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!
Buying
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Summer Has Not Started, But For Real Estate, Summer Is Nearly Over |
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 Technically, summer has not even started yet -- the first day of summer is June 21, 2019 - this Friday. I suppose then, that was why we had such pleasant temperatures over the past week or two -- it was really late Spring, not yet Summer. :-) But for real estate, summer is almost over, at least as a home seller. Home buyers that want to close on their home purchase before next school year are likely aiming to close on their purchase by around August 15, 2019. Most contracts take around 45 days (sometimes 30, sometimes 60, sometimes in between or longer or shorter) to get from a brand new contract to the settlement table. If you wanted to close on a home by August 15, and it was going to take 45 days to do so, you'd need to be under contract by July 1. So -- that leaves buyers with only about two weeks to get a house under contract if they want to close on their purchase and have a chance to move in prior to next school year. So, buyers, get ready to amp up your game and get that new house under contract! And sellers, if you want to sell your house this summer, you need to get it on the market soon, now, yesterday! | |
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Local Home Sales Stable, Prices Rising in First Five Months of 2019 |
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 We're nearly halfway through the year and 2019 is shaping up to be a strong year of home sales, very similar to last year. But before we dive into the data, here are a few quick links...
Now, let's see what the data is showing us this month...  As shown above, we have seen a solid start to the year, now five months in...
 Breaking things down a bit further, as outlined above, we'll start with the green portions of the chart -- which are detached homes...
The orange section above represents attached homes -- including duplexes, townhouses and condominiums, where we find that...
 As you look at the graph above, find the dark red line and follow it from month to month from January through May to see how this year compares to previous years. What you'll find is that January, February and March were nothing special -- at all. They were slower or the slowest such months from the past few years. But once we hit April, things started to change -- we saw more home sales in April than any of the past three months of April -- and May home sales were also stronger than two of the past three months of May. So, as noted above -- April was surprisingly high, May was a pretty strong showing, but June, that might be where this year starts to slow down, comparatively. Last June we saw a surprising, historic, 174 home sales in a single month. It seems rather unlikely that we'd see that many home sales this June.  This tall, colorful, graph shows each month of home sales stacked on top of the prior month -- and you'll see that the first five months of this year have tracked pretty consistently with the first five months of each of the past two years. So, it seems reasonable to think we might end up somewhere around 1280 - 1300 home sales for the full year of 2019. Stay tuned as the year continues to develop.  This graph shows looooong term trends -- tracking a rolling twelve months of data when it comes to the quantity of home sales and the median price of those home sales. The highly technical 1300-ish red squiggle at the bottom of the graph represents the meandering annual pace of home sales as shown in orange. We've been somewhere around an annual pace of 1300 home sales for the past 12 months or so -- with the most recent (two month trend) heading us in a positive direction. The top, green, line is showing the long term trend for the median sales price of homes in Harrisonburg and Rockingham County. The median sales price keeps on climbing -- from $193K to $206K to $215K over the past two years.  Sometimes looking at a single month of data can throw us off -- getting us overly excited or overly depressed. Last May (2018) we could have been elated about the incredibly strong month of contracts -- though it followed two slower months in March and April. This year we saw strong months of contracts in both April and May -- even though neither reached the 171 contracts seen last May. But in the end, March-May contracts only added up to 427 contracts last year -- and 436 this year -- so, a net increase.  And so, as shown above, the sad story continues -- it is a tough time to be a buyer. Inventory levels might be rising and falling seasonally (rising, slightly, right now) but the overall trend over the past several years has been fewer and fewer homes for sale at any given time. This causes buyers to have fewer choices at any given moment -- and requires that they be able to act quickly and decisively when a house of interest comes on the market.  I'm not always convinced that month to month increases or decreases in mortgage interest rates can specifically spur on buyer activity (there has to be a house listed for sale that you actually want to buy) but the lower (and lower, and lower) mortgage interest rates of late certainly don't hurt! We haven't seen mortgage interest rates below 4% in over a year -- and right now many mortgage lenders are quoting rates of 3.875%, 3.95%, etc. An exciting time to lock in a fixed mortgage interest rate! Alright -- we'll wrap it up there for now, though keep in mind that there is a LOT more in my full market report, which you can download as a PDF here. And -- if you're getting ready to buy or sell -- here are some things to keep in mind... SELLERS -- even though it is a seller's market in just about every price ranges right now, you must still focus on price, condition and marketing. For further reading on buying or selling in this area, check out.... | |
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Crunching the Numbers on Both Selling AND Buying a House |
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 If you will be selling your home to buy another, there are a lot of numbers floating around....
