After several years in a row of relatively similar sized classes of first year students at JMU, the first year headcount will jump up a bit this coming year, as shown above. 



Despite this jump in first year students, the overall growth trajectory will stay relatively similar to what JMU has experienced over the past several years.

These increases in enrollment will (gradually) help the over-supplied student housing market in Harrisonburg.  If you haven't heard, there are many more places for students to live than there are students.  (read up here)

These increases are also (continued) great news for the local economy, as JMU is a major economic engine for the local economy -- as both students and faculty/staff live here, work here, spend here, etc.  This is not, of course, to ignore the significant contributions made to our local economy by Bridgewater College, Eastern Mennonite University and Blue Ridge Community College.

The data for the graphs above is based on JMU's enrollment projections.  "Total On-Campus Headcount" is the number of students who are taking classes on the JMU campus.
 

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Some sellers might despair when they see that the average days on market for homes sold thus far in 2012 is a whopping 229 days.  Wow!  But wait....



Don't despair yet -- the above analysis is based on listings that have sold in the past six months, and you should take note that....

• Nearly one-third of the houses that sold did so in less than 90 days.  That's 90 days from list date to close date!
• Nearly another third of the houses that sold did so in the next 90 days. 
  

The lesson here is the importance of pricing correctly from the start in order to sell in a reasonable time frame.  So....don't despair thinking that you'll likely have to wait 8 or more months for your house to sell...and don't price it so that you will end up waiting that long!

  

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The graph above shows the average number of home sales per month (in each of four price ranges) when evaluating a 12-month time period.  For example, the last data point shows the average number of home sales per month for May 2011 - April 2012. 

As is quite evident, the recovery (in the pace of home sales) is more pronounced in the lower price ranges. 
  

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Let's suppose you have a house listed for sale for $300K. But keep in mind that you just lowered it to $300K from it's previous price of $309K.

How would you respond to an offer of $270K? 

You probably consider $270K to be way too low of an offer, after all you just reduced you price from $309K.  These ridiculous buyers are offering you $39K less than your asking price last week.  Certainly, you should be able to sell for around $295K, right?

Well, maybe not.  In the last 365 days, properties in Harrisonburg and Rockingham County sold for an average of 95% of their last list price. That means that if $300K is a fair asking price, you should probably expect to sell for around $285K -- if you hit that 95% average.

Then, all of a sudden, maybe the $270K offer on a $300K list price isn't too low at all.  If you met in the middle, after all, you'd be right at that 95% mark.

So....let's make it really hurt....how would you respond to an offer of $250K??

The same logic above applies here -- if your house is an average performer, you'll end up selling for $285K.  And the $250K again probably seems waaaaay too low.

But what if your house still isn't listed at a fair price?  If nobody comes to view it over the next month, it may still be overpriced.  Then, perhaps you'll find yourself lowering the list price to $290K.  And then, of course, you might sell for that 95% average and end up at $275,500.

So.....if you're listed at $300K and you might (a month+ from now) end up at $275K....perhaps you shouldn't turn up your nose at that $250K offer.  See how high they are willing to go. . If you can get them up to $275K, you might want to consider taking it (bird in hand!  bird in hand!) -- and if their super low offer of $250K was just to try to get you down to $280K or $285K, all the better!

As a seller, don't be discouraged about what you view as a low offer -- after all, it's an indication that somebody really wants to buy your house.  Don't let those buyers slip away --- negotiate creatively and try to get to a reasonable and mutually acceptable price.
  

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Timing is everything when it comes to real estate.  For example, 2006 was not the best time to buy, and 2011 was not the best time to sell. 

But moving beyond those obvious realities, it is wild to see how the timing of offers can affect listings that have been on the market for "quite some time" -- sometimes defined as 6+ months, sometimes 12+ months, and sometimes even 18+ months.

I have had two situations thus far this year when listings had been on the market for "quite some time" with no offers at all, and all of a sudden, two offers were received within the same week.  It is quite a strange situation....

