This is one economic indicator that I am happy to see heading downward.  There are still lots of people who are not able to find work, but this trend is headed in a great direction.
  

In another positive sign for Virginia's economy and thus housing market, there seem to be more people moving into Virgina than out of Virginia.

Of note, Virginia is one of only 9 states where this is the case!

Source: KCM Blog
 

Looking for a job in Harrisonburg or Rockingham County?  Here are the 50 largest employers....

1. James Madison University
2. The Rockingham Memorial Hospital
3. Rockingham County School Board
4. Cargill Meat Solutions
5. Wal Mart
6. R.R. Donnelley and Sons Company
7. Harrisonburg City Public Schools
8. Great Eastern Resort Management  (Massanutten Resort)
9. Merck & Company, Inc.
10. Aramark Campus LLC  (JMU Dining)
11. Marshall's
12. Fairfield and Sons, LTD  (Rosetta Stone)
13. City of Harrisonburg
14. Perdue Products
15. County of Rockingham
16. Tenneco Automotive Operations
17. Pilgrims Pride Corp
    
18. Va Poultry Growers Coop Inc
19. Eastern Mennonite University
20. Millercoors LLC
21. Stellar Management Grouping
22. Dynamic Aviation Group
23. George's Foods
24. Beam Brothers Trucking
25. Whitewave
26. Virginia Mennonite Retirement
27. Riddleberger Brothers, Inc
28. Sysco Food Services
29. Bridgewater College
30. Food Lion
31. Great Eastern Resort Corporation  (Massanutten Resort)
    
32. Sunnyside Presbyterian Home
33. Ntelos Wireless Dip Inc
34. Bridgewater Home, Inc.
35. Cargill Turkey Production
36. Owens Brockway Plastic Products
37. Tenneco Packaging
38. Warsaw Health Care Center
39. Lowes' Home Centers, Inc.
40. Pleasant View Home for the Handicapped
41. Shenandoah Growers Inc
42. Postal Service
43. Costco
44. McDonald's
45. Tyson Farms
46. Rockingham County Community Services Board
47. Comsonics Inc.
48. Pactiv Corporation
49. Martin's Food Market
50. Massanutten Ski Lodge
    

Source:  Virginia Workforce Connection
   

If you don't have a job, it's hard to buy a house.  If you lose your job, it's often hard to keep your house.  Thus, it is welcome news for the housing market to see the unemployment rates continuing to drop on the local, state and national levels.  Yet another indicator that we should see a further improved local housing market in 2012.
 

In very good news for the local housing market, foreclosures are declining in Harrisonburg and Rockingham County.  The graph above shows the number of Trustee Deeds recorded at the courthouse per year for 2008-2010 and the number recorded in the first ten months of 2011.

It is clear that 2011 has marked a sharp turning point in the foreclosure rate in our local area.  While we are not yet back to historically normal rates (70-100 per year), we have turned the corner from the peak of 270 in 2010.
  

Click here to download my full market report (27 pages, 7 MB, PDF) or read on for highlights....



October was a relatively positive month for the local housing market:

1. Home sales increased 8% in October as compared to last October.
2. Year-to-date home sales increased 3% over 2010 sales levels.
3. Year-to-date median sales prices declined 3% as compared to one year earlier.
4. Average days on market increased by 8%.
   

Despite some negative trends (#3, #4 above) the positive trends (#1, #2 above) are an indication that we are likely in the early stages of recovery for our local housing market.



A strong sign of strength to come in the local housing market, October 2011 was a great month of buying activity, with 84 buyers committing to buy homes in Harrisonburg or Rockingham County.  This marks a 65% increase in buyer activity as compared to October 2010!



Trends are very slow to reveal themselves in annualized sales figures (shown above) because they are an indication of 12-month rolling averages.  That said, it seems that it may be a safe bet that home sales and home prices are on the mend when examining the graph above, which has now been showing increases in these long-term indicators for four months.



Some price ranges are recovering more quickly than others.  The graph above shows that the price ranges under $300K have been starting to see increases in sales over the past several months.  This should eventually roll over into the higher price ranges as buyers move up the price spectrum.



