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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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.
OK -- admittedly, it doesn't feel like winter out this week, or in may recent weeks, however, I'll still take this time to note that many of my savvy investor clients wait for these winter/winter-ish months to acquire additional rental properties. Their reasons are pretty logical....
Of note -- this advice is most applicable to townhouse properties that might be purchased by investors or owner occupants. This does not necessarily apply to multi-family properties or student housing properties.
If you are looking for some advice on how to get started with real estate investing, check out HarrisonburgInvestmentProperties.com.
As you'd expect, newer homes sell at a higher price per square foot.
As shown above, the Median Price Per Square Foot of single family homes varies based on the age of the home.
In addition to watching how the median sales price changes over time, it can be quite insightful to see how the median price per square foot of sold homes changes over time. The graph above tracks the median price per square foot of single family homes (not townhouses, duplexes or condos) in Harrisonburg and Rockingham County over the past 14 years.
Price per square foot increased 59% between 2002 and 2006 during the housing boom, but then fell 22% between 2006 and 2011 as the market cooled back off. Since that time, however, we have seen a slow and steady increase in this metric -- from $101/SF in 2011 to $113/SF last year -- which marks a 12% increase over the past five years.
I do not expect that we will see any drastic increases in this metric in the next few years, though an increasing number of buyers (more demand) and significantly fewer sellers (less supply) does make you wonder if we will start to see more rapid increases in sales prices, and thus in price per square foot.
You can now access market reports back to 2013 by visiting HarrisonburgHousingMarket.com.
Whether you are looking for the most recent report, or if you are interested to see how things were looking a few years ago, you are welcome to explore them all.
Also of note, the best ideas for additions to my monthly market reports come from YOU! If you have further questions about our local housing market that are not covered by my monthly market reports, let me know!
As you can see above, Rockingham County is in Zone 1 -- which means we are in an area that is likely to have high radon levels.
What is radon, and what does it mean for you? Read on, from the EPA....
Radon is a radioactive gas that comes from the natural breakdown of uranium in soil, rock and water and gets into the air you breathe. Radon typically moves up through the ground to the air above and into your home through cracks and other holes in the foundation. Radon can also enter your home through well water. Your home can trap radon inside.Learn more about radon and real estate here.
As shown above, the population of the City of Harrisonburg has increased by 11% over the past six years to it's current (estimated) level of 54,224. A few other fast facts from today's Daily News Record article....
Read the full Daily News Record article for much more context and insightful commentary.
Well, things weren't looking so good for a while there. Just after the election interest rates shot up from 3.6% (+/-) all the way up to 4.3% (+/-). In that moment, it seemed that there wasn't any stopping rising interest rates, and we might see 4.5% followed by 4.75% before we knew it.
Now, however, things seemed to have shaken out a bit differently than anticipated (or feared) with interest rates now hovering between 4% and 4.25%. Yes, it was fantastic to have interest rates under 4% for the past year (and more) but if we stay just over 4%, I don't think they higher rates will have a significant negative impact on the buying market in 2017.
Learn more about this month's Featured Property: 141 Diamond Court
I just published my monthly report on the Harrisonburg and Rockingham County real estate market. Jump to the full online market report, watch the video overview below, download the PDF, or read on for highlights....
First, a video overview....
Now, let's take a look at the overall market performance in January 2017....
As shown above, home sales were slightly (3%) slower in January 2017 -- but added to recent strong months of sales to show a 14% year-over-year improvement in the annual pace of home sales. Furthermore, median sales prices have increased 3.78% over the past year -- and days on market has declined by 13%.
Next, taking a look at buyer activity in the way of signed contracts....
As shown above, buyers signed contracts at a slightly slower pace (67 contracts) in January 2017, as compared to in January 2016 -- when 74 buyers signed contracts. That said -- the annual pace of contract activity (1,324 in the past year) is still markedly above the prior year when there were 1,170 contracts signed. We are likely to see a bit more contract activity in February 2017 -- but really see things take off in March if last year is any indication.
BUT NOW -- THE BIG STORY....
As shown above, we are seeing a DRASTIC decline in the number of homes for sale in our local market. One year ago, buyers in the market for a new home would be selecting from 532 homes (in all price ranges and locations) but now they would only have 368 options. This is a drastic reduction in the number of homes available for sale, which could lead to increases in sales prices, or reductions in the number of homes that actually sell this year -- due to not having enough homes on the market for buyers to purchase.
BUT IT GETS EVEN MORE EXTREME....
Many housing market analysts consider a six month supply of homes to be a balanced market between buyers and sellers. That is to say that if 100 homes are selling per month, then the market would be balanced if there were 600 homes for sale.
As shown above, the market is out of balance in several price ranges. There are only four months of homes for sale in the $200K-$300K price range and the $300K-$400K price range -- but even more significant -- there are only TWO MONTHS of homes for sale under $200K. That is to say that if no other properties were put on the market under $200K, then in two months time, we could be all the way down to no inventory at all on the market.
So, as is likely evident, we need more homes to be listed for sale in the next few months to have any chance at having a normal Spring and Summer market in Harrisonburg and Rockingham County.
There is plenty more to learn and consider in this month's market report, such as....
I will explore many of these topics in coming days on my blog. Until then, feel free to read my full online market report, or download the PDF, or click here to sign up to receive my real estate blog by email.
And -- as is always my encouragement -- if you will be buying or selling a home in the near future, start learning about our local housing market sooner rather than later! Being informed will allow you to make better real estate decisions.
Updated numbers above! Does anything surprise you? It doesn't surprise me.
Marketing your home should follow the lead of where buyers are looking for homes -- but even more importantly, where they are finding their homes.
Preparing your home to go on the market can be challenging (and tiring), and often sellers-to-be need a second (or third) set of eyes to provide suggestions about where to focus their time and energy. There are many different theories about how to best prepare your home to be on the market and viewed by buyers --- and ways of expressing those theories.
Distractions are the things that keep a prospective buyer from focusing on your house. That might be knick knacks, or family photos, or refrigerator magnets, or an overflowing pantry, or fascinating artwork, or an abundance of indoor plants, or a strange odor, or brightly colored wall hangings. Whatever it is --- if a buyer is focusing on one (or more) of these items, they're not focusing on your house. They're reading all of the Far Side comics on the fridge instead of marveling at the granite countertops, tile back splash, recessed lighting, and stainless steel appliances. They're amazed at how you fit 234 board games into the coat closet instead of taking in the quality workmanship of the trim detail in the foyer, and the mountain views out the picture window in the family room. As you prepare your home to go on the market, close your eyes for a few moments when standing at the entrance to each main living area. Then, open your eyes, and take note of where your eyes are immediately drawn. Or, walk slowly through the space (or ask a friend to help) seeing where your eyes (and your mind) linger.
Objections are those correctable physical characteristics of your home that give a buyer a reason to mark your home off their list, or to move it down a notch in their preferences. Perhaps it is that the vinyl siding needs to be power washed, or that three bi-fold closet doors need to be adjusted, or that there is poor lighting in the kitchen, or that the deck needs staining. There are oftentimes small home maintenance items that should be attended to before putting your home on the market. There are two potential dangers of having these items unresolved --- first, a buyer might become too overwhelmed by the work that they need to do to the home once they move in, and second, a buyer might extrapolate from what they can see to imagine what they cannot. A classic example of this is the dirty furnace filter that makes a buyer assume that the HVAC system has never been serviced, is in a terrible state of disrepair, and will need to be replaced immediately.
As you're preparing your house to go on the market, I'm happy to provide you with another set of eyes and to give you some new perspectives on how to best prepare your home to be shown to buyers. When you're ready, just give me a call (540-578-0102) or send me an e-mail (scott@HarrisonburgHousingToday.com). Also, don't fret about having your home in perfect "show condition" before you call me --- I'm happy to give you some guidance and feedback while you're still in the process of preparing your home to go on the market.
Many sellers list their homes in the Spring or Summer, which is often ideal for the timing of their move, and aligns well with when most buyers are in the market.
However -- some houses are very difficult to be seen (and photographed) in the Spring and Summer because of large trees in the front yard.
So -- if you're thinking of selling this Spring or Summer, and you have trees (especially large house-obscuring trees) we should discuss taking some exterior photos SOON rather than waiting until later when we can't see your house at all.
Certainly, the grass isn't as green as it could be right now, and the flowers aren't blooming -- but it could be nice to see your house in the main view of your future real estate listing -- rather than just a tree.
click here for a much larger, more detailed map
Back in 2015, Lakeview decided to sell off as much as 75 acres of their land, moving from a 36 hole golf course to a 27 hole golf course. Many (myself included) speculated that this land would be purchased by a developer or builder as the land is located in the midst of many upper end single family home neighborhoods.
We were all wrong.
Fifty acres (as shown above) were sold by Lakeview to Sunnyside Retirement Community in January 2017, for $1.2M. So, it seems, you will not see new roads going in and houses built in that area in the near future.
Some snippets follow from today's Daily News Record article....
Some people like to see lots of photographs. Others prefer to read the written description of a home and review the pertinent facts and figures. And yes, some folks best understand a home by studying the floor plan.
I can create a "blueprint" of your home to satisfy the desires of this third group of buyers, who are spatial (and special) beings.
Read about all of the ways we can market your home by visiting....
One way for investors to identify the best deals in Harrisonburg is to compare the list price of each active listing to its assessed values.
To make it super easy for you (and any other aspiring investors) I have created BestDealsInHarrisonburg.com which features properties that are being offered at a low list price compared to their assessed value. This is likely to mean that they are a "good deal" -- though if their assessed value happens to be high (relative to their market value) then the deal won't be as sweet.
As always, consult a Realtor (such as myself) for expert advice on whether any particular property really is a great deal. BestDealsInHarrisonburg.com is simply shuffling some good prospects to the top of the pile for your consideration.
What are you waiting for? Go check it out at BestDealsInHarrisonburg.com.
If you have driven on Port Republic Road or Reservoir Street near the hospital anytime in the past six months, you have likely seen the drastic changes to the landscape surrounding Reservoir Street. A significant part of that change has been the development of a new college student housing complex, called The Retreat, which is shown above.
Construction has been moving very quickly at The Retreat, with the new structures springing up seemingly overnight in some cases, while the site work is still in progress.
Reservoir Street will have certainly seen some significant changes when we look back a few years from now -- with the road expanding (in the City, and hopefully soon in the County) and the development of Robinson Park (an affordable housing complex) and The Retreat (student housing).
The buildings shown above currently under construction on Reservoir Street -- at the previous location of the Albert Long baseball field. These apartments will be called Robinson Park, and will affordable housing -- with income limits for tenants who wish to reside at Robinson Park.
The developer was planning to expand Robinson Park into a second phase on the five acre wooded parcel shown above, adjacent to the current development, but the County tabled the developer's rezoning request.
A few snippets from this week's Daily News Record article....
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