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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How Is Coronavirus Affecting How Many Buyers Are Buying Homes In Harrisonburg, Rockingham County? |
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 Is Coronavirus slowing down home buyers in Harrisonburg and Rockingham County? It seems it may be, somewhat, but it's probably too early to make any definitive conclusions. Based on the graph above...
Here's another graph that shows looks at the cumulative number of home buyers who signed contracts through the entire year in 2018 and 2019, and thus far in 2020...  Above, you'll note that 2020 is still ahead of 2018 and 2019 when looking at the sum of January through March -- but that 2020 is drifting back downward towards 2018 and 2019. And, plenty disclaimers...
Anyhoo - lots of data, lots of possible conclusions, lots of caveats, and lots to continue to monitor over time. If you're thinking of buying or selling this Spring, let's chat about what makes sense from a timing perspective given continually changing market dynamics. | |
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And Where Do The Buyers Work And What Do They Do? |
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 If you're buying a home, get ready for a few extra questions from home sellers, at least for the time being... Most would-be home buyers in this area seem to be able to continue with their home purchasing plans despite the implications of COVID-19, but it is likely to interrupt some buyers' jobs, and thus income, and thus ability to buy a home. So, if your job IS secure (hopefully most everyone's) and you are getting ready to make an offer on a house, be sure to put some though into how you can best help the seller understand that your job is secure despite the changes we are seeing from COVID-19. And don't be surprised if the seller wants to know ALL about your employer, your job, if you are working on site or from home, if you have had any reduction in your hours, if there is any talk of your job being scaled back or eliminated, etc. Sellers are just trying to do their due diligence to make sure they don't get halfway to closing and then find out that the buyer's income has declined (or has been interrupted) and they can't follow through with their home purchase. Maybe the nice cover letter with a photo of your family and pets that accompanied some offers will now be replaced by a copy of your job description!? :-) | |
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Some Segment Of Home Buyers Will Not Be Able To Buy For A Time |
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 Unless you are paying cash for your next home, you'll need to be able to show your mortgage company that you have a steady source of income with which you'll be able to make your mortgage payments. That source of income is usually going to be from your job. Some jobs are more interrupted by COVID-19 than other jobs. Plenty of would-be home buyers are still working, perhaps from home, perhaps online, or perhaps their job is one that requires them to keep reporting to their place of employment. Some would-be buyers are having their hours scaled back, or are seeing their income decline, based on changes in business operations. So, BUYERS should keep in mind that if your income is (or is likely to become) interrupted by COVID-19 developments, then we may want to press the *pause* button on the home search just for a moment. And SELLERS should keep in mind that there may be somewhat fewer buyers in the market to buy your home if their income has been (or might be) interrupted by COVID-19 developments. Thus far, it doesn't seem that we're going to see most buyers not being able to buy homes because their income is being affected -- but we are likely to see at least somewhat of a decline in buyer activity. | |
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Careful What You Say While Touring A House For Sale |
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 As a buyer, when you are walking through a home, keep in mind that the seller might be listening! These days, there are plenty of ways that a seller could be monitoring their home, with a security camera, or other recording device that could allow them to hear every word you are saying while you are in their house. And, these cameras (or other listening devices) are less and less obvious and less and less expensive! So..... 1. Don't insult their house. It won't help during negotiations.One way around this is to pretend (as a buyer) that the seller is walking through the house with you. By the way, sellers, it may not be legal for you to record conversations in your home while you are gone. You should likely either NOT record conversations, or disclose that it is taking place. P.S. I am not an attorney. Consult one if you want an actual legal opinion. Ask me if you need a recommendation. | |
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Is Social Distancing Keeping Buyers From Buying Houses In Harrisonburg? |
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 I don't think I had ever heard of the concept of social distancing prior to March 2020. Maybe it was a thing, but just not a part of our common vernacular? Anyhow -- it's here now, and real -- but the question that many of you have asked me is whether social distancing is affecting market activity in our area. Above is a first look at that -- and I'm coming to a conclusion of "maybe, maybe not, maybe not yet, who knows" -- so, you're welcome in advance for the great clarity I will be providing here. ;-) The graph above shows the number of contracts that were signed (by buyers and sellers) for houses in Harrisonburg and Rockingham County between January 1 and March 25 of each of the past two years, as well as this year. A few observations...
So, now you see why I concluded what I did...