For an even more in-depth look at the Harrisonburg and Rockingham County real estate market, click the image above to download my full market report (27 pages, 7MB, PDF).

If you have questions about the report, or if I can be of assistance to you with real estate that you own, or that you'd like to own, please be in touch.  You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com. 
 

Probably not, but there is still some exciting Siri-related news for our local economy....



Known facts....

Siri is a revolutionary personal assistant application on the recently released iPhone 4S.

Apple bought Siri in April 2010.

Siri was developed as a project of SRI International.

SRI International opened a campus in the Shenandoah Valley in 2009.

So....what does it mean?

OK, admittedly, SRI Shenandoah Valley might not develop a component of the next iPhone, but I think the storyline above points out the enormous upside potential of this developing research and technology company right here in Rockingham County.

Per the Shenandoah Valley Partnership, SRI's Center for Advanced Drug Research (CADRE), will focus "on improving the productivity of the pharmaceutical industry, helping the nation respond to bio-threats, and developing life-saving treatments for neglected and orphan diseases."

I think this is rather exciting for our local economy!
 

Virginia Sets Example for Cash-strapped States

"Gov. Bob McDonnell announced that Virginia ended the fiscal year with a $311 million surplus yesterday. And for the second year in a row, Virginia ends the fiscal year with a revenue surplus, not a revenue shortfall. This is great news for Commonwealth residents, and it puts Virginia sharply in contrast with many other states that have seen revenues fall short of projections year after year."

This is great news for Virginia and for Harrisonburg and Rockingham County.  A stable economy leads to job growth, leads to a stable housing market.

Read the rest of the story here, where you'll learn how Virginia was able to finish the year with a surplus!
 

What do you think?  Could real estate be the best buying opportunity of your lifetime? 


  Click on the image above to read this article from Time.
 

Great news -- the local foreclosure rate is on the decline!

There were 270 recorded trustee deeds in Harrisonburg and Rockingham County during 2010.  In the first half of 2011 there were only 105 recorded trustee deeds.

Yet there are some interesting foreclosure sales currently scheduled:

• Portions of Green Springs subdivision
  
• 75 townhome lots next to Beacon Hill Townes
• 162 acres of development land on the south end of Harrisonburg

For currently advertised foreclosure sales, visit HarrisonburgForeclosures.com.

Learn more about short sales, trustee sales and bank owned properties.
 

The median sales price in Harrisonburg and Rockingham County has declined by 11% over the past year from $180K to $160K.  That's a rather significant decline.  But looking closer, it seems that one reason why it has declined as much as it has is because there are more bank owned properties selling this year as compared to last year.



As you can see above, last year (YTD) REO sales only accounted for 8% of all home sales in Harrisonburg and Rockingham County.  This year, however, REO sales account for 14% of all home sales.

The median sales price of the non-REO properties this year is $170,056, whereas the median sales price of REO properties this year is only $129,250.

There are certainly other factors that are causing a decline in median sales price, but the proportional increase in bank owned (REO) sales is certainly contributing to the situation.
 

If the development of Preston Lake had taken place just five years earlier, it might have been a much greater, faster, happier success story. 

Given its timing, however, Preston Lake was developed and constructed at a very slow rate, which recently reached a significant milestone when Wells Fargo foreclosed on the remaining developed lots at Preston Lake.  Why did it happen?  It could have been the decline in the housing market....or the decline in the national economy....or that the developer's bank (Wachovia) went out of business....or many other reasons. 

Regardless of the cause, the development and construction of Preston Lake was much slower than anticipated, and is now in a state of limbo.  Here's a re-cap of where things are at Preston Lake, with a few bits of new information:

Homeowners Association:  The Preston Lake Homeowners Association is still controlled by the developer, which is now effectively Wells Fargo.  For now, however, the on-the-ground association management is being handled by a Harrisonburg-based association management company, and thus far it does seem as if any services to residents will be interrupted, nor will dues increase.

