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
Tuesday, September 14, 2021
Happy Tuesday Morning, Friends!
I hope you had a fun and relaxing weekend. My Sunday included an adventure with my daughter, about 24 of her classmates, and several other dads... hiking to Saint Mary's Falls... with many of them then jumping off a 15 foot high ledge down into a pool of water below!?! A bit nerve-wracking at first, but we didn't have any injuries, so we'll call it success. :-) You should definitely check out Saint Mary's Falls if you haven't been -- it's a 4.3 mile out and back hike only about 45 minutes from Harrisonburg!
But back to the business at hand - the very active Harrisonburg and Rockingham County real estate market! August 2021 was a busy month, and there is plenty to unpack in the latest data.
Download a PDF of all of the charts and graphs here, check out this beautiful home on East Wolfe Street on the cover of this month's report, or keep reading for some insights into the latest news from our local housing market...
OK - so much to jump into (I guess I'm still thinking about the waterfall!?) right from the start...
Referencing the data table above...
[1] There were 176 home sales in August. 176! That's 32% more than last August. Admittedly, things slowed a bit in July -- but then sales spiked again in August!
[2] We've now seen 1,065 home sales in 2021 which is 18% more than we saw last year during the same timeframe. It has been an active year!
[3] Over the past 12 months we've seen 1,658 home sales recorded in Harrisonburg and Rockingham County via the MLS and that is 26% more than the prior 12 months!
[4] The median sales price thus far in 2021 -- $268,580 -- is 12% higher than it was a year ago. That is a much larger than normal increase in the median sales price.
[5] Homes are selling quite a bit faster this year (median of 5 days on the market) than last year (median of 11 days on the market).
Above you can take a closer look at the month by month trajectory of home sales this year. We saw 174 home sales in June