Above you will see a spreadsheet I put together to help you think about some of these numbers as you are evaluating if and when you will make a move to a new house. In yellow, are all of the inputs you will need to provide, or that you and I can determine together, such as your current payment, your home's current value, your mortgage payoff, whether you will be putting any additional money into the transaction, etc. In green, I have identified your potential future mortgage payment and the net change in your monthly payment. All of the numbers without a background color will automatically calculate for you. Click here to download this worksheet as an editable Excel file. | |
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Summer Home Buyers Will Love These Low Mortgage Interest Rates |
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 Interest rates climbed nearly all the way to 5% this past Fall -- and over the past year have been at an average of 4.5%. But since the first of the year, mortgage interest rates have been falling, falling, falling, further and further! They are now, unbelievably at 3.99% for a 30 year mortgage. So - if you're contracting to buy a house in the near future you may want to lock your interest rate in sooner rather than later. It's hard to imagine we'll stay under 4% for long. | |
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Monthly Housing Costs Actually Decline, A Bit |
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 The monthly cost of a mortgage on a median priced house has actually declined a bit this year! For this analysis, I am measuring "monthly housing cost" by determining the mortgage payment amount (principal, interest, taxes and insurance) for a median priced home in Harrisonburg and Rockingham County, if a buyer were financing 80% of the purchase price and paying Harrisonburg real estate taxes. Over the past year, the median sales price has only increased 1%, and the average mortgage rate has declined 6%, which results in a slight decline in the median housing cost -- if you are buying your home, and you have a 20% downpayment. So - monthly housing costs are still relatively high from a historical perspective, but we're not seeing a 12% increase in that monthly cost like we did between 2017 and 2018! | |
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Be Careful of Asking For Little Repairs When Also Asking for Big Repairs |
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 After a home inspection, a buyer knows more about the house than when they agreed to pay $X to purchase the house. In order for them to still want to pay $X for the house, they may ask the seller to address some of the deficiencies found during the home inspection. Imagine a hypothetical scenario where the following deficiencies are found:
So - which items should the buyer ask the seller to repair? Some could say ALL of them - the buyer didn't agree to pay $X for the house with all of these large and small issues. But I'd advise most buyers to only request that the seller address a subset of those issues:
All of the other items (3-7) are minor issues that won't cost too much (in time or money) to repair after you buy the house. But why not ask the seller to repair these items?
This is not a one-size-fits-all strategy, but I do urge you to carefully weight whether to ask for a home seller to make minor repairs if there are some major repairs that need to be addressed. | |
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Can Parents of JMU Students Buy Any House And Put Lots of Students In It? |
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 With great regularity, potential buyers (either investors or parents of JMU students) will ask if a single family home can be purchased and rented to a group of JMU students -- often an intended group of four or more students. I let them know that it will be no problem at all -- the adjoining property owners in the quaint neighborhood probably won't mind as long as the students aren't too bothersome -- and the City doesn't mind at all if their zoning ordinances are violated, so long as it's just "nice college kids".... WAIT! NOT REALLY! READ ON!!!! It seems that some buyers are really getting that feedback of "sure, it will be fine" -- though I'm not sure if they're getting it from their Realtor, or from someone else advising them in the transaction, or if they just aren't thinking about whether their planned use of a property is allowable. The REAL answer, and the feedback that I ACTUALLY provide to my clients is.... 1. We need to check to see how this property is zoned, and whether that zoning classification allows for that number of unrelated people to live in the property. 2. We need to check to see if there are recorded restrictive covenants for this neighborhood that restrict the number of unrelated people who live in the property. A few notes.... 1. Most single family homes in the City of Harrisonburg are zoned R-1 or R-2 and do NOT allow for three or more unrelated people (students or otherwise) to live in the property. 2. If a property has been used in a non-conforming manner (for example, four students living in it) since before the zoning ordinance was put in place, without a 24 month gap in the non-confirming us, it MIGHT be possible to continue to use the property in that non-conforming manner. And, if #2 above is starting to get confusing, then we arrive at my main reason for writing today.... CALL COMMUNITY DEVELOPMENT TO UNDERSTAND ALLOWED USE OF A PROPERTY! Yes, in fact, there are very helpful City staff in the Community Development department -- who can very quickly help you understand whether a property can be legally used as you intend to use it. And it is imperative that you make this call BEFORE you buy the property, and even BEFORE you make an offer on the property! | |
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Most Home Sellers Do Not Seem To Accept Offers With Home Sale Contingencies Unless Those Houses Are Already Under Contract |
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 Based on the analysis above, it would seem that sellers are not (in almost all cases) accepting home sale contingencies unless the home that must be sold is already under contract. Here's the logic....
