developer at Crossroads Farm has just recently listed some new "cottage lots" at Crossroads Farm, that are somewhat small -- only 0.2 acres. As marketed, these "smaller footprint lots offer less yard maintenance without sacrificing the elegance of Crossroads Farm." These lots are priced between $70K and $90K. Explore these building lots at Crossroads Farm here. | |
New Developments Coming Soon? |
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Three parcels of development land (see below) are now under contract. Perhaps we'll be seeing some new developments taking shape in and around Harrisonburg soon? 2112 SUNNY SLOPE LN, ROCKINGHAM, VA - 16.91 ACRES - $1,039,000 This nearly 18 acre tract of land is just outside the City of Harrisonburg and offers an opportunity to develop for residential and/or commercial use, subject to rezoning. The property is located on Route 42 with about 450 feet of road frontage near WalMart and beside Harrisonburg Construction. There are three parcels, two currently zoned A2 and one zoned R2. Water & Sewer is available. The property includes a 3,000 sf ranch style residence with a basement and was built in 1960. UNDER CONTRACT SINCE 3/2/2017. 9447 MCGAHEYSVILLE RD, MCGAHEYSVILLE, VA - 21.76 ACRES - $1,250,000 Temporary Price Cut for an Early April Closing! Extraordinary Opportunity! A fully approved Residential Subdivision in McGaheysville and ready to be developed. The site is approved for 84 units (6 single family & 39 duplex lots). It can be constructed in Phases. Full views of Massanutten and the Blue Ridge Mountains. The subdivision includes a roundabout, internal loop road for walking, and riding, a shared access pond/park area. County water & sewer. UNDER CONTRACT SINCE 7/5/2017. TBD BOYERS ROAD, ROCKINGHAM, VA - 26.27 ACRES - $2,365,000 Prime Development Land. 26 + Acres Zoned R3 on the east side of Harrisonburg on Boyers Road across from Sentara RMH Hospital. Property borders the Massanetta Springs Camp & Conference center property on the east and also has a pond that has water in it most of the year. Could be a great duplex or townhouse development. There is a small barn on the property. UNDER CONTRACT SINCE 9/11/2017. | |
Where are building lots actually selling in Harrisonburg, Rockingham County? |
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A common question amongst builders and would be lot-buyers is where building lots actually selling these days in Harrisonburg and Rockingham County. Let's take a look.... As shown above, the most active subdivision for home sales (and the location with the highest price) has been The Springs at Osceola. Lot sales are a bit slower this year (46 so far in 2016) than in previous years (78 in 2015, 84 in 2014). Stay tuned for more updates on lot sales as we move forward. | |
Sales of Building Lots Finally (Slowly) Improving |
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After a huge spike in sales (408 lot sales in 2004) and in median prices ($99,900 in 2006), the sales of building lots cooled quite a bit between 2004 and 2009. The last few years, have shown slow but steady growth in this segment of our market -- 60 . . . 61 . . . 79 . . . 83 sales over the past four years. This has also resulted in stability in the median sales price, which has been right around $55,000 for the past five years. The next question is -- where (and when) will we see the next new development of single family home residential lots.... | |
Lot Sales in Harrisonburg and Rockingham County |
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Let's take a bit of a closer look at lot sale in Harrisonburg and Rockingham County - both at the number of sales in each subdivision, as well as the number of active listings, plus we'll examine the price range for each neighborhood.... A few observations....
Explore lots for sale....
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How to begin thinking about building a custom home |
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I have several clients who are thinking about building a custom home. This is a helpful piece from Charles Hendricks [ Custom Home - how to get started ] that can get you started thinking about whether you are going to start by meeting with an architect, drafter or builder. Read more here: Custom Home - how to get started | |
Details of Sale of Preston Lake Subdivision |
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The bulk of Preston Lake subdivision (mostly undeveloped building lots) was foreclosed on in 2011, but last week was purchased by a neighboring land owner --- a developer from Maryland. After some further research, here is what was conveyed:
Thus, if we ignore the fact that roads, water and sewer need to be installed on those 43.5 acres (outlined above in red), this was essentially the purchase of:
And here is a bit of context on the purchase price:
So, how much was paid for each lot? Well, let's assume that a single family home lots is worth twice as much as a rowhouse lot --- and that a finished lot (with infrastructure) is worth twice as much as a planned lot. If that were all the case, this new developer essentially paid:
If you refer back to the amount of debt that was foreclosed on ($20M) and compare that to the new purchase price ($2M) we can assume that the previous developer's lot basis was 10 times higher ($100K for single family home lots, etc). Stay tuned! UPDATE: After further review of the deed transferring the property from Wells Fargo, I am now noticing that the new developer has agreed to pay a "Subsequent Fee" to Wells Fargo of 2% of the gross sales price of any of their newly acquired properties (building lots or lots where they have built homes) when it closes. This only applies to transfers within the first five years. | |
Both builders and buyers now prefer custom homes over spec homes |
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These definitions do not describe all possible situations, but they will give you a general idea of the two ways to go about buying/building a new home.... CUSTOM HOME: A home designed jointly by builder and buyer, which is then built to the buyer's specifications. SPEC HOME: A home designed by a builder, and built speculatively by the builder, who then works to find a buyer for the completed home. Back in the height of the housing market (a.k.a. housing boom)....
Now, after the market has cooled off quite a bit (a.k.a. housing bust?)....
Thankfully, these desires actually coincide. There were lots of spec builds in the height of the market, and lots of buyers to buy them. There are very few spec builds now, and very few buyers to buy them. Given the givens, here is some guidance for today's market.... Builders --- if you're going to build speculatively, put a good deal of thought into the floor plan and make sure it is going to be an attractive layout for a wide spectrum of buyers. Also, consider finishing the house through the drywall stage and then marketing it to find a buyer that can make their own selections for interior finishes. Buyers --- talk to your lender early to know what will be possible for you. Buying a lot, obtaining construction financing, and building a custom home is quite a different financial transaction than buying a finished home with a traditional mortgage. | |
Lot sales (of less than an acre) seeming stable in Harrisonburg, Rockingham County |
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It's a tough time to sell a building lot in Harrisonburg or Rockingham County. Before the real estate boom of 2003-2007, roughly 200 lots sold per year. In recent years, only 60 lots have been selling per year. However.....
The graph above represents lot sales reflected in the HRAR MLS of less than one acre. See a clearer version of this graph on Page 18 of this PDF. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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