Happy Cold and Snowy January - and Happy New Year!

Before we look back at a summary of our local real estate market in 2018, take a few minutes to explore the featured home pictured above, a spacious four bedroom home with views on a private cul-de-sac street at 3931DixieRidgeRunRoad.com.

As per the norm, you can find a PDF of my full market report here.  And now, let's take a thorough look at the overall performance of our local housing market in 2018...

Overall, 2018 was a great year for the local housing market.  Here are some key takeaways from December and the full year of 2018...

The City of Harrisonburg has been a particularly interesting market over the past year, as detailed above.  Home sales increased 9.29% between 2017 and 2018, accompanied by a 6.89% increase in the median sales price (up to $190K) and home sold with a median days on the market of only 13 days!  Homes went under contract quickly in the City of Harrisonburg last year -- and that seems likely to continue into 2019 given continued high buyer demand and low inventory levels.

Home sales have bounced back and forth (up and down) over the past few months in Harrisonburg and Rockingham County.  August, September and November were low to average as compared to the same month in previous years -- but October was a new high (120) and sales bounced back in December to a high-ish pace which helped round out an overall strong year of sales.

Just another look at the pace of home sales, above, for those (like me) who prefer pretty data visualizations.  We came so (so) close to matching the 1,313 sales seen in 2016.  And yes, we bounced back from the slight dip we saw in 2017.  What, then, might be in store for 2019?  Another 1,300+ year of home sales?  I think so -- but we shall see!

OK - a few IMPORTANT things to note here.  Despite the fact that the overall median sales price for residential properties increased 7% in 2018 -- I don't believe home values increased 7%.  Much of the 7% increase in the overall median sales price was a result of a larger number of (higher priced) detached homes selling in 2018 (as compared to 2017) and a smaller number of (lower priced) attached homes selling. 

This graph (above) then becomes important, as it shows the trend for detached homes only -- which is often a better indicator of changes in market value.  You'll note that we saw a 6% increase in the pace of detached home sales and a 2% increase in the median value.  So -- if you own a detached home in Harrisonburg and Rockingham County, it is likely that the value of that home increased 2% over the past year.

 

Oh -- and I should point out that last year's median sales price of $228,000 for detached homes is THE HIGHEST median sales price we have ever seen on an annual basis in this market.

As shown above, we have seen a steady stream of buyers in the market over the past two years -- fluctuating from 620-ish to 660-ish in a six month period.  Unfortunately for those buyers, however, they have had an smaller and smaller number of homes from which to choose.  The number of sellers in the market -- as measured by inventory levels on a monthly basis -- has steadily decreased over the past two years. These two trends have combined to create an increasingly strong seller's market in Harrisonburg and Rockinhgham County.

 

OK - this one is interesting - and I believe it is a sign of a healthy-ish real estate market.  As shown via variety of graphs above, home sales are up, inventory is down, days on market is down -- and yet, the median sales price seems to have only increased by 2%.  So - the strong seller's market has not (thank goodness!) resulted in irrational, unreasonable, unsustainable increases in sales prices.  That said, sellers are negotiating less and less (as shown directly above) from their last list price.  I say "last" list price because some sellers don't start with the best list price out of the gate, and have to reduce their list price. But in the end, sellers are negotiating less (around 1%) than they have in any recent year.

For the purposes of at least a small sneak peak ahead -- we saw only a small number of contracts (62) in December -- which is to be expected in this first month of Winter.  We're likely to see a small number of contracts in January and February as well, if past years are any indicator, before home sales (contracts) start to pop again in March.

And there (above) are those low inventory levels I was referencing.  In fact, the 269 properties currently listed for sale in Harrisonburg and Rockingham County is THE LOWEST inventory level we have ever seen in this area.  So -- perhaps the small-ish (4%) year-over-year decline is an indication that we're getting about as low as we possibly can/could/will in this market.

As one might expected, different price ranges are performing differently in our local market.  The pace of home sales in the "under $200K" market continues to decline -- likely a result of properties appreciating out of this price range. We saw a sizable increase (+16%, +14%) in the middle market segments of $200K-$300K and $300K-$400K, and the largest increase in the $400K+ price range where home sales have increased 33% over the past year.

 

Another sign of health in our local real estate market is the ever declining number of foreclosures taking place.  As shown above, there were only 85 foreclosures in Harrisonburg and Rockingham County last year -- a 37% year-over-year decline. 

One last note -- we have seen a decline over the past few months in the average mortgage rate, which is exciting for buyers currently signing contracts to buy homes.  We spent all of 2018 above 4% and we seemed to be quickly climbing towards 5% between August and October -- but the last few months of the year we saw things turn around and we are back closer to (or even below in some cases) 4.5%.

OK - that wraps up my year-end overview of the state of our local housing market.  I went into a bit more detail than usual this month -- though there is still PLENTY more in my full market report.  You can download a PDF of the entire report here.

And finally, a few quick links for you if you are thinking of buying or selling soon --