It would seem that most buyers are likely waiting to make offers until they have their own properties under contract (thus eliminating the need for the kickout clause) AND/OR most sellers are not accepting offers with home sale contingencies unless the buyer's house is already under contract (thus eliminating the need for the kickout clause). If you are a buyer, I would certainly suggest the strategy outlined above (and the only one that is apparently working with sellers right now) --- get a contract on your house and THEN make an offer on the property you would like to purchase! | |
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Do We Focus On Buying Or Selling First? Which Will Be Harder? |
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 If you are getting ready to sell your home AND buy your home, it can sometimes be difficult to determine where to start... Do you start by finding a house you want to purchase? Or do you start by listing your home for sale? I would suggest that you start with whichever you anticipate will be the most difficult part of the two step process. If it will be difficult to sell your home (because of price, location, layout, features, age, etc.) and it will be at least slight easier to buy the next one (plenty of viable options are listed for sale) then you are likely best off starting with listing your home for sale. Work to get the more difficult half of the transition underway by getting your current home under contract, and then work on the easier side of the transition. If it will be more difficult to buy the next house (because of the specificity of your housing goals, or because of low inventory levels, etc.) and it will be at least slightly easier to sell your current home (because the property type, location or price are in high demand) then you are likely best off focusing first on finding the home to buy -- and then listing your home for sale. There are plenty of nuances we can discuss further to formulate a plan for attempting to simultaneously sell and buy -- but as a general rule of thumb, you'll be best off to start with the harder half of the transaction. | |
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The Danger Of Focusing On Just One Comparable Sale |
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 It's easy to want to do this -- as either a buyer or a seller. Let's think about it using the mostly fictional illustration below...
THE BUYER'S STATED PERSPECTIVE I know that your house is listed for $400K, but this one other home a few streets over sold for $350K last month, and it was a larger, so I'm not paying any more than $350K for your home. THE LARGER CONTEXT Just a few items...
Furthermore, aside from all of these differences in the two houses --- the other ($350K) house is not available any longer --- and there aren't three other houses just like it that the buyer can decide to buy. In this case, by focusing on this one not-actually-that-similar sale, the buyer has put themselves in a situation where they might miss out on purchasing a great home because of how they are viewing the market based on one comparable sale. THE SELLER'S STATED PERSPECTIVE I am confident that I can sell my house for $350K. After all, my friend owned a very similar house and he just sold it in a week, with multiple offers, for $360K! THE LARGER CONTEXT Just a few items...