• Sellers are typically quite excited, even though a bit baffled.
• Both prospective buyers are somewhat skeptical of how such a circumstance could truly be happening.
• Negotiations return to the days of countering to one buyer, and then potentially to the other, to gauge which has the most interest in making a deal work.

Now, let's be clear here -- multiple offer situations used to involve ultimate sales prices at or above the list price -- and that is rarely happening these days in multiple offer scenarios.  However, sellers in such circumstances are certainly selling for a bit more than they would have if both offers had not happened to come in simultaneously.

 

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Mortgage rates hit all-time low again: 3.83% on 30-year fixed rate.

WSJ: Home prices rise in most of United States.

NAHB: Harrisonburg added to list of improving markets.

Gas prices drop again

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At some point, we will look back at early 2012 and marvel at how inexpensive money was at the time.  After all, for over six months now, mortgage interest rates have stayed at phenomenally low levels – right around 4% for a 30-year fixed rate mortgage.  While these interest rates won't necessarily disappear tomorrow, it is important for homeowners and would-be homeowners to consider whether current interest rates should prompt some action or decision today, rather than six months from now.

Countless homeowners have found great benefit in refinancing their current mortgages, often against all odds.  Today's low interest rates can make significantly lower your monthly housing costs depending on your mortgage's current interest rate.  Many homeowners assume that they will not be able to refinancing their home if it has declined in value since they bought it, but this is not always the case.  Several new programs, such as the Home Affordability Refinance Program (HARP) create provisions that may allow you to refinance your mortgage even if you owe somewhat more than the current value of your home.  If your current mortgage interest rate is 5% or higher, I would recommend that you meet with a local lender to discuss your options in the current mortgage market.

Beyond refinancing your current mortgage, today's interest rates offer a fantastic opportunity for would-be homeowners.  As you may recall, some buyers felt priced out of the home of their dreams a few years ago during the real estate boom as home prices increased quickly.  Those same buyers are now finding themselves priced back into the home of their dreams given both market adjustments (lower prices) and lower mortgage interest rates.  After all, a $200,000 home five years ago with a 5.5% interest rate would have carried a cost of over $1,000 per month including taxes and insurance, and provided you were making a 20% down payment.  That same house today, if purchasable at only $175,000, would have a monthly cost of less than $800 per month.  

Some home buyers are taking advantage of these low mortgage interest rates to get into a modest home, with a much lower monthly payment than they anticipated.  Other buyers are taking the opportunity to buy a larger or nicer home than they anticipated being able to purchase – so that they will be able to stay in the home for a longer period of time.  Whatever the decision as to how you make use of your broader financial capabilities, the key realization for today's home buyers is that a home purchase during 2012 allows you to lock in your housing costs for the future at what may be the lowest possible point we'll see anytime soon.  Based on recent market analysis, home prices seem to be starting to steady themselves – thus, one year from now, you will likely not be able to buy a home at the same low prices as are found today.  Combine this with somewhat higher interest rates that are bound to eventually materialize and it creates a unique window of opportunity for today's home buyers.
  

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Many aspects of the local housing market have improved over the past year, and there are signs that this gradual recovery will continue.



As shown above, most market indicators are positive when looking back at recent real estate activity in Harrisonburg and Rockingham County:

1. April home sales were lower than last April (-8.97%) but that was likely a result of many 2012 buyers committing to properties earlier due to our unseasonably warm winter.
    
   
2. Year-to-date home sales have improved 2% over the same time period during 2011.  We must continue to see increases in the pace of home sales for further strengthening of the local housing market.
     
   
3. Median sales prices have increased 4% when comparing the first four months of 2012 to the first four months of 2011.  The true test will be whether this increase in prices can continue throughout this calendar year.
     
   
4. Average sales prices have also increased (1.3%) when comparing 2012-YTD to 2011-YTD.
    
   
5. The average time it takes to sell a house (229 days) has increased slightly (from 218 days) when comparing 2012-YTD to 2011-YTD.

