As is my annual tradition, I am making some predictions about what we'll see in the Harrisonburg and Rockingham County real estate market in 2017.  Overall, I am cautiously optimistic about what the coming year will look like in this area.

As shown above, I am predicting 1350 home sales in 2017. Here's why....

• I do not think we will see another 16% increase in sales (as we saw in 2016) because I think some portion of the sales surge during 2016 was pent-up buyer demand from 2014/2015 that didn't end up buying until 2016 -- and some of the surge was related to the lowest mortgage interest rates EVER being available to home buyers.
   
• I think that higher mortgage interest rates in 2017 will (ever so slightly) limit buyer demand.
   
• We have a shortage of inventory in many price ranges, and I believe this will affect how many homes can and will actually sell in 2017.

Now, on median sales prices (our best measure of home values)....

As shown above, I am predicting a 3% increase in the median sales price to $198,500 during 2017.  Here's why....

• I believe that the 4% per year increase in median sales price over the past two years was still helping us to catch up from lower sales prices following the real estate boom and bust.
   
• I believe that slightly slower growth in the pace of sales will keep the sales price from escalating too quickly.
   
• Even in a limited-inventory environment, I don't think that buyers are going to "pay any price" to buy a house.
   
• I believe appraisals will keep sales prices in check, with each new sales price needing to be justified and based upon previously sold comparable properties.

So -- those are my predictions for 2017.  What do YOU think?  Feel free to email me (scott@HarrisonburgHousingToday.com) with your thoughts, questions and input.