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!
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Are $150K - $250K Detached Homes Available in the City of Harrisonburg? |
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 HINT -- this is a bit of a trick question. Again.... Are $150K - $250K Detached Homes Available in the City of Harrisonburg? Ignore the graph above for a moment -- and let's see what we find.... There are only 15 detached homes currently on the market in the City of Harrisonburg priced between $150K and $250K. Wow! At first blush, this is (or seems to be) very significant. One might conclude that we are seeing a significant under supply of these "mid-priced" homes in the City of Harrisonburg, and assume that this under supply is causing very few of these homes to actually sell. But wait -- looking further (now you may refer to the graph above, thank you for your patience) it seems that plenty of these homes are actually selling. In fact, 130 detached homes between $150K and $250K sold in the City of Harrisonburg last year. The tricky part is this -- if 130 buyers are buying per year, that's an average of 10.83 buyers per month. And thus, if there are only 15 such homes on the market, that is a 1.4 month (42 day) supply of homes for sale. Which is -- rather absurdly low. Most folks consider a six month supply to provide a balanced market between buyers and sellers. So -- yes, homes are SELLING between $150K and $250K -- but they aren't widely AVAILABLE at any given point. When they come on the market, they sell quickly! A few other observations....
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5.5% Increase in Year Over Year Median Sales Price |
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 OK -- a slightly complicated headline -- let's break that down.... Looking at home sales over the past 12 months (Sep 2016 - Aug 2017) in Harrisonburg and Rockingham County -- the median sales price was $196,500. Looking at home sales in the 12 months before that (Sep 2015 - Aug 2016) in Harrisonburg and Rockingham County -- the median sales price was $186,250. As such, we have seen a 5.5% year-over-year increase in the median sales price in our local area. That is accompanied by a 3.3% year-over-year increase in the pace of home sales -- from 1244 sales/year to 1285 sales/year. Read a lot more about our local housing market in my post from earlier this week: Housing Market Slows (but prices rise) in August 2017.  | |
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Housing Market Slows (but prices rise) in August 2017 |
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Find out more about the home shown above, with detached garage and apartment, here. As Geoffrey Chaucer put it - "all good things must come to an end" -- and August 2017 is when the "more and more home sales, every month, for ever and ever" came to an end in the Harrisonburg and Rockingham County housing market. OF NOTE -- this could be a temporary end, and it might be more about a lack of seller supply than a lack of buyer demand -- but I'm getting ahead of myself. I just published my most recent monthly market report, and as usual, you can read on for an overview, download the full report as a PDF, read the entire report with commentary online, or tune in to my monthly video overview of our local housing market...  OK, now, if you're still reading after that super easy opportunity to just listen to me explain the entire market to you, here is some further context and explanation for you....  As shown above (#1), there was a significant (26.58%) decline in August home sales this year as compared to last year. This lead to (#2) an overall decline in year-to-date sales of 3.19% when comparing 2016 to 2017. Despite this slowdown in the pace of sales, the median sales price (#3) is still increasing year-over-year at a pace of 3.68% to the current level of $197,000. Furthermore, the pace at which homes are selling (#4) continues to accelerate -- with a 37.25% decline in median days on market over the past year. So --- slightly fewer homes are selling... faster... at higher prices.  So -- here is the pretty (not pretty) picture of the difference between last year's SOARING month of 158 home sales in August 2016 -- and in comparison, the LOWLY month of 116 home sales in August 2017. Apparently, 158 home sales in the month of August is NOT the norm -- perhaps it was the result of a slow July 2016? AND -- if it is any consolation, the 116 home sales seen in August 2017 is within the range of two of the last three months of August. Hmmm....still hard to get excited about only 116 home sales in August!  