Ownership of the Land:  The undeveloped residential lots all transferred to Wells Fargo (or REDUS VA HOUSING, LLC as it appears at the courthouse).  Read more.

Ownership of the 4 rowhouses:  Most people attending the foreclosure auction were surprised to hear the announcement that morning that separate from the auction of all of the undeveloped lots, the bank would be auctioning off four rowhouses at various states of completion.  Since potential bidders were not prepared to consider purchasing a rowhouse, all four of these properties were bought back by Wells Fargo.  Further details follow....

• Lot 9C:  This rowhouse is completely constructed, and was actually used as a temporary residence for a couple that then later bought a rowhouse at Preston Lake.  Wells Fargo contracted (at the trustee sale) to buy this rowhouse for $270,600 and it transferred to them as of late February.  Presumably, this property will soon be listed for sale with Wells Fargo as the seller.
   
  
• Lot 10B:  This rowhouse was framed, and the exterior shell was complete, but neither the insulation nor the rough mechanicals were installed.  Wells Fargo contracted (at the trustee sale) to buy this rowhouse for $39,960, however another party (Southern Classic Inc) later contracted to buy it instead, and closed on the purchase a few weeks ago (March 4th, 2011).
   
  
• Lot 11C: This rowhouse was complete through drywall, but had a variety of trimwork, flooring, and other finishing work yet to be completed.  Wells Fargo contracted  (at the trustee sale) to buy this rowhouse for $157,760, however another party (Southern Classic Inc) later contracted to buy it instead, and closed on the purchase a few weeks ago (March 4th, 2011).
   
  
• Lot 12C:  This rowhouse was complete through drywall, and rough mechanicals, and insulation, but the entire remainder of the townhouse was yet to be constructed.  Wells Fargo contracted (at the trustee sale) to buy this rowhouse for $79,080, however another party (Southern Classic Inc) later contracted to buy it instead, and closed on the purchase a few weeks ago (March 4th, 2011).

Southern Classic, Inc:  The company that purchased the three yet-to-be-finished rowhouses seems to be a company based out of Crozet/Charlottesville.  Presumably, Southern Classic will be finishing the rowhouses and offering them for sale.  Southern Classics is an Earthcraft certified builder, and is involved in developing several smaller communities including:

• Foxchase Landing (Charlottesville)
• Fair Hill Estates (Crozet)

Current Listings:  Three re-sale properties are currently on the market.  Click here for details.
  

Despite many negative indicators in our local housing market, there may be hope for better news in the coming months.  Click here to view a PDF of my most recent market report on the Harrisonburg and Rockingham County Real Estate Market, or read on for several excerpts....



As can be seen above, sales have dropped significantly as compared to a year ago -- both in February alone (28% decline) and in year-to-date figures (21% decline).  Furthermore, we continue to see declines in both median sales prices (3% decline) and average sales prices (2%).  As would be expected, this has lead to an increase (21%) in the time it takes to sell a house. 



Above you will note that January home sales (39) were roughly equivalent to previous years' January sales.  February 2011 home sales however (38) were significantly lower than February sales in 2008, 2009 and 2010.  Thus far, the trend line for 2011 home sales is headed in the wrong direction -- if you're one of those people who likes to see positive improvement.!



The pace of home sales has declined steadily for three years (orange line above), as has the median sales price in this area (green line above).  Of note, the median sales price has actually stabilized and increased somewhat over the past six months.



Above (in red and blue, instead of silver) is the silver lining of this month's housing market report.  Buyers were out in full force in February 2011 --- with a full 69 properties going under contract.  This marks a  44% increase over February 2010, which should lead to strong sales figures in March and April.



There's plenty more news in my monthly housing market report -- click on the image above (or here) to download and view the full PDF. 

As always, if you have questions about this report, or if I can be of assistance with real estate that you own, or that you'd like to own, please be in touch.  You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com.
 

I attended a Realtor Association event last evening that featured the delightful music of Glick and Phillips.  I had never experienced their show before, but it was a lot of fun, even if occasionally insensitive or inappropriate.  :)  They played a lot of songs last evening that poked fun at a variety of towns in this area such as Elkton, Grottoes, Bridgewater and Dayton -- but they also performed several songs (such as "It's Beginning to look a lot like Fairfax") that poke fun at the rapid pace of development in this area. 