Anyhoo - we'll just have to continue to monitor the impact of social distancing on our local housing market - but thus far, we have not seen a drastic decline in the amount of buyer activity. | |
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Should I Buy A Home Now? |
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 School is cancelled and/or happening at home for the rest of the year. Businesses are closing. Folks are encouraged to stay at home and certainly not spend time in groups any larger than 10 people What does this mean for someone thinking about buying a home? If you were planning to find a home to buy this Spring, should you keep searching for that home and get ready to move forward with a home purchase, given the current state of affairs? As usual, it depends... Yes, you should buy a home now...
No, you should not buy a home now...
So, plenty of reasons to buy a home right now, and plenty of reasons to wait for a bit. As usual, the right answers for you depends on your specific situation as it pertains to where you are living now, why you want to buy, your plans for the near-term and long-term future, your budget, your overall finances, your current job, your future work prospects, etc. So, if you were planning to buy a home this Spring, let's talk things through and make sure we're thinking about it all from all angles and ensure that you are making the best real estate decision for you given your circumstances and goals. | |
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It Is A Great Time To Virtually Walk Through A Home |
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 It's a great time to virtually walk through a home - given social distancing, and everything going on right now. Here are a few homes where you can do just that...  This beautiful, well maintained, contemporary home in Kentshire Estates with an open floor plan, a stone and brick exterior, an expansive garage, and a finished basement is located in close proximity to Sentara RMH Medical Center. Enjoy upscale finishes throughout, such as hardwood floors, crown moulding, custom cabinetry, granite countertops and much more. The two story great room with a gas fireplace is open to the kitchen and the main level also features the master suite, a home office and formal dining room. Upstairs you'll find three additional bedrooms - one being an enormous bonus room - and the lower level features an open rec room or family room, plus an additional office option, a full bathroom, and storage space.  16 LOUISE DRIVE: Walk Through | More Details This immaculate brick contemporary home in Windsor West is just a short walk away from Turner Ashby High School! Enjoy a grand two-story living room with hardwood floors and a gas fireplace, an upscale kitchen with granite countertops, a pantry and breakfast nook, an enormous family room just off the kitchen, with lots of natural light, a home office at the front of the house and a master suite with a walk-in closet. Don't miss the large laundry room with plenty of cabinetry, three upstairs bedrooms, plus a rec room, bedroom and bathroom on the lower level! Recent updates include a new back patio, new exterior doors and lighting, new carpet, fresh paint, and much more! This home offers lots of storage in the basement!  285 CALLAWAY CIRCLE: Walk Through | More Details This upscale paired home in The Glen at Cross Keys offers low maintenance living with a HardiePlank and stone exterior and a fenced backyard. Enjoy an open floor plan with a two-story living room, gourmet kitchen with plenty of cabinetry, granite countertops, stainless steel appliances and an eat-up breakfast bar, hardwood floors on the main level and a large dining room easily converted to a guest bedroom. The master suite features a separate sitting room or home office, a master bathroom with ceramic tile floors, a double vanity, a shower and a soaking tub. Don't miss the second bedroom suite upstairs, the full bathroom on the main level and the two-car garage! All this in a beautiful, well-maintained community with mountain views! | |
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Buying When Needing To Sell But Only If You Can Buy But After You Sell |
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 If you're looking to buy a house this Spring or Summer -- but -- you own your current home -- this morning's ramblings are for you... Selling (for some houses, in some price ranges, in some locations) can seem like a breeze -- inventory is low, buyer interest is high, homes are going under contract quickly -- all good news for sellers. And buying (for some houses, in some price ranges, in some locations) can be quite difficult these days -- inventory is low, interest from competing buyers is high, homes you might want to buy are going under contract quickly -- all less than exciting news for buyers. And when you wrap those two realities together -- buying and selling at the same time -- things can get tricky. Because it can be hard to find something to buy, many would-be seller-buyers aren't listing their home despite their desire to make a move. After all, they don't want to find someone to buy their home when they don't have somewhere to go. But then, the perfect house comes on the market! So, now what!? Do we quickly (quickly!!) list your home for sale and try to secure a buyer in time to make an offer on your dream house that is contingent on the settlement on the sale of your current home that is under contract? Hoping some other eager buyer has not already secured a contract on your dream house by the time we have your current house under contract? OR -- do we make an offer on your dream home, contingent on the sale of your current home, even though your current home is either not yet on the market or not yet under contract? (Hint, hint - the seller of your dream home probably won't be be interested in this proposal.) OR -- do we make an offer on your dream home WITHOUT a home sale contingency. That was a lot of build up to get here -- but this is the central item you may want to think about as you consider a sale and purchase this Spring or Summer. First - Do you NEED a home sale contingency... This can be pretty quickly determined in a conversation with a lender. Let me know if