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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Do Home Sales in Massanutten Resort Increase In The Fall |
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 It turns out that leaves aren't the only thing falling in Massanutten in the Autumn months -- home sales are also falling -- though only slightly. The analysis above is to answer the question of one of my clients who had heard that home sales usually show a strong up tick in the Fall at Massanutten Resort. The data above is showing the average number of contracts signed per month over the past three years. Here's what I'm finding:
Every year is certainly going to be different, but it would seem that the only up tick seen in Massanutten home sales in the Fall is when comparing that contract activity to the typically slow pace of buyer activity in August. | |
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Just Because Major Home Renovations Are Possible Does Not Mean They Are Advisable |
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 Sometimes you'll see a house that doesn't really work for you -- BUT -- it COULD -- with some major renovations. Maybe that's building an addition, adding a garage, tearing out some interior walls to make larger rooms, etc. Often, you'll determine that these renovations are possible -- but it is my opinion that they are not always advisable. A HOUSE JUST FOR YOU -- You should enjoy the home you live in, and make it your own, however a buyer can go overboard here. If you make major renovations to a home that makes it work ONLY for you -- then later when you try to sell, you may find it to be a challenge if your renovations made it work ideally for you -- and extraordinarily less than ideally for every other possible future owner of the home. OVER-BUILDING FOR THE NEIGHBORHOOD -- If you're buying a home in a neighborhood where homes usually sell for $250K, and you are likely to spend $230K because the house you are purchasing needs work, and then you spend $130K on fixing it up and making it work well for you -- all of a sudden you have a $360K home to try to sell in the future, surrounded by $250K homes. So -- by all means, consider making changes or improvements to the house that you purchase -- but keep in mind the big picture related to eventually selling the house as well. | |
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A Middle Aged Roof Will Cause You The Least Stress When Selling Your Home |
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 And conversely -- selling a home with an old or a young roof can be frustrating! OLD ROOF -- If your home is 25 years old (circa 1993) and still has the original roof, it can be frustrating to try to sell your house -- with that old roof. Many buyers are going to be (reasonably) concerned about the near-term replacement cost of that roof. They're not going to want to pay the same price as someone just paid for your neighbor's house which has a 10 year old roof on it. NEW ROOF -- If your home is 30 years old (circa 1988) and you just replaced the roof last year, it can be frustrating to try to sell your house -- with that amazing, beautiful, recently expensive, new roof. This is not to say that buyers won't be excited to buy your home with a new roof -- they would love to do so -- they just won't want to pay $12K more than someone just paid for your neighbor's house which has a 10 year old roof -- even if you just paid $12K for the new roof. There isn't much you can do about the age of your roof -- unless it is time to replace it -- so this is more of a heads up of the potential frustrations outlined above more so than any particular recommendation. But as a best attempt at some recommendations... If you have a new roof -- be happy for the buyer of your home, but don't get caught up in trying to get the buyer to pay your total roof replacement cost above and beyond the sales price that recent comparable sales would suggest would be reasonable for your home. If you have a middle aged roof -- relax, enjoy it, sell your house without people asking many questions about the age of your roof or your plans to replace it. If you have an old roof -- you'll either need to replace it (and end up in the first category above) or sell with the old-ish roof and know that buyers will want to beat you up a bit more than normal in negotiations. | |
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Preparing for Rain, Rain, Rain, Rain, Rain, Rain! |
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 We have seen record levels of rain this year that has caused unusual flooding within properties. In light of the weather forecast, here are some reminders of important actions to take prior to the storm.
Actions To Take Prior To The Storm
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How Much Overlap Exists In Your Home Search Criteria |
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 If you have three non-negotiable home search criteria, it is important to reflect on (or at least be aware of) how much overlap exists between these criteria. Above are two examples of this way of thinking about your home search.... The first set of buyers will likely have lots of options (large yellow overlap area) because many homes in the City have three bedrooms and are under $300K. The second set of buyers will likely have very few options (small yellow overlap area) because there are very few homes that somehow offer privacy AND amazing views and happen to have a formal dining room. These are fictitious illustrations -- they don't represent the actual amount of overlap that does or does not exist based on the criteria noted above -- but you should give some thought to how small of an overlap area you are creating for yourself based on what you are defining as non-negotiable in your home search. If that area is too small, you'll have very few options to consider, and eventually you may decide to flex a bit on a non-negotiable point. | |
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Local Housing Market Cools, Slightly, in August 2018 |
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 First, learn more about this new listing in Lakewood Estates by visiting 1285CumberlandDrive.com. Now, on to our local real estate market -- 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 or tune in to my monthly video overview of our local housing market...  Now, let's take a look at some the trends we're currently seeing in our local housing market...  As shown above...