As another sign of an improving real estate market, inventory levels have dropped 15% over the past year, despite recent seasonal increases.

Long term trends shown above (rolling 12 month calculations for sales pace and price) also indicate that the local housing market is stabilizing (price) and starting to grow (pace).

Also, despite prior warnings of potential increases, mortgage interest rates remain extraordinarily low.

There is plenty more to read, analyze and understand.  Click here (or on the market report cover above) to download my full monthly market report.

And -- if you have questions about the local housing market, 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.
  

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18MB down and 12MB up is quite an improvement over 3G speeds.

I ran this speed test in Harrisonburg, despite the fact that it is labeled "Washington, DC" on the app.  I suppose Harrisonburg is a part of Verizon Wireless' Washington DC network now.

You do, of course, need to have a device capable of running on the new 4G (LTE) network.
  

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Plenty of townhouse buyers from the past five years would now like to sell their townhouse and move up to a single family home.  But it has been difficult to do so recently because of adjustments in townhouse values.



Thus, I have counseled many townhouse owners that if they really want to move up to a single family home, that they ought to seriously consider leasing their townhouse instead of selling it.

This doesn't work for everyone (especially if you need to free up some equity in your townhouse) but it can be a great long-term decision.

Read about how unwillingly keeping your townhouse might be your best (unintentional) financial move yet to see how the owner of such a townhouse could potentially experience $230,000 of gain over 30 years of owning the townhouse.

If you can't sell, you should seriously consider leasing your townhouse, and I'd be happy to help you analyze the opportunity to see what would make the most sense for your situation.
  

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photo by digitalmoneyworld

According to a recent survey by Gallup, Americans value gold as the best long-term investment, with real estate coming in second place, followed by stocks.



Read the entire story here.

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If you haven't connected with i love my burg, check it out today.



It is an entertaining blog featuring many restaurants, venues and businesses in Harrisonburg with excellent photography and engaging commentary.  Recent topics have included the Capital Ale House, First Fridays, Kopecky Family Band at Clementine, MaCRoCk, Mint, Rock Lotto and Union Station.

Visit www.ilovemyburg.com, or on Facebook.
  

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The chart above is calculated based on comparing this year's median sales price to the median sales price in each of the prior eleven years.

Several key points to take away from this chart....

• For many, many home owners, this chart may have very little pertinence to the value of your home.  These calculations are based on median sales prices, and your home (and/or neighborhood) may have performed VERY differently during any of these time periods.
    
  
• If you bought your house between 2005 and 2008, it's a tough time to try to sell.  (Hopefully, that's not news to anyone.)
   
  
• Home values are still declining (year-over-year), so despite today's buyers getting great deals on their houses, they still need to plan to be in them for at least five years to be sure to see gains in their home value.
   
  
• If you bought in 2004 or prior, you should do just fine if you are selling today.
  

But again, the most important point is that while this might provide a general guide to what has happened with home values over the last decade (+), every home and neighborhood is unique.  Let's chat about your specific house if you want to know what it is worth in today's market.
  

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I have had five transactions thus far this year where this dynamic seems to be at play....

The diagrams above are not showing the new reality for all lenders --- it is just a reflection of my experience with many lenders recently. 

For whatever reason, (many) lenders (on many transactions) seem to be waiting to order an appraisal until they have completely finalized the approval of the borrower. 

This is problematic for several reasons:

• Sure, if a borrower can't be approved the deal won't close, but if the appraisal is not satisfactory, the deal also won't close.  Why, then, must we wait so long to order the appraisal?
• Sometimes the final approval of the borrower can drag on (and on and on) --- which delays (and delays and delays) the ordering of and completion of the appraisal. 
  

If you're buying a house, make sure your lender orders your appraisal as soon as you have made loan application --- especially since the fee that you pay at application is at least partially for the appraisal. 

If you're selling a house, don't assume that the appraisal has been ordered as soon as the buyer makes loan application.  Follow up and make sure that the appraisal is ordered ASAP.