you need some recommendations of who to call for your next mortgage. They will essentially be asking you questions about your income, recurring monthly debt (house, car, student loans, etc.), and assets (cash) on hand. They'll be trying to determine whether your income (and offsetting expenses) qualify you to get a mortgage to purchase the new home while still owning the current home. Again - this is rather cut and dry from a lender's perspective, so if you're thinking (even a little bit) about whether you could / should / would buy without having first sold, then start with a conversation with your lender. If they can qualify you for a mortgage to purchase your dream home without having first sold your existing home, you will then move on to the next question... Second - Do you WANT a home sale contingency... Perhaps you own a $250K house and you're thinking about buying a $350K house. And perhaps your lender says it is no problem at all - they'll give you a mortgage to buy the $350K house even if you still own the $250K house. And perhaps you are quite certain we'll be able to speedily sell the $250K house. But yet, still, you might decide that you don't WANT a home sale contingency. Maybe you don't want the risk associated with having to pay both mortgage payments until the $250K house sells. Perhaps you don't like the loan terms that will be required on the $350K purchase without having freed up some equity from the $250K sale. Whatever the reason, there may in fact be a reason why you WANT a home sale contingency. Alright - the ramblings will stop for now. As you may have figured out if you made it this far -- selling and buying at the same-ish time can be relatively complex -- and we can't always figure it all out by thinking through a formula or checklist. As such -- if you're thinking about selling and buying this summer, let me know if you'd like to chat more about all of these topics, in person, as it relates to your own particular scenario.
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Mortgage Interest Rates Hit All Time Low at 3.29% |
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 Mortgage interest rates have never been lower than right now. No, really! The current average 30-year fixed rate mortgage is 3.29% and that is the lowest level seen in the 50 years that this rate has been tracked! So, if you're buying a home in the near future, you will be locking in at historically low interest rates. And if your current mortgage is at an interest rate of perhaps 4.5% or higher, it might make sense to refinance! | |
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Is The Perfect The Enemy Of The Good In House Hunting? |
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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? Especially after a long home search process, when a buyer finally finds a house that could actually work -- they might get stuck in trying to determine conclusively whether good is good 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 -- and a great house -- right? Yes, 100%. That said, sometimes 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. But as you mull over that pretty great house, make sure that you are not letting your (perhaps solely theoretical) ideas of a perfect house get in the way of you buying a house that would be a great home for you. | |
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Buyers Of Expensive Homes Are Often Less Willing To Negotiate On Other Home Criteria |
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 Sometimes, if you can't find data to analyze to demonstrate a market dynamic, you should just make up the data or chart. Right? ;-) Well, not necessarily, but maybe just this once? Here's something I observe time and time again...
And it sort of makes sense when you think of it from a price perspective...
And it sort of makes sense when you think of it from a timeline perspective...
As a side note -- this is one of the main frustrations for sellers of "more expensive" homes -- why do all the buyers have to be SOOOO picky? Why aren't they willing to compromise even just a little bit!? Again -- a real phenomenon, but definitely a fake graph. :-) | |
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Typical Obstacles Between Contract and Closing |
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 While every home sale is different -- with unique contingencies based on the needs and situations of the buyer and seller -- there are three main hurdles that most buyers and the houses they are purchasing must clear to make it to closing. So -- where is your contract in this process? Have you cleared 1, 2 or 3 of the hurdles, thus far? There will be plenty of other details to attend to, but these are the three main areas of focus. Evaluating the property condition, the property value, and the buyer's finances.... INSPECTION - This is an evaluation, by a home inspector, of the condition of the house. Clearing this hurdle typically involves requesting that the seller make some repairs to the house (or negotiate further on price) based on new information about the property condition discovered during the inspection process. APPRAISAL - This is an evaluation, by an appraiser hired by the purchaser's lender, of the value of the house. If the property appraises for the contract price (or higher), all is well -- otherwise, the buyer and seller may need to renegotiate the contract price based on the appraised value. LOAN APPROVAL - This is an evaluation, by a lender (and their underwriters) of the purchaser's financial situation. The lender must confirm that the buyer has the income to support the mortgage payment required for purchasing the home. Again - there are many other smaller hurdles (for example, a termite inspection) and larger hurdles (for example, a home sale contingency) that may need to be cleared in your purchase (or sale) of a home -- but these three main hurdles (inspection, appraisal, loan approval) are the three main mileposts during the contract-to-closing process that we'll be focused during the transaction. BUT WAIT -- THERE'S MORE.... Would you rather have three main hurdles to clear, or six? Let's imagine that you receive two offers on your house, which is listed for $250K....