 After an extraordinarily robust month of sales in June (174 -- third highest month ever) home sales slowed a bit in July, but remained (at 130) higher than in any recent July. It should be no surprise then that home sales cooled (even if temperatures did not) in August. Perhaps many summer buyers bought earlier in the summer this year than last. In the chart above, orange = 2015, green = 2016, blue = 2017 and red = 2018. So... Jun + Jul + Aug in 2016 = 425 summer buyers Jun + Jul + Aug in 2017 = 374 summer buyers Jun + Jul + Aug in 2018 = 418 summer buyers  We have seen 897 home sales in the first eight months of the year -- this is more home sales than we've seen in any recent first eight months of the year. At this point, we seem poised to see another 1300+ year of home sales -- which we have only seen one other time in the past decade.  Looking at a rolling 12 month data window -- we see that there has been a net 1% increase in the pace of home sales per year (up to 1303/year) and a 7% increase in the median sales price (up to $210K) over the past year. The median sales price escalated quickly from $200K to $210K this Spring but now has stayed put at $210K for the past few months.  I have never been happier to see such a modest increase in prices as I am to see the 2.4% increase in the median sales price of single family home as shown above. The 7% increase in median sales prices shown on the prior graph reflects not just increases in home values but perhaps a shift in which homes are selling. By looking at only single family homes (excluding duplexes, townhouses and condos) we can (sometimes) get a better sense of actual changes in home values. Here we see that single family home sales prices have increased only 2.4% over the past year.  The balance (or imbalance) between buyers and sellers doesn't show any signs of shifting any time soon. After multiple years of increasing buyer activity we are now seeing a relatively stable number of buyers in the market -- around 650 every six months. But at the same time, inventory levels continue to decline -- making it an even stronger seller's market -- with the usual disclaimers of "in most areas, in most price ranges, for most property types, etc."  The huge month of sales in June 2018 was foretold by the enormous month of contracts in May 2018. Since that time, we've seen relatively normal months of contract activity. The 109 contracts signed in August 2018 is pretty much in line with the 111 contracts we saw last year. Looking forward, we're likely to see a dip in contract activity in September, possibly a spike in October, before much lower contract numbers between November and February.  If you thought inventory levels have been low recently, you haven't seen anything yet. After a 16% year over year decline, we're about to head into the Fall and Winter where we inevitably see fewer homes on the market. It seems likely we'll dip below the 300 homes for sale mark again as we did last December and January. An increase in new construction is likely the only thing that can break this drought of listing inventory.  This is absolutely no consolation at all to any home seller who has had their home on the market for 2, 3, 4, 6 or 10 months -- but for sellers about to put their homes on the market, you have a decent chance of selling your home quickly -- again, depending on price point, location, features, finishes, condition, marketing, etc. But, as shown above, slightly more than half of the homes that sold in the past year were under contract within 30 days of being listed for sale.  Yes -- interest rates have risen over the past year -- by about 0.75%, which we shouldn't minimize. That said, at 4.5% -- which seems to be where we are hovering for the moment -- this doesn't seem to be drastically changing buyer behavior or housing affordability. OK -- I'll stop there for now. Again, you can download the full report as a PDF, or tune in to my monthly video overview of our local housing market And a few tips for anyone thinking of buying or selling soon -- 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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Stalemates in House Negotiations |
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 Some buyers find themselves in a "repeating stalemate" situation -- where they have made offers on multiple offers and they keep coming up short, and not being able to find common ground with the home sellers. In the situation I am describing, it is not a result of the buyer being outbid by another buyer -- but rather, because they repeatedly are not willing to pay a price that the seller is willing to accept. In such a situation, a buyer can start to wonder whose thinking is askew. Are they being unreasonable as buyers, thinking that they should be able to buy one of these homes for $X? Or are the sellers being unreasonable as sellers, thinking that they should be able to sell their home for $Y? In the end, I suppose that if the seller is willing to continue to own their home (and not sell it) then it is OK for them to continue to try to sell their home for $Y if multiple buyers keep walking way from negotiations not willing to pay $Y. And likewise, if a buyer is willing to continue to not buy a home then it is OK for them to continue to walk away from negotiations when sellers won't accept $X for the house. The only way that this type of a stalemate ever ends is when one party finally decides that their long-held and previously non-negotiable position can be compromised. | |
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Harrisonburg City Council Considering Regulating Short Term Rentals |
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 Do you have an opinion on whether short term rentals (such as via AirBNB) should be permitted and/or regulated in the City of Harrisonburg? If so, you should show up on Tuesday, September 11th for the public hearing on the topic. More from today's Daily News Record article...