Again, by focusing on this one not-actually-that-similar sale, the seller has put themselves in a situation where they might miss out on selling their home because of how they are viewing the market based on one comparable sale. So -- as a buyer or as a seller -- don't focus on just one comparable sale when deciding on a reasonable price to pay or to ask -- look for the larger context! | |
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If You Are Buying A House With A Basement, Test It For Radon |
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 As you can see above, Rockingham County is in Zone 1 -- which means we are in an area that is likely to have high radon levels. What is radon, and what does it mean for you? Read on, from the EPA.... Radon is a radioactive gas that comes from the natural breakdown of uranium in soil, rock and water and gets into the air you breathe. Radon typically moves up through the ground to the air above and into your home through cracks and other holes in the foundation. Radon can also enter your home through well water. Your home can trap radon inside. Learn more about radon and real estate here. | |
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Will All 264 Currently Listed Homes Be Appealing To You? |
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 If you are entering the market to buy a home, the number of homes you will have to choose from will vary widely based on what you are looking for in a new home. Some buyers have a very narrow scope and find themselves on a prolonged hunt for what seems to be an elusive or mythical home. Some buyers find plenty of options, evaluate quite a few, make a decision and move forward with an offer. However -- keep in mind that as you consider the 264-ish homes currently on the market for sale, that some of them have been on the market for 3 months, 6 months, 9 months or even longer. The freshest of fresh listings are those that have come on in the past 30 days -- which (this time of year) is less than 100 of the 264-ish homes currently listed for sale. Depending on your time frame for buying, and the narrowness of your scope, sometimes it makes sense to quickly evaluate the current options -- and then to wait and see what new and exciting listings will be coming on the market in coming days and weeks. Steps to get started include talking to a lender to get a sense of your target price range, and then chatting with me (in person, by email, by phone) so that I can also be keeping an eye out for suitable properties for you. Learn more about the home buying process at...  Keep up with new listings at ...  | |
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Understanding Price Per Square Foot When Talking With A Builder |
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 If you're thinking about hiring a builder to build you a new home, you may eventually be thinking about or talking about Price Per Square Foot. Let's try to create some context. Stick with me here... $111 = The average Price Per Square Foot for all properties sold in Harrisonburg and Rockingham County in 2018. But that includes condos, townhouses and duplexes - maybe those are throwing off our understanding of PPSF. $121 = The average Price Per Square Foot for all detached homes sold in Harrisonburg and Rockingham County in 2018. OK -- it didn't change much -- but perhaps the middle aged homes and really old homes are throwing us off as well. $149 = The average Price Per Square Foot for all detached homes less than 10 years old that were sold in Harrisonburg and Rockingham County in 2018. So -- new-ish homes sold in the MLS have been selling at an average of $149 per square foot. Though I should point out that the price per square foot does run all the way up to $218 in this same set of sales. A 2400 SF home at $149/sf (including the land) would cost $357,600. That's using the PPSF from the MLS for detached homes built in the past ten years. But your builder is likely quoting you a price per square foot for just the house -- and not the land. So if a builder says they can build for $125/SF... As a final (important) disclaimer here -- I'm not a builder. Talk with your builder about how they price the homes that they build for their clients. Carefully weight the pros and cons (financially and otherwise) of building vs. buying. In the end, you'll probably be able to get a house that is a better fit for you if you build -- but it might be at a slight premium over the price you might pay for a re-sale home. | |
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Buyers Are Racing To Contract On New Listings In The City |
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 It seems it would be an understatement to say that there are a LOT of buyers looking to buy homes in the City of Harrisonburg. Thus far in 2019 buyers have contracted to buy 99 homes in the City of Harrisonburg. Here's how fast they did so...
So, yeah, homes are selling (going under contract) very, very quickly right now in the City of Harrisonburg! | |
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Another Strategy For Preparing To Sell While Waiting To Buy |
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 As described yesterday, sometimes you might have to think about whether you are willing to move twice. If you'd really rather not move twice -- but you need to sell in order to buy -- and it will be harder to find something to buy than it will be to sell -- so you don't want to list your current home for sale until your future home appears... Then maybe, just maybe, we need to think about timing and sequencing a bit differently. Instead of this...
Maybe it needs to be this...