Had I heard this song five years ago (in 2006) I would have smiled, nodded, and thought -- well, they're right, the rapid pace of development certainly is certainly eating up farmland and creating more and more subdivisions all over the county.  But I had a different response last evening as I realized that the pace of development has drastically slowed down over the past five years. 



As you can see in the graph above, the sale of new single family homes has fallen drastically since a peak of 186 new homes in 2005 down to only 42 new homes in 2010.  Thus, it seems that Harrisonburg's explosive growth into a Fairfax-like metropolis has been delayed or avoided. 

Also, back in 2008 I examined the breakdown of land use in Rockingham County and found that much of Rockingham County will likely never be developed (33% is owned by the government) --- and we still have an extraordinary amount of undeveloped land.



Certainly, though, the source of the Glick & Phillips song inspiration was the creation of so many new subdivisions between 2000 and 2005.  Below you'll see a strong concentration of those subdivisions in the area just southeast of the City of Harrisonburg, bounded by Boyers Road, Cross Keys Road, Route 33 and Port Republic Road.


Click on any subdivision in the map above to jump to active listings in that neighborhood.

Please know that I'm not accusing Glick & Phillips of being out of date -- but I do think the pace of development, and hopefully our community's view of development has certainly shifted over the past five years.  It no longer appears that we are in danger of overtaking Fairfax.  Would you agree?
 

An early rendering of the intended Preston Lake community center

A variety of documents were filed at the Rockingham County Circuit Court on Wednesday, February 23, 2011 finalizing the Trustee Sale of Preston Lake subdivision. 

In Summary:  A trustee sale took place on February 3, 2011 on the steps of the Rockingham County Circuit Court, whereby Wells Fargo (as the only, and thus highest, bidder) contracted to buy back Preston Lake from its developer.  Now, the deeds have been recorded transferring the bulk of the subdivision to Wells Fargo and the common areas to the Homeowners Association.

The Value of 124+ Acres:  The consideration paid by Wells Fargo for the 124+ acres was $3,500,000, but the trustee's deed also indicates that the appraised value is/was $4,530,000.  Somewhat astonishingly, the two loans (notes) that were being foreclosed on appear to have been for a sum total of $20,500,000.

The New Owner of Preston Lake:  The grantee on the deed is listed as "REDUS VA HOUSING, LLC" -- an LLC registered in Deleware.  The grantee's address, however, is Wells Fargo Bank out of Jacksonville, Florida.

Value of the Common Areas:  Per the deed transferring the common areas to the Homeowners Association, the common areas have an assessed value of $323,700.



What Conveyed To The Homeowners Association:  The map above is based on an early engineering plan for Preston Lake.  I have deciphered (to the best of my ability) the deed, and recorded plats for Preston Lake to mark on the map (letters in circles) the areas that conveyed the the Homeowners Association.  Click on the map for a high resolution PDF, and scroll to the bottom of this post for the source files for the deed and plats.

Management of the Homeowners Association:  The Homeowners Association's mailing address is referenced in the deed as the same Jacksonville, Florida address for Wells Fargo.  Homeowners at Preston Lake have been informed that Wells Fargo will be hiring an association management company in the very near future to handle the business of the association. 

What's Next:  Now that the remaining land comprising Preston Lake is owned by Wells Fargo, my assumption is that:

• Wells Fargo will bring in an association management company to handle the association.
• Wells Fargo will market and attempt to sell the entire subdivision to a new developer.
• If the above is not successful, Wells Fargo may attempt to sell individual lots at Preston Lake.
  