So -- a slightly higher sales price, with a home sale contingency, is not always more valuable to a seller than a slightly lower sales price without a home sale contingency. | |
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March Is Here, New Listings Will Be Coming, Get Ready To Pounce |
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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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Should Buyers In A Low Inventory Market Consider the Purchase of Foreclosures? |
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 With some regularity, I am asked by potential purchasers how they would go about buying a foreclosure. First, here is a list of upcoming foreclosure sales, but more importantly, below is a description of a few ways to buy what you might be thinking of as a foreclosure.
SHORT SALES: While this does not happen as frequently in the current market, sometimes homeowners must sell their home, but market conditions won't allow them to sell it at a high enough price to be able to pay off their mortgage(s). In this example, a homeowner might have a $250,000 mortgage balance but can only sell the property for $230,000. As a prospective buyer, it is sometimes possible to purchase this type of a property through a process called a "short sale." In such an arrangement, the homeowner petitions their lender to accept less than the full payoff of the mortgage and in return to still release the deed of trust so that ownership of the property can be transferred over to you, the new owner. This can benefit the lender, as they skip the time delays and cost of the foreclosure process. This can also benefit the homeowner, as a short sale will have a slightly lesser negative impact on their credit as compared to a foreclosure. As a buyer, however, you must know that there are challenges to buying a property as a short sale. The biggest challenges of late seem to be the uncertainty of the purchase and the time table. Even if you and the homeowner agree to a price of $230,000, the homeowner's lender must still agree to accept that price – since it won't allow the homeowner to pay off their $250,000 mortgage balance in full. This process of waiting to hear back from a lender, and then complying with all of their various terms can sometimes take 60 to 120 days – or longer! TRUSTEE SALES: If a short sale does not take place, and a homeowner is behind on their payments (or not making them at all), eventually the property will be sold by the lender on the courthouse steps. Buying a property at a "trustee sale" can be exciting, and can be a great opportunity – but there are challenges as well. If a property to be sold at a trustee sale is also listed for sale with a Realtor, you can usually view the property ahead of time by calling your Realtor. Otherwise, you will likely not have the opportunity to see inside the property before the trustee sale, and thus you will not know too many details about the condition of the property. Furthermore, your purchase of the property at the trustee sale cannot be contingent upon viewing the property, or inspecting the property. In this instance, you are purchasing the property in "as is" condition, regardless of what you then find out about the property. It is also important to note that many times the lender will have an opening bid at the trustee sale that is close to (or sometimes higher than) the amount that they are still owed on the mortgage. Thus, in the example above, they might make an opening bid of $250,000. As a result of this opening bid process, many (or most) properties available for purchase at a trustee sale are not great opportunities. Occasionally, a property will be foreclosed upon that has had a mortgage in place for many years, whereby the balance of the mortgage is much lower than current market value – these are great opportunities for a buyer. Visit HarrisonburgForeclosures.com for a list of upcoming trustee sales. BANK OWNED PROPERTIES: If you don't buy the property before the auction (as a short sale), and don't buy it at the trustee sale, you'll have a third opportunity to buy it once the bank owns it. These properties are called "bank owned properties" or REO properties ("real estate owned"). Oftentimes, the prices on these properties are quite realistic, if not under market value. It would not be atypical for a house such as the one mentioned above to come on the market after the trustee sale at a price of $210,000. In such an instance, you should expect to be buying the property in "as is" condition, and you will also be buying with a slightly different contract document. Most lenders have a long standard contract or contract addendum that spell out a variety of additional contract terms designed to protect them from any future liability – and rarely will a lender agree to have these contract documents changed in any way. As you can see above, oftentimes buying the property as an REO property is where the best opportunity lies. Visit HarrisonburgREO.com for a list of bank owned properties currently on the market for sale. When a home goes into foreclosure it is often for very sad and unfortunate reasons – such as the loss of a job – and I do not wish such circumstances on any homeowner. However, if you are a buyer in today's market it is important to be familiar with different methods for buying a property when it will be, is being, or has been foreclosed upon. | |
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Tips For Townhouse Buyers In A Competitive Market |
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 Over the past few months I have listed several townhouses for sale that went under contract quickly after a LOT of showings in a very short timeframe. For one such recent property there were six offers within 48 hours. One of the things that struck me as we worked through that process was that there were five other buyers who really (!!) wanted to buy that townhouse and couldn't -- because there was only one townhouse to be purchased. As such, I feel bad for townhouse buyers in the current market. Townhouse buyers have a LOT of competition and I can imagine a single buyer making an offer on multiple townhouses and missing out every time. So, a few tips for would be townhome buyers...