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Home Construction Nearing Completion The Glen at Cross Keys |
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 The Glen at Cross Keys is a new home development just East of Harrisonburg -- on Cross Keys Road with 78 duplexes and paired homes. The final nine homes in the neighborhood are at various stages of construction -- and seven of those nine are already under contract! The final two homes to be built in The Glen at Cross Keys just came on the market. These 2100 SF homes have been popular with a retiring, down sizing demographic -- with an open layout on the first level with the kitchen, dining area, living room, master suite, laundry room, an office/den and a two-car garage all on the main level. The partial second level features two large bedrooms and a full bathroom. Buyers interested in The Glen at Cross Keys have two more opportunities to buy a new home -- and then it will be a matter of patiently waiting for a resale home to become available. Find out more about The Glen at Cross Keys here. | |
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Townhouse Sales Trends in Harrisonburg and Surrounding Areas |
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 This is a somewhat limited analysis, but I think it can be helpful to understand what we're seeing in changes in demand for new-ish townhouses in the City of Harrisonburg and just surrounding. The analysis above includes the following townhouse developments of properties built since 2000:
As shown on the chart, there are an increasing number of sales happening in these developments (88 sales in 2018 is for the first eight months of the year) and the median sales price is rising -- more quickly now than a few years ago. I expect sales of this type of townhouse to continue to be strong over the next few years -- though if we see a large number of new construction townhouse developments coming online it could affect the pace of sales in resale townhouse developments. | |
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Single Family Homes under $100K in the City are Going, Going Gone! |
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 It remains difficult to buy a single family home in the City of Harrisonburg for less than $100K. While the 2018 data point (above) is based only on the first eight months of the year, it is clear that fewer and fewer detached homes are selling in Harrisonburg for less than $100K. This is the only home that has sold for less than $100K thus far in 2018...  | |
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What To Do When A Home Buyer Behaves Irrationally |
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 The purpose of a home inspection contingency is to allow a buyer to learn more about the property they have contracted to purchase -- and then to request repairs to the property if they discover new issues of which they were unaware when they contracted to purchase the property. For example -- a buyer contracts to buy a home for $250K and believes the electrical wiring and plumbing are all in good condition. The home inspection takes place and the inspector discovers that there are four plumbing connections that are leaking in the unfinished basement. It is then reasonable for the buyer to ask the seller to repair these plumbing leaks prior to closing. They agreed to pay $250K for a house that they did not believe had plumbing leaks -- and thus they request the seller restore the house to being a leak-free house. This is certainly an oversimplification of the matter, as there are often many discoveries during a home inspection -- of varying levels of seriousness or complexity -- but stick with me for now. Back up at our prior example -- rarely would a seller be disappointed, surprised, or unhappy if a buyer asked for plumbing leaks to be repaired. But what is a seller to do when a buyer starts to behave irrationally -- in a way that the seller believes no other buyer would certainly ever respond? For example --
I could go on and on. The point is -- sometimes buyers behave irrationally -- for whatever reason they have decided that they cannot / will not buy the house, and they are going to dig in their feet and make irrational repair requests until the seller finally caves and releases them from the contract. Or, rather, given the standard Virginia home inspection contingency, the buyer just terminates the contract on the basis of the home inspection even though their decision to do so was based on a view of the property condition (and of needed repairs) that is unlikely to be shared by any other buyer, ever. So, what in the world is a home seller to do in such a situation?
Of course, I hope this advice is absolutely never pertinent to you. May you never be in the midst of a home sale -- under contract -- just working your way through contingencies and excitedly anticipating a closing in the near future -- and then have the rug pulled out from under you by a home buyer with unreasonable expectations or demands. But if you do find yourself in this situation, try to move on quickly and be transparent with future buyers -- after getting angry, frustrated and discouraged, of course! | |
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30 Year Fixed Rate Mortgage Interest Rates Seeming Stable Around (Just Above) 4.5% |
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 Despite the fact that interest rates have climbed almost three quarters of a percentage in the past year -- they are now seeming relatively stable, around 4.5%. Over the past three months we have seen interest rates mostly between 4.5% and 4.6%. These interest rates, being higher than the sub-4% rates seen last year, do not seem to be hindering buyer interest and activity -- as we have seen a record year of home sales (thus far) in 2018. If you will be buying a home soon, I would recommend talking to a lender early in the process to get a sense of your buying power and to understand your potential monthly mortgage payments. | |
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Twice As Many Home Buyers In County than City |
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 Each year, right around twice as many home buyers purchase homes in Rockingham County as compared to in the City of Harrisonburg. Clearly, the home buyers in the City are much more densely situated -- since the City is comprised of only 17.42 square miles -- while the County spans 849.09 square miles! As a random aside, Rockingham County is the third largest county in Virginia! So -- twice as many buyers in the County -- do sellers in the County have it easier than in the City? Not necessarily, as there are slightly MORE than twice as many homes for sale in the County as compared to the City.  Where will you purchase your next home? In the City or the County? Why? Based on the lot size, privacy, school district, age, property type? | |
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Who Bought (Or Sold) What For What? |
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 Looking for information about recent property transfers in Harrisonburg and Rockingham County? Be sure to check out HarrisonburgPropertyTransfers.com. Of note...