Here's another visual example of how things have changed -- every month thus far this year we have been "ahead" of 2016 home sales -- until August. We've now fallen behind (by 3%) and we only have four months to catch back up to match the overall pace of home sales in 2016. I suppose it is worth noting that there was a massive 16.7% increase in home sales between 2015 and 2016 -- so if we fall slightly short this year, it will still mark significant net growth in the pace of home sales as compared to 2014 and 2015.  OK -- maybe I was looking for a bright spot amidst a so-so month of real estate news -- but here you go! As shown above, the median sales price of single family homes has risen 18% over the past three years! Of note -- we're close (but not quite there) to getting back up to the all-time high for our area's annual median sales price for single family homes -- which was $226,800 back in 2006.  OK -- back to the not-quite-as-peppy news -- contracts were down in August as compared to last August. In fact, looking at summer (June, July, August) contracts -- there were only 340 of them signed this year, as compared to 377 last year. Possible explanations for this decline in contract activity include:
 Indeed, as shown above, buyers today have 27% fewer options of homes to purchase in Harrisonburg and Rockingham County as compared to one year ago -- and 36% fewer homes to choose from as compared to inventory levels two years ago. This decline in inventory is likely playing a role in the slight (3%) year-over-year decline we are seeing in home sales in this area. OK -- I'll stop there for now. I will continue to explore the latest trend in our local housing market in the coming days on my blog. Until then -- feel free to download and read my full market report as a PDF, or read the entire report online. And, my reminders for buyers and sellers last month still apply.... SELLERS -- even though it is a seller's market in many 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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New Developments Coming Soon? |
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 Three parcels of development land (see below) are now under contract. Perhaps we'll be seeing some new developments taking shape in and around Harrisonburg soon?  2112 SUNNY SLOPE LN, ROCKINGHAM, VA - 16.91 ACRES - $1,039,000 This nearly 18 acre tract of land is just outside the City of Harrisonburg and offers an opportunity to develop for residential and/or commercial use, subject to rezoning. The property is located on Route 42 with about 450 feet of road frontage near WalMart and beside Harrisonburg Construction. There are three parcels, two currently zoned A2 and one zoned R2. Water & Sewer is available. The property includes a 3,000 sf ranch style residence with a basement and was built in 1960. UNDER CONTRACT SINCE 3/2/2017.  9447 MCGAHEYSVILLE RD, MCGAHEYSVILLE, VA - 21.76 ACRES - $1,250,000 Temporary Price Cut for an Early April Closing! Extraordinary Opportunity! A fully approved Residential Subdivision in McGaheysville and ready to be developed. The site is approved for 84 units (6 single family & 39 duplex lots). It can be constructed in Phases. Full views of Massanutten and the Blue Ridge Mountains. The subdivision includes a roundabout, internal loop road for walking, and riding, a shared access pond/park area. County water & sewer. UNDER CONTRACT SINCE 7/5/2017.  TBD BOYERS ROAD, ROCKINGHAM, VA - 26.27 ACRES - $2,365,000 Prime Development Land. 26 + Acres Zoned R3 on the east side of Harrisonburg on Boyers Road across from Sentara RMH Hospital. Property borders the Massanetta Springs Camp & Conference center property on the east and also has a pond that has water in it most of the year. Could be a great duplex or townhouse development. There is a small barn on the property. UNDER CONTRACT SINCE 9/11/2017. | |
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JMU purchases another property in Forest Hills |
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 JMU has purchased another property in the Forest Hills neighborhood -- as shown above, in purple, with red "JMU" letters. Click here for a larger, updated, version of this map. As per HarrisonburgPropertyTransfers.com.... August 3, 2017 - Richard L. Sheppard to The Visitors of James Madison University, lot at the intersection of Forest Hill Road and Hickory Hill Drive, $308,000.As per my previous article, per The Breeze....