I suppose one critical aspect that I did not list above would be to hire a buyer's agent to represent you in finding, pursuing and purchasing your townhome. I'd suggest you select someone who is highly responsive, professional and knowledgeable about the market. Happy townhouse shopping! (Or may it just not be too unbearably difficult, frustrating and tiring.) | |
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A Full Price Offer Does Not Always Win Negotiations |
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 I don't play poker regularly - though I have played it a few times lately with my kids. When I do play, I can become caught up in my excitement to see a strong hand. Wow! This pot is mine! I am bound to win this time! And often, that might happen with a strong hand in poker -- but not always. Sometimes, another player will have an even stronger hand, and I'll lose despite my strong hand. Here are the rating of poker hands, in increasing strength...
And here are some generic types of offers that might exist on a house, in increasing strength, generally speaking...
That order isn't actually always 100% accurate - it can depend on the property, the seller, etc. But the point should be clear... Even if you make a full price offer, with what would be considered to be normal contingencies (financing, appraisal, inspection) you could still lose in negotiations in several different ways. So -- play your strongest hand, but always know that there could be a stronger hand out there! | |
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How Much Are Sellers Negotiating On Price These Days? |
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 If you're looking to buy a home under $250K, should you only consider homes priced at or below $250K? Probably not - some sellers of homes priced above $250K will negotiate down to $250K. Should you look at homes priced above $500K? Probably not - most sellers of homes priced above $500K probably will not negotiate down to $250K. Both of those are probably obvious to most home buyers, but how do we understand the negotiability dynamics between those two mostly obvious statements? The data above is a first look at that puzzle - with some constraints. Basically, I looked at one year of City/County home sales, but limited it to homes with 1500+ square feet, 3+ bedrooms, 2+ bathrooms, on less than an acre, between $200K and $400K. So, not a canvas of the entire market -- but a pretty reasonable chunk of the middle of our market not likely to be thrown off by lots of investors (lower priced or attached properties) or high end buyers (high priced properties). And - after that intro - here's (some of) what we find...
So - hopefully that provides some guidance as to what you might expect as a buyer. If you see a home listed for 11% above your budget -- there is likely only a 1% chance that the seller will sell at a price that works for you -- or, put another way, you might have to find 99 such properties (where the seller won't come down 10%) before you find the 100th where they will. | |
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The Role of a Realtor in Representing A Home Buyer |
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 Home buyers would be well served to have a Realtor represent them in their home purchase. So, before you call the listing agent to see a home listed for sale, you should understand a bit more about buyer representation.
In representing you in your home purchase, your buyer's agent would be performing tasks such as:
So -- you can call the listing agent (who is contractually bound to represent the seller's best interests) -- or you can hire a Realtor to represent YOUR best interests as the buyer. Clearly, I recommend the second option. Beyond buyer representation, there is a lot more to know about and think about regarding the home purchasing process. Read more at....  | |
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Who Is Winning In 2020 In The Local Real Estate Market? |
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 Sellers are winning - rather universally. Every market metric works in their favor. Buyers are losing - in most categories. Buyers are happy about low rates and low unemployment, but otherwise, all market metrics are working against them. Homeowners are winning - they are indifferent to most market shenanigans - but are glad home values are increasing. SELLER-BUYERS - If you will be a seller AND a buyer -- things may balance out -- you may benefit as a seller and struggle as a buyer. | |
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Home Sales Rise In County, Fall In City |
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 Home sales rose 8% in Rockingham County last year -- from 847 sales in 2018 up to 917 sales in 2019. This is the highest number of home sales we have seen in Rockingham County in at least the past six years. But in the City, it was a different story. Home sales declined 12% in the City of Harrisonburg in 2019, from 459 sales in 2018 down to only 403 sales in 2019. This is higher than some recent years, but the lowest number of homes ales in the past four years. A few more notes...
There are any number of factors that affect whether buyers end up buying in the City or County, including what type of property they are seeking, how much land they desires, school systems, employer locations, and much more. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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