Pertinent Documents:

• Recorded Trustee's Deed - 124+ Acres transferring to Wells Fargo
• Recorded Deed - Land transferring to Homeowners Association
• Partial Satisfaction - Liens against land transferring to HOA
  
• Amended and Restated Declaration for Preston Lake
  
• Recorded Section 1 Plat
  
• Recorded Section 2 Plat
• Recorded Section 3 Plat

Further Preston Lake reading:

• Jul 19, 2010:  Sales Updates at Preston Lake in Harrisonburg, VA
• Jan 19, 2011:  Preston Lake Headed To Foreclosure?
• Feb 3, 2011:  Preston Lake Foreclosure Auction Results In $3.5M Sale To Wells Fargo

 

The Preston Lake Trustee Sale took place today (February 3, 2011) at noon, and drew quite a crowd of Preston Lake homeowners, developers, attorneys, Realtors, and neighboring landowners.  Here's an overview of where things stand....

Local History in the Making:  It's not necessarily the good type of history, but this was the first major subdivision --- and hopefully the last --- to be foreclosed on in the Harrisonburg area.  Many other areas across the country have seen multiple large subdivisions be foreclosed on, but until today, Harrisonburg had been unscathed.  The timing of the development of this subdivision is likely what led us to today's events, as the development began just as the housing market began to slow dramatically.

Only One Registered Bidder:  Only one individual registered as a potential bidder at the sale (by showing his deposit check to the Trustee, and providing his name), though he did bid during the auction, likely because of the opening bids from Wells Fargo.

Only One Actual Bidder:  There was only one actual bidder....Wells Fargo.

Surprise Rowhouse Auctions:  In addition to the 120+ acres of land at Preston Lake that were auctioned off today, four rowhouses were also auctioned separately.  This was not specifically advertised -- if it had been, I think we would have seen some actual bidding take place.  Each of these rowhouses are at a different stage of completion, but each at least has the shell completed.  The opening bids from Wells Fargo were as follows, and these are the prices at which they are taking back the properties:

• Lot 9C -- $270,600
• Lot 10B - $39,960
• Lot 11C - $157,760
• Lot 12C - $79,080

A Hefty Price For 120+ Acres:  It wasn't too surprising that there were not any bidders for the 120+ acres of Preston Lake, as Wells Fargo's opening bid was $3,500,000. 

The Common Areas:  The attorney representing Wells Fargo also indicated that the common areas would be deeded to the Property Owners Association.  The Association will still exist, and owners will still make payments to it to support the maintenance of the common areas and other common amenities of the neighborhood.

What Happens Next:  In theory, within 30 days, Wells Fargo will close on their purchase of the four individual rowhouses, and the 120+ acres of Preston Lake.  The attorney representing Wells Fargo commented to me afterward that he thinks there is a 90% chance that the sale will proceed to closing and that Wells Fargo will be the new owner.  After Wells Fargo owns the property, he indicated that they would sell the four rowhouses individually, and seek to sell the remaining 120+ acres to a new developer.  It is unclear what price they will ask for the remainder of the subdivision (likely lower than $3.5M), and it is unclear what price they will eventually take for the remainder of the subdivision (likely lower than $3.5M).  Wells Fargo's attorney also indicated that while they will attempt to sell the entire undeveloped section of Preston Lake as a whole to one developer, it is also possible that they would sell the property as individual lots or sections of lots.  Wells Fargo has done this with other subdivisions around the country that they have foreclosed on, though it is not their goal.

Wells Fargo is interested in money:  This should come as no surprise, but Wells Fargo's goal in being the new owner of the undeveloped areas of Preston Lake are to try to recoup as much as possible of the money that they have invested in the subdivision.  They won't, thus, try to unload the property for development into a mobile home park -- they will be marketing it and working to sell it for its highest and best use.  This does not mean that the development plan won't or can't change -- but they will be trying to recoup as much money as possible, and thus will be trying to sell it to a developer who has the a positive (and profitable) vision for it.

Those Pesky Lawsuits:  The developer of Preston Lake (Richard Hine) had filed a lawsuit against Wachovia (now Wells Fargo) --- and Wachovia had responded with a countersuit.  Per the attorney representing Wells Fargo, both of those lawsuits will go away once the sale closes, and the property is taken back by Wells Fargo.

