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, February 15, 2021
Happy Wintry Monday Morning, friends!
It looks like it might be a touch above freezing temperatures today, so perhaps some of the lingering snow and ice and will start to melt today. This has been one of the coldest and snowiest and iciest months of January / February that I can remember anytime recently in the Harrisonburg area!
As a preview of where we're headed in this overview of the local real estate market:
- Home Sales Are Up
- Median Sales Prices Are Up
- Contract Activity Is Up
- Inventory Levels Are Down
So, no huge surprises. It seems the 2021 housing market is trying to keep the momentum going from 2020. Read on for a recap of what is happening in our local housing market or:
- learn more about the featured home above, 835 South High Street, a three bedroom City home priced just above $200K within blocks of parks, schools and the JMU campus
- download a PDF of my full market report
- email me (scott@hhtdy.com) or text me (540-578-0102) if you're want to set up a time to talk about selling your current home or buying a new one
Now, onto the data and some pretty charts and graphs...
A few observations from the overview data presented above...
- There were 100 home sales in January 2021 which is the same pace of sales as the 100 home sales seen in January 2020. On the next graph you'll see that this is quite a bit higher than normal for the month of January.
- The 1,493 home sales seen in the past 12 months in Harrisonburg and Rockingham County is a 10% increase over the 1,359 home sales seen during the previous 12 months. So, we're seeing many more homes sell these days than in the past few years.
- The median sales price has risen nearly 11% over the past year -- from $222,500 all the way up to $246,500. This is a significant increase in prices and it has been largely fueled by high buyer demand for housing and low mortgage interest rates.
- The average time it takes a home to sell (which I measure by calculating "median days on market") fell 56% over the past year from a median of 18 days to a median of eight days on the market. Another way to look at that is that half of the homes that sold in the past year were under contract within eight days!
Now, I was telling you that January was a bit unusual, even though it was a repeat of last January, right? Let's take a look...
Indeed, the 100 home sales we saw in January 2021 was merely a repeat of January 2020 -- boring! ;-) -- but that is many more home sales than we typically see in January. We usually see 60 to 70 home sales in the month of January. Last year's super strong month of 100 home sales was followed by a super slow month of only 63 home sales in February. Stay tuned to find out whether home sales will again quickly slide downward in February, or will remain strong. Keep reading to see how many people signed contracts in January, which might be at least some indication of what we'll see as far as February sales.
Looking for a big picture graph that summarizes what has been happening in our local housing market over the past year? It's this funny looking one...
Starting with the bottom, orange, line -- this is showing the number of home sales per year for each of the past 12+ months. You'll note that the annual pace of home sales took a nose dive last year between April and August, which are usually the strongest months of the year for home sales. But then, home sales took off quickly in the fall and continued to accelerate into winter, leading to huge rebound in the pace of home sales in our area. This seems to mostly be able to be attributed to COVID. There was a lot of uncertainty in the market in March, April, May, etc. which slowed down home sales, but then as people realized that the housing market wasn't falling apart AND they realized that their homes weren't working as well for them when they were in them 95% of the time (thanks, COVID) AND they realized that super low interest rates made it a compelling time to upgrade their home, we saw home sales take off quickly!
The top, green line, then is the median sales price. We have been seeing steadily increasing sales prices in our local area for the past few years and those prices kept marching upward quickly in 2020. The annualized median sales price at the end of January 2021 was $246,500 -- a significant increase above a year ago when it was $223,500.
So, remember that I mentioned that January contracts might give us an idea of what to expect for February sales? Let's take a look...
It seems January wasn't just a busy month of closings - it was also a busy month for buyers (and sellers) signing contracts to buy (and sell) homes. There were 95 contracts signed in January 2020, and 123 in January 2021! As such, it seems likely that February (and March) will be busy months for closed home sales.
What's it like buying a home these days? It can be a bit challenging, and stressful, mostly because of the very (very, very) low inventory levels at any given point...
A year ago, a buyer would have been choosing from 196 homes on the market in Harrisonburg and Rockingham County. Today, there are only 107 homes on the market for sale!?! This huge (46%) decline in inventory levels means that a buyer doesn't have a whole lot of options at any given moment in time. Now, that's not to say that they don't have options at all -- they do. If we see 1400 home sales over the next 12 months it will be because around 1400 homes will be listed for sale. So, there will be plenty of options of what a buyer might buy -- but if recent market dynamics continue through 2021, most of those new listings will go under contract quickly (median of eight days on the market) which will keep the inventory levels quite low!
Finally, those interest rates. Yes, they are still low...
Some part of what fueled the wild real estate market in 2020 was super low mortgage interest rates. As shown above, the average 30 year fixed mortgage interest rate has been below 3% for over six months now. This has kept monthly housing prices affordable for buyers amidst rising prices and has also allowed plenty of folks to refinance and see cost savings on a monthly basis.
So there we have it. We're a month (ok, really a month and a half) into 2021 and thus far we're seeing a continuation of the strong local housing market that we saw in 2020. Generally speaking that means it will be pretty fun to be a seller, pretty challenging to be a buyer, and you'll get to experience the full range of emotions of you are selling AND buying!
If you are making plans for selling or buying in spring 2021...
Sellers - Even though the market is hot, you still need to prepare your home well, price it appropriately based on historical sales data and market it thoroughly and professionally.
Buyers - Get prequalified for a mortgage, start stalking new listings, go see them on the first day they hit the market, and get ready to compete in a multiple offer situation.
Seller / Buyers - If you need to (or want to) sell in order to buy, this will require a bit more strategery :-) than normal. It can be done, but we need a solid plan in place from the start.
If I can be of help to you as you start to think about the possibility of making a move, selling your home, buying a new one, etc. -- just let me know. I'd be happy to meet with you in person, via Zoom, or to chat by phone to help you think and talk through the possibilities. You can reach me at scott@hhtdy.com or via phone/text at 540-578-0102.
Enjoy the second half of February, and we'll check in again in early March!