By changing around the sequence (preparing and photographing your current home ahead of time) we will be ready to list your home almost *instantly* when a home comes on the market that you are excited to pursue. So -- give it some thought -- would re-ordering the steps as described above make sense for your situation? Would it allow you to more quickly move towards a successful transition from one house to the next? | |
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Are You Willing To Move Twice? |
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 Anecdotally, the $250K - $300K market is HOT right now. If you're looking to buy a home between $250K and $300K expect to have LOTS of competition from other buyers. Houses that are prepared well, priced well and marketed well, are going under contract quickly -- sometimes with multiple offers. Which then (eventually) leads us to the question at hand -- are you willing to move twice? If you're buying a home between $250K and $300K, there is a decent chance that you own your current home, and that you'll need to sell it in order to buy the next house. And given that there are so few options for you to buy right now, you probably haven't listed your current home for sale yet -- because you're waiting until you see something that you want to buy. But when the home you want to buy comes on the market, and you look at it on the first day and decide you are ready to make an offer - I'm going to tell you that we probably won't be successful in securing a contract to buy your new home unless you have your current house under contract. So then we'll speedily get your house on the market. But by the time it is on the market, or by the time it is under contract, the chances are that the house you wanted to buy will then be under contract to another buyer. Ugh. So -- what is someone in this situation to do? Option 1 - Do what is described above, and hope you get lucky. Wait to list your home until you see something you really want to buy. Hope that nobody else wants to buy it, somehow. List your home. Get a contract in place on your home. Make an offer on the house you want to buy. But perhaps you'll try Option 1 a few times and fail - losing the house to another buyer, which leaves you with two other options... Option 2 - Secure financing to buy a new home before having sold your current home. This way you can commit to buying the new house before having a contract on your current home. That isn't a possibility for all buyers, so you may also have to consider... Option 3 - Be willing to move twice. List your home for sale, when you get an offer, ask for a longer than normal closing timeline - perhaps 75 days instead of 45 - 60 days. Then, hope that the house of your dream comes up for sale in the subsequent 30 days so that you can contract to buy the new home and close on them simultaneously - but be ready, willing and able to move twice if you need to do so. You may, with this option, have to move out of the home that you own - because you sold it - before you have found and secured a contract on the new home you'll be buying. This might mean moving in with family, and it might mean renting before buying the next home. In the end, given how quickly the market is moving, you may have to decide if you are willing to move twice in order to make a transition to your next home. | |
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Home Buyers Were Busy In March 2019 |
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 I'll publish my full monthly market report later this week, but wow, home buyers were busy in March! After the usual slow start to the year with 84 contracts in January and 92 in February, things started to pop in March -- with a sharp uptick to 134 contracts. For some context: JANUARY: This Year = 84 contracts Last Year = 85 contracts FEBRUARY: This Year = 92 contracts Last Year = 90 contracts MARCH: This Year = 134 contracts Last Year = 128 contracts So -- thus far it seems that this may be another robust year of home sales in Harrisonburg and Rockingham County. | |
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How To Be The First To Know About New Listings |
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 The market is moving QUICKLY -- homes are often going under contract in a matter of days instead of weeks -- so it is essential that you know about new listings immediately when they hit the market. Most of my clients use NewListingsInHarrisonburg.com to keep track of new properties coming on the market in Harrisonburg and Rockingham County. You can quickly and easily scroll through the most recent residential listings in Harrisonburg and Rockingham County, view the pertinent details, all of the photographs of the home, an area map, and then quickly and easily share that new listing with a friend, your spouse, your Realtor, etc. You can also sign up to receive an email alert every time there is a new listing....  Check it out, at NewListingsInHarrisonburg.com. | |
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There Are PLENTY Of Buyers In Our Local Market, Ready To Buy |
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 On one of my recent listings we received three offers within the first week. On another, we -- again -- received three offers within the first week. And on a third, we received seven (!!!) offers within the first two days. These 13 buyers were all ready, willing and able buyers - anxious to buy a home. They came to see the listings in the first day or two (or three) that they were on the market. Most of them had already talked to a bank or mortgage company to become prequalified. They made serious, reasonable offers - some with escalation clauses. And yet -- only three of the 13 would-be buyers were successful at securing a contract to buy one of these homes. My main conclusion - there are PLENTY of buyers, ready to act. I suspect we will continue to see homes go under contract quickly (often with more than one offer) when they are prepared well, priced well and marketed well. To the other 10 buyers -- I only wish my clients had duplicates of their homes to sell to you -- and I feel for your plight. Several of these would-be buyers had already made another offer on another house in the recent past and missed out on that one as well. | |
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Your Ability To Buy Your Dream Home May Have More To Do With Others Than Yourself |
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 Imagine that you *finally* find your dream home this Spring or Summer. I hope you do! But then, imagine that, despite your best efforts, you are not able to buy it - you do everything you can, but factors outside your control limit your ability to make that dream home YOUR home...
As you can see, there are any number of reasons why your ability to buy your dream home might have more to do with others than yourself. Sort of reminds me of the Serenity Prayer that my parents had hanging on the kitchen wall when I was growing up... God, grant me the serenity to accept the things I cannot change, Courage to change the things I can, And wisdom to know the difference. I know, I know, it's not always possible to achieve serenity in the current strong seller's market -- but just keep in mind that there could be some factors that affect your ability to buy your dream home that - again - have more to do with others than yourself. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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