If any lenders can explain why this is happening, or provide any good reasons for it happening this way, I'm all ears.

  

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OK, admittedly, I don't have any data readily available to back this one up -- but in almost all cases, it seems that a quick 6% price reduction (for example) will work better than two 3% price reductions over time.

For example, the quick six.....

• House is listed for $300K on January 1
• House is reduced to to $280K on March 1 (roughly 6%)

As compared to....

• House is listed for $300K on January 1
• House is reduced to $290K on March 1 (roughly 3%)
  
• House is reduced to $280K on May 1 (roughly 3%)
  

Unless you think you have a great chance of selling the house after just one of the 3% price reductions, it's almost always better to make a faster, larger price reduction.  This price change is more noticeable to buyers and more quickly gets you to a what will hopefully be a realistic selling point.

As a further example, I have seen sellers who have knocked off $5K every other month for an entire year.  Oh, how I wish they had just knocked off $30K that first month.  Each of the progressive $5K reductions had very little impact -- but a quick $30K reduction would have been much more news-worthy and may have inspired a buyer to act.

  

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Some houses will sell quickly, even in a buyers market.  As per the above article, these houses sell quickly because they are in under-supplied segments of the market.

Other houses are in adequately-supplied or over-supplied segments of the market.  Then, even with a great list price, a speedy sale is not at all guaranteed.  A house can be reduced to what seems to be a reasonably good deal for buyers, but a buyer might still not jump....

• if the floor plan isn't what they're looking for
   
  
• if the finishes and materials aren't what they're looking for
   
  
• if the location isn't what they're looking for

Let's imagine a house with a market value of $300K.

• Initially listed at $309K, the seller was hoping a buyer would come along to negotiate a deal of $295K or $300K.  It didn't happen.
   
  
• The seller then reduces the house t o$295K.  Given assumed negotiating room, the house might now be purchased for $10K - $15K below market value.  But if there isn't a buyer in the market looking for the seller's combination of floor plan, finishes and location (among other things), the house still might not sell.
   
  
• In some ways, the margin would have to be even greater to get one of the buyers currently in the market to jump.  Perhaps a list price of $280K with an assumed potential purchase price of $270K-$275K might make a buyer look past what they really want as to floor plan, finishes or location.

As a seller, listen carefully to buyer feedback.  If you have a buyer who likes the floor plan, finishes and location, don't let them disappear based on price -- encourage them to MAKE AN OFFER.  But if most buyers who come to see your home have feedback related to floor plan, finishes or location, don't assume that lowering the price by $10K or $15K is necessarily going to reel those would-be buyers back in.

  

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I suppose it was helpful from a very short-term perspective --- it gave the market a boost between 2009-Q3 and 2010-Q2.  But those artificially elevated sales levels didn't last -- sales declined to even lower levels after the tax credit than where they had been before it.

Thankfully, the last year has shown steady growth in the number of home sales in Virginia, without the assistance of the tax credit.
  

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"In its latest construction forecast, the NAHB on Wednesday stuck to its guns that "underlying fundamentals" such as low mortgage rates, decent economic growth, and pent-up demand for housing will drive double-digit percentage increases in home starts this year and next, and reverse catastrophic declines in new and existing home sales."

Read the entire story at Builder Online.
  

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From the Virginia Association of Realtors, Pace and price of home sales increase in Virginia during Q1 2012.  Read on....

The First Quarter 2012 Virginia Home Sales Report has been released and brings good news for the Commonwealth! Several long-term trends indicate that Virginia's housing market is continuing to stabilize.



As shown above, the pace of home sales in the first quarter of 2012 marked an improvement over both the first quarter of 2011 and 2010.



The median residential sales price has increased 2.4% in Virginia over the past year despite a slight (-0.5%) decline over a three-year time period.

Download the full First Quarter 2012 Virginia Home Sales Report to find out more about how different regions in Virginia fared in the first quarter of 2012.
 

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