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Out of Date Foreclosure Data on Zillow |
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 The property above looks like a great opportunity, doesn't it? A townhouse at Taylor Spring (median price = $189,250) that is a foreclosure and can be purchased for $146,473? I have had numerous calls about this property over the past few weeks -- and there is only one problem.... The property was foreclosed on back in 2013 (four years ago), then purchased by the current property owner for $172,000, and is NOT for sale -- for $146K or any other price. So -- don't be fooled -- if a property is listed as a foreclosure on Zillow, it very likely was a foreclosed property at some point in the past, perhaps years ago, but chances are it is NOT for sale, and NOT purchasable for the price listed on the property page on Zillow. If you have a question about information on Zillow that does not seem to be accurate, feel free to touch base with me to see if we can confirm or deny that information. | |
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Single Family City Homes Under $200K (even $300K) in Short Supply |
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 Some of these numbers are hard to fathom.... [1] Even though (65) single family homes sold between $100K and $200K in the City in the past year -- there are only (5) such homes available for purchase today!?! [2] Likewise, even though (83) single family homes between $200K and $300K sold in the past year, only (17) are available today. [3] The under $100K market is largely gone for single family homes in the City -- no surprise there. [4] While not shown specifically above (additional math required) a full 79% of single family home buyers in the City in the past year spent less than $300K. [5] Only 9% of City single family home buyers spent over $400K. | |
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Enough Price Adjustments Will Eventually Overcome All Buyer Concerns |
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 My house is next to the railroad tracks, but all of the potential buyers (who did not make an offer on my house) didn't complain about price, they complained about the railroad tracks. My house has an unbelievably steep driveway, but all of the potential buyers (who did not make an offer on my house) didn't complain about price, they complained about the steep driveway. My house is needs many cosmetic updates, but all of the potential buyers (who did not make an offer on my house) didn't complain about price, they complained about the need for cosmetic updates. Guess what --- unless you're going to move the railroad tracks (or the house), flatten the driveway, or make all of the cosmetic updates -- it really is an issue of price! If you're getting consistent feedback about your house that is unrelated to price, in almost all cases, you need to adjust the price to accommodate for that specific issue. If the price is lower then buyers might actually buy despite the specific issue that they were complaining about. | |
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Sellers Paying More and More of Buyer Closing Costs |
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 Nearly half of sellers (46.6%) pay some portion of a buyer's closing costs in the form of a credit at closing. Over the past five years, the number of sellers providing a "concession" of this sort to buyers have stayed between 40% and 50%.  Here's the interesting one -- sellers have paid more and more of a buyer's closing costs over time. The average amount of seller concessions has increased steadily over the past five years. But why, you might ask? It's hard to say exactly -- buyers might be asking for more money, sellers might be agreeing to provide a larger credit, or perhaps the total amount of closing costs that a buyer has to pay is increasing as well?  If, as a seller, you are paying part of a buyer's closing costs, you are most likely to be paying between $4K and $6K --- or between $2K and $4K. And again, as a seller, if you pay part of the buyer's closing costs -- you are not alone -- 45% or so of sellers do so! | |
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Harrisonburg Area High End Home Sales |
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 High end ($500K+) home sales slowed slightly in 2016 (25 sales) as compared to 2015 (29 sales) -- but it seems likely that this price range will rebound to those 2015 levels in 2017. With another four months of sales to go, it seems likely that we will see at least seven (and maybe more?) sales over $500K. In fact, there are currently three homes over $500K under contract.  Home sales over $600K, however, are another story. Looking back, 2015 was an incredible year of sales for this price range -- with 19 sales -- higher than any other year in the past ten years! While we will likely see more sales this year (9 so far) than last year (12 total) it does not seem we will match the 19 sales seen in 2015.  Finally -- the $700K+ price range -- where we seem to have returned to normal-ish levels in 2016/2017. Looking back, it is quite astounding that 11 of these homes sold in 2015 -- this was far and above the amount of $700K+ home sales we had seen in a single year since all the back in 2007. | |
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Pick Sunflowers This Weekend at Hope Field to support RMH Foundation Hope Fund |
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 Have you seen thousands of sunflowers growing in a field at the intersection of Route 33 East and the Connector Road (Stone Spring Road) just East of Harrisonburg? This field is known as Hope Field, and you can stop by this Saturday and Sunday for Frazier Quarry's all-you-can-pick sunflower fundraiser. Per this article from the JMU Breeze.... "The Frazier family will dedicate this year's sunflower harvest to Carla Frazier, a family member who succumbed to brain cancer 13 years ago."So, mark your calendar, and stop by Hope Field this weekend! Saturday, August 26th, 8 AM - 6 PM Sunday, August 27th, 8 AM - 12 PM Per the Facebook event page, be sure to bring your pruners as well as close toed shoes! | |
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Should you buy or rent a townhouse in Harrisonburg? |
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 Given continued low interest rates and some increase in home values, let's take a new look at the opportunities of buying versus renting. RENT = $1050/m. There are regularly options for renting a two-story townhouse in Harrisonburg for approximately $1050 / month in Avalon Woods, Beacon Hill, Stonewall Heights, Liberty Square, etc. BUY = $1012/m. With a 95% loan, buying such a townhouse apparently may cost as little as $1,012 per month assuming a $155K purchase price and a 4% interest rate per SunTrust Mortgage's payment calculator....  This shows a rather small, $38/month, cost savings of buying instead of renting. If we then look at the difference between renting and buying over a five year time period, the advantages start to pile up.  As you can see, this builds a rather compelling case for buying instead of renting if you are going to be living in this potential townhouse for the next five years. Two other factors to keep in mind....
