Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Monday, January 21, 2019
The median sales price of detached homes (single family homes) cleared $225K in 2018! Oh, but wait, this happened before, didn't it?
Yes, actually, we saw a median sales price of $226,800 in 2006 -- and then in the five years that followed, the median sales price slid downward to $184,000.
So, are we more likely to stay north of $225K this time around? I think we are, and here's why...
- The first rise to $225K included a 16% annual increase (2003-2004) and a 24% annual increase (2004-2005) which we should not have ever imagined would be sustainable, given that buyer income was not increasing at that rate.
- The second rise to $225K was comprised of increases of 5.2%, 7%, 4.9% and 1.5%. These seem to be much more sustainable increases -- averaging out at 4.65% per year.
- The final push to $226,800 in 2006 was accompanied by an 11% drop in buyer activity.
- The increase to $228,000 in 2018 was accompanied by a 6% increase in buyer activity.
- Lending standards were very loose in the years leading up the 2006 -- with stated income loans, sub-prime mortgages, teaser rates, interest only loans, etc. This made more folks "viable" buyers than should have been buying.
- Lending standards have been quite tight over the past few years leading up to 2018, which seems have ensured that only those financially stable enough to buy have been buying.
Only time will tell whether these $225K+ median sales prices can stick around in Harrisonburg and Rockingham County this time around -- but the broader contextual data suggests that it is more likely this time than last.
