What a wild year this has been - and it is now, already, more than three quarters of the way to the end.  Many things have been turned upside down in our daily lives, but as this year has continued to progress, one thing that has not been affected as much as you might expect has been our local real estate market. 

We're seeing more home sales this year than last, at higher prices, taking place at record speeds. 

Before we dig into the data, be sure to check out Founders Way, a condo development currently under construction just minutes from downtown Harrisonburg.  Find out more about these new two bedroom condos starting in the $170K's by visiting FoundersWay.com.

Now, feel free to download a PDF of my entire monthly report, or read on for some juicy tidbits to start your week off right...

First, from a big picture perspective, referencing the chart above...

The green portions of the chart above show the trajectory of detached homes, and you might note that there have been slightly fewer (735 vs. 737) of these sales in 2020 when compared to 2019.  Despite that ever-so-slight slow down, however, the median sales price of those homes has increased 9%!

If detached home sales have slowed down, slightly, attached home sales have been running in the opposite direction, quickly.  We have seen an 11% increase in the number of attached home sales in 2020 as compared to 2019 - and again - a 9% increase in the median sales price of these attached homes.

Now, for the visual learners, let's take a look at September again...

As shown above, September was a wild month for home sales.  The (150) home sales seen in September 2020 make it the second highest month of home sales for the year - which is quite atypical for September!

I assume that home sales will slow down quite a bit in October, and then much further in November and December -- but this year has been anything but predictable, so who knows!?!

Oh, and did I mention that 2020 finally caught up with 2019?

Back in March and April, I noted that 2020 was off to a STRONG start -- with more home sales in the first quarter of this year than in any recent year.  But then, COVID.  Many fewer sellers put their homes on the market in March, April and May, which resulted in fewer buyers being able to buy houses, which slowed down the annual pace of home sales quite a bit as we progressed through late spring and then through the summer.  But then, September!  The high sailing month of home sales in September caused our year to date trajectory to pop above all recent years again.  So, 2020 is a great year - or at least for home sales in Harrisonburg and Rockingham County!

Want another visual of the impact of COVID?

The weird dip in the orange line on the graph above is the impact of COVID.  Our annual pace of home sales started dropping about five months ago, and we can only now confidently say that we're back on track to see the expected overall increase in that trajectory of home sales in this area.

But that green line!?!  Despite a slow down in home sales, we continued to see the median price rise, rise and rise some more.  Maybe because COVID caused inventory levels to dip even lower, causing buyers to be willing to pay even more for a house?  Maybe because the super low mortgage interest rates allow a buyer to be more flexible on price?  Nobody knows for sure, but those prices, they keep on rising!

Speaking of prices rising...

Over the past five years we have seen an average annual increase in the median sales price of 5% per year.  This year, it is looking like it will be a 9% increase.  This is not totally surprising -- more buyer interest, lower inventory levels, low interest rates, etc. -- but prices can't rise at 9% per year forever, so 2021 and 2022 will be interesting to watch to see how much further prices can or will increase.

And now, looking back a bit to look forward...

A few things to note here, on the graph above.  First, it was a summer FULL of contracts.  There were 34% more contracts signed this summer than last, and 32% more signed this September than last.  Thus, it seems relatively likely that the strong home sales we have seen thus far in 2020 will continue on through at least October and likely into November.

How many times have I said "low inventory levels now"? 

There it is, visualized, above -- the agony of buyers in our current local housing market.  Inventory levels are at historic low levels.  Never have there been fewer homes on the market, for sale, at a single point in time in Harrisonburg and Rockingham County.

We have seen a 46% decline in active inventory over the past year.

Now - keep in mind, we have seen a 2% - 3% increase in home sales, so these low inventory levels just mean that as quickly as new listings come on the market they are being scooped up by a buyer, preventing them from contributing to the "number of homes for sale" metric which we call "inventory".

Unfortunately, I don't anticipate that these inventory levels will shift upwards anytime soon unless it is due to new construction at a large scale.

Finally, a few times above I have noted that prices are rising - and this is perhaps one of the reasons why buyers can pay higher prices without blinking...

As shown above, the average mortgage interest rate keeps on falling.  A year ago it was 3.64% and now it's down to 2.9%.  These super low interest rates create a great opportunity for today's home buyers to lock in ridiculously low interest rates -- and they soften the impact of rising home prices.

Alright, I'll pause here for now.  If you've made it this far, thanks for taking the time to seek to better understand our local housing market.  For more such joy, feel free to check out my blog or shoot me an email (scott@hhtdy.com) with any questions you have about our local housing market or about your house.

I hope that you have a wonderful remainder of October and that you encounter more treats than tricks in your personal and professional life. 
Reach out anytime (540-578-0102 or scott@hhtdy.com) if I can be of any help to you or your family.