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Fall is not the absolute worst time to sell your home |
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 Fall is, however, the second-worst time of the year to sell your home. :) The data above reflects the timeframe during which properties went UNDER CONTRACT -- not when they closed. Plenty of the Summer contracts turned into Fall closings -- but the 295 figure is a reflection of how many buyers made buying decisions (signed contracts) between September and November of last year. So....if you want to sell your home (and close on it) in 2017, you should be thinking about getting it on the market sooner rather than later. | |
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Bank Owned Properties in Harrisonburg, VA |
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 While there aren't many foreclosure sales scheduled, and we have been seeing fewer foreclosures compared to home sales, there are still a good number of bank owned homes in the system for sale right now. You can always find the most current listing of bank owned homes online at HarrisonburgREO.com. Feel free to contact me if you have any questions about these properties. | |
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Proportional Senior Population Increasing in County, Decreasing in City |
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  The two maps above were generated here based on changes between 2000 and 2014 in the senior population -- those age 65 or greater. A few observations and thoughts....
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Price Per Square Foot Steadily Rising |
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 The price per square foot of homes in Harrisonburg and Rockingham County has been steadily increasing over the past six years....
That said -- while the median sales price ($223K) has nearly climbed backup to the high we saw in 2006 ($227K) -- the median price per square foot ($118) has actually not come anywhere closer to that 2006 high ($129). Which would seem to mean that you're getting slightly more house for your money now (as compared to 10-11 years ago) even if you're paying a similar price. | |
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This is not a balanced real estate market |
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 Most housing market analysts consider six months of inventory (active listings) to be an indicator of a balanced market (between buyers and sellers). The "BUYERS" trend line above is illustrating how many buyers are buying in a six month period. The "SELLERS" trend line above is illustrating how many sellers are in the market (active listings) at any given time. Over the past four years we have seen a steady increase in buyers and a declining number of sellers. In June 2016, these two trajectories crossed, and there was no turning back. There are now many more buyers buying in a six month period than there are homes for sale -- creating a seller's market. Instead of having a six month supply of homes for sale, we now have a four (3.95) month supply. Of note -- it is not a seller's market in every price range, in every location, for every property type -- but overall, we are definitely seeing a seller's market. Find out more about our local housing market by clicking below for my monthly market report.  | |
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Home Sales Steady, Prices Rising in Harrisonburg Area |
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The beautiful home shown above is located in Kentshire Estates. Find out more here. July 2017 has come and gone -- and even if the temperatures don't yet feel like August -- that last month of summer is really upon us. I just published my most recent monthly market report, and as usual, you can read on for an overview, download the full report as a PDF, read the entire report online, or tune in to my monthly video overview of our local housing market...  You'll find that the video is in a new format this month, which I think you'll find much more helpful. Let me know. (click above to watch it) And now, a few items on our overall housing market....  As shown above, home sales slowed, ever so slightly, in July 2017 -- to 114 sales, as compared to 115 last July. Home sales for the entire first seven months of the year, however, remained strong, at 731 home sales -- an increase of 1.39% over the pace of last year's home sales. Also of note, the median sales price has increased 2.41% over the past year, to a price of $195,600 --- and homes are selling 19% faster this year, in a median of 42 days.  And....where do we go from here? We saw strong home sales in May and June -- but then a decline in July that put us in the middle of the pack as far as a typical July. Now, though, will we see a huge bump like last August? Or will home sales stay relatively steady, or even decline, in August?  Based on the slowing rate of buyers signing contracts (shown above) I'm guessing we'll won't see a big upward spike in home sales in August. And perhaps, the slightly slower sales we're starting to see this year is a result of continually declining inventory levels....  