A Community United:  If anything, the turmoil and uncertainty over the future of Preston Lake seems to have drawn its residents closer together as a community.  Most of the owners were in attendance at the sale, and then went as a group to Cally's afterward to have lunch.  There seems to be solidarity and general optimism (as much as is possible) amongst most (or all) of the owners.  They still seem to thoroughly enjoy their homes, and each other, which is a positive sign for the future of the community.

Have Questions?  If you have questions about Preston Lake or the foreclosure proceedings, I'm happy to try to answer them (540-578-0102, scott@HarrisonburgHousingToday.com), or you can contact Peter Barrett of Kutak Rock, LLP, who is the attorney representing Wells Fargo.  You can reach Mr. Barrett at 804-343-5237 or peter.barrett@kutackrock.com.

The Associate Press (AP) story below ran a few weeks ago in the Daily News Record.  AP stories often don't reflect market realities here in Harrisonburg and Rockingham County, so I must admit I didn't really believe it to be true in our local area.



This headline came to mind again, however, when I was analyzing the 47 properties to go under contract in Harrisonburg and Rockingham County thus far in 2011.  Each statistic below speaks to the types of properties that are actually selling these days, and the types of buyers that are actually buying.

Of the 47 properties that have gone under contract thus far in 2011....






 

The market is slow, prices have slowly declined for the past few years, and likely will for the next year --- could this still be a good time to buy?  Ali Velshi from CNNMoney.com says yes.  (Thanks for the tip, Sue!)

Velshi's logic is that even if prices fall a bit more, that today's super low interest rates make it a terrific time to buy:


I tend to agree with his logic.  You see, if you're going to be in a house for the next five years, and are considering the purchase of a $250k home, you're better off to buy it today at 4.25% than to buy it a year from now at $240k with a 4.75% interest rate.

Assuming a 20% down payment....

• Your principal and interest on a $250k purchase ($200k loan) with a 4.25% fixed rate would be $984 per month.
• Your principal and interest on a $240k purchase ($192k loan) with a 4.75% fixed rate would be $1,002 per month.

If you have a down payment, and have good credit, and will be staying in this area for the next five years, buying a home may really be a no-brainer!
 

Below you will find several highlights from my December 2010 Harrisonburg and Rockingham County Real Estate Market Report, available as a PDF by clicking here. 

Our local real estate market still has a ways to go before recovering, but there are some positive signs this month.



First, you'll note (above) that home sales increased in November 2010 as compared to the previous month (October 2010).  Sales in November were lower than in November 2009, but last November had the benefit of being the intended deadline for the home buyer tax credit -- thus lots of extra buyers closed in November.



Median sales prices and average sales prices both increased in November (10%, 8%).  This, however, is likely because the median and average sales prices were much lower than normal last November as a result of so many first time buyers closing (on properties with low purchase prices) during November.  Year to date figures still show a 3% year over year decline in prices.



More buyers committed to buy properties in November 2010 than we have seen in the past three Novembers!  Hopefully we'll see a strong December as well.



Click the image above (or here) to review the entire December 2010 Harrisonburg and Rockingham County Real Estate Market Report.

If you have questions about this report, or if I can be of assistance with real estate that you own, or that you'd like to own, please be in touch.  You can reach me most easily at 540-578-0102 or scott@HarrisonburgHousingToday.com.

As I mentioned in my market report earlier this week, fewer and fewer buyers have been present in the market over the past six years (demand fell) but prices have not fallen in the way that that shift in demand would suggest. I'm watching hburgnews to try to learn some answers as well, but here's what I have so far.

1. "We did not have that much of a bubble here, which is why they [home prices] do not need to drop all that much."  (Barkley Rosser)
    
   
2. Buyers in this area stuck to traditional financing and didn't over extend themselves.  (Richard Baugh)
    
   
3. The local job market has been relatively stable, and some folks are still moving into the area.  (Richard Baugh)
    
   
4. Prices are still low in this area relative to larger urban areas where many people relocation from.  (Richard Baugh)
    
   
5. Most sellers aren't distressed such that they have to unload their house in a hurry.  (Richard Baugh)

What can you add to the list?