You can also subscribe to receive these updates by email. Just complete the form at the top of HarrisonburgPropertyTransfers.com. | |
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Fall Is Not The Worst (Nor The Best) Season For Selling Your Home |
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 As is likely no surprise -- the busiest time for home sales (contracts) is SPRING -- followed by SUMMER. Fall, though, is the third best -- ok, also the second worst -- season for home sales. Of note, 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 279 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 2018, you should be thinking about getting it on the market sooner rather than later. Fall is definitely a better time to sell than Winter! | |
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Fewer and Fewer Homes For Sale in the City of Harrisonburg |
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 Home buyers looking to purchase in the City of Harrisonburg are finding fewer, and fewer, and fewer options at any given time. As shown above, inventory levels have been steadily dropping over the past six years -- from over 200 homes for sale to less than 100 homes for sale. Now, of note, this is not an indication that fewer homes are selling in the City -- but rather, that with as fast as homes are selling in the City, there are a smaller number available for sale at any given time. Buyers in the City, thus, are finding themselves in competitive offer situations more often, or are having to make decisions much more quickly when a house of interest is listed for sale. Learn more about our local housing market in my most recent monthly market report -- click on the image below to read it.  | |
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Local Home Sales and Prices Surge in July |
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First, learn more about this fantastic home (my dad's house), via a 3D Walk Through and more by visiting 3120PrestonLakeBoulevard.com. Now, back to our local real estate market -- 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...  Now, let's take a look at some the trends we're currently seeing in our local housing market...  As shown above, it has been an exciting month -- and year -- in our real estate market...
 OK -- this one is a random snippet. Above you will find a STARTLING statistic about the housing market in the City of Harrisonburg -- not including Rockingham County. When we look at all homes that sold in the past 12 months, in the City, half of them were under contract within 14 days of being listed for sale! Wow!  Back to the big picture -- June 2018 home sales (all 174 of them) was the third highest month of home sales we have ever seen in our local market -- topped only by two summer months back in 2005 and 2006. I thought we'd see home sales drop off in July, as a result, but we had the best month of July sales in recent years -- with 127 home sales! Next month I'm not expecting we'll pop back up to August 2016 levels -- we're more likely to be in the 120 - 130 range for sales in August.  August, oh August, that magical month. Last year at this time (end of July) we had seem more home sales (in 2017) than during that same timeframe the prior year (2016). And then, August. After August passed, 2017 never caught back up -- and ended up being a slower year than 2016 when all sales were accounted for. So -- what will happen this August? Will we keep on pace with 2017? Or even with 2016? Will we fall behind again? Stay tuned.  When I see the YTD market-wide median increasing by 10%, I get a bit worried -- wondering if these are sustainable increases. Then, however, when I look at single family home sales alone, I am (at least a bit) reassured. You'll note that thus far the median sales price has increased only 4.2% between 2017 and 2018. This is much more in line with (or close to) long-term historical averages, and makes me think that the strong seller's market might not be leading to unsustainable price increases. Why, might you ask, is the single family detached market a better indicator of changes in market value? Mainly because it is not as easily affected by the number of investors engaging in our market. When the market gets hot we often see lots of investors buying properties -- often townhouses or other attached dwellings -- which can affect price trends. Most single family home purchases are made by folks who actually intend to live in the properties.  Which would you rather do, buy or sell in the current market? The answer should be "sell" -- given the strong seller's market we're currently experiencing. A few things to note above -- first, there are still plenty more buyers in the market than there are sellers. Second, the number of sellers in the market continues to decline (and decline, and decline). Third, after a brief slow down in buyer activity, the pace seems to be increasing again.  What comes next for our local market? Looking at contract activity (above) we can see the pop in May 2018 that lead to a wild month of June sales. Looking, then, at July -- we actually see a sizable increase from last July -- so maybe we'll have a stronger than expected month of sales in August after all!?  If you're buying soon, you might have already passed the time in our local market cycle when you would have the most options from which to choose. That's not to say that plenty of new listings won't be coming on the market in the next 30 / 60 / 90 days -- they will -- but inventory levels have likely peaked and will start to decline as we (eventually) head into Fall and Winter.  Lastly, how about those interest rates? We were actually close to 4.5% about 20 months ago -- but then dropped below 4% again. Now, over the past year, we have seen steady increases to where we are currently hovering around 4.5%. I have not seen this playing a major role in whether buyers are willing and able to buy -- but I do wonder if buyer activity (or interest or capability) would start to be affected if the interest rates rose to 5% or 5.5%. OK -- I'll stop there for now. Again, you can 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 One last note for anyone thinking of buying or selling soon -- 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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Will It Be Harder to Sell Your Home Or Buy The Next One? |
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 If you are getting ready to sell your home AND buy your home, it can sometimes be difficult to determine where to start... Do you start by finding a house you want to purchase? Or do you start by listing your home for sale? I would suggest that you start with whichever you anticipate will be the most difficult part of the two step process. If it will be difficult to sell your home (because of price, location, layout, features, age, etc.) and it will be at least slight easier to buy the next one (plenty of viable options are listed for sale) then you are likely best off starting with listing your home for sale. Work to get the more difficult half of the transition underway by getting your current home under contract, and then work on the easier side of the transition. If it will be more difficult to buy the next house (because of the specificity of your housing goals, or because of low inventory levels, etc.) and it will be at least slightly easier to sell your current home (because the property type, location or price are in high demand) then you are likely best off focusing first on finding the home to buy -- and then listing your home for sale. There are plenty of nuances we can discuss further to formulate a plan for attempting to simultaneously sell and buy -- but as a general rule of thumb, you'll be best off to start with the harder half of the transaction. | |
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Prices of Single Family Home Sales Relatively Close to Harrisonburg |
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 Here is a break down of a year's single family home sales by price range:
A reader asked the following in response to my analysis earlier this week of all home sales in Harrisonburg and Rockingham County... "These stats don't seem to portray the same market in which I hunted unsuccessfully for months in the 200-300k range and, ultimately, felt pushed to purchase far beyond my comfort zone amid intense competition. How does the picture change if you include only detached single family properties? (i.e., are the numerous sales of sub-100k student townhome units skewing things?) I'm just trying to understand why my experience seems to have differed so greatly from the market reality." This is an excellent point. When we look at a large amount of data (all sales in Harrisonburg and Rockingham County) the large number of home sales in a particular price range can obscure some market realities that are hiding just below the surface. In the case of the buyer commenting above, the reason that she found very few options in the $200K - $300K price range relates to property type, location, size, age and features. Property Type - Indeed, the original analysis includes all property types, including townhouses and condos. Under $100K, this includes many student rentals. Between $100K and $200K, this includes many townhouses, some of which are rental properties. Between $200K and $300K this also includes quite a few townhouses. In the new analysis (above) I have only included single family detached homes. Location - Rockingham County is a large county. It's actually the third largest county in Virginia, behind Pittsylvania and Augusta. Many buyers looking to be close-ish to Harrisonburg aren't going to be looking at homes in Broadway, Elkton or Massanutten, based simply on location. In the new analysis (above) I have only included areas close-ish to Harrisonburg, as shown below.  Size - It's easy to look at the data above and wonder how there could really be 182 homes that sold between $200K and $300K, in the geographic area bounded above, and to not (as a buyer) have thought any or many were good options. A whole lot of this has to do with the size of the home -- many buyers need more than X bedrooms, or more than X square feet. When we start putting some lower bounds on the space needed in a house, we quickly narrow down the number of viable homes. Age - The age of a home doesn't narrow things down quite as quickly as the size of a home, but it makes an impact. Many buyers are going to be significantly less excited about buying a 60 or 80 or 100 year old home as compared to buying a home that has been built in the past 10 to 20 years. Features - Then, when we start adding on needs (garage, basement) or wants (open floor plan, level lot), we narrow it all the way down to a relatively small number of homes that often match exactly what a buyer is hoping to buy. So -- when you look at the large number of homes selling in a given price range, don't think that all of those homes will be homes that will be viable options for you and your family. Once we add some of your additional (reasonable) criteria, the options will start constricting, often rather quickly. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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