While we did see a slight upward tick in our inventory levels in July, overall, buyers still have significantly fewer options when buying in Harrisonburg and Rockingham County. And what does an increasing demand and decreasing supply lead to?  First of all, homes are selling quickly! Over half of the homes that sold in the past year went under contract within 60 days of being listed for sale. Actually, almost half of them (44%) went under contract in less than 30 days!?!  And, not only are homes selling faster, they are selling at higher prices as a result of more buyers and fewer sellers. The median sales price of single family homes has been increasing in recent years, which is likely at least in part due to more buyers buying and fewer sellers selling. Will we see another 5% or 7% increase in this median sales price this year? Only time will tell - but my money is on a 4% - 5% increase. There are actually quite a few astonishing tidbits in this month's report, but I'll get into those in the coming days on my blog. Until then -- feel free to download and read my full market report as a PDF, or read the entire report online. And, my reminders for buyers and sellers last month still apply.... SELLERS -- even though it is a seller's market in many 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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Harrisonburg could never have enough student housing! |
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 OK, OK, that's probably not true -- Harrisonburg probably does not have an infinite need for student housing. Just consider my title, then, to be an intro to all of the alternative perspectives that have been shared with me since I wrote these two posts.... Does Harrisonburg need more Off Campus Student Housing? Does New College Student Housing Increase the Demands on Local Elementary Schools? OK -- here goes -- all the reasons I might be wrong, and all of this new student housing might be OK, or even a good thing.... 1. JMU is growing! All of this student housing is necessary -- JMU is continuing to grow, and they are not building on campus fast enough for their growth, so the private sector must build and rent housing to students in order to meet that growing demand. 2. Denying growth just pushes it elsewhere. If the City decided to stop permitting new student housing communities to be built, that would just push developers to build them in the County, or push students to live in otherwise owner occupied neighborhoods. 3. This is an affordable way to get workforce housing. There isn't much truly affordable rental housing being built -- and older student housing complexes being effectively turned into workforce housing by virtue of students being attracted to new student housing communities is not necessarily a bad thing. It may be the most affordable way to create affordable or workforce housing. 4. Bring on the wrecking ball. If even more student housing is built, the rental rates will fall even lower on the oldest complexes, devaluing those properties to the point where it will make sense to just knock them down and build new housing -- thus, eliminating the older, outdated housing. 5. How much regulation do you want "the government" to do? If the government (planning commission, city council, staff) should start making judgement calls about how much student housing is too much student -- and thus regulating what landowners (and student housing developers) can and cannot do -- should they also start governing other segments of the private sector? Should they regulate how many hair salons exist? How many banks are permitted to operate? How many restaurants can open? How many Realtors can sell homes? :) OK -- again -- I don't necessarily agree with all of the perspectives above, but I believe it is important to consider these counterpoints when thinking about how our community should be planning for the future as it pertains to student housing, land use, property taxes, schools, etc. And, as I mentioned to a reader in response to their comments.... I don't know if new student housing projects should or should not be denied - but I think the local community needs to fully understand the impact of continuing to approve more student housing communities. If older student housing communities become workforce housing, great, no problem -- but let's realize that this is the result of approving new student housing communities, and make sure that infrastructure (schools, for example) are in place for the new workforce housing that we have indirectly created. | |
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Home Buying Pace Slower This July Than Last |
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 16% fewer buyers signed contracts in July 2017 as compared to July 2016. It's hard to say if this is related to lower buyer interest (I doubt it) or lower inventory levels (I suspect it). I suspect we will still end up seeing just as many home sales in 2017 as we saw in 2016 -- but I don't think we'll see a significant increase in the number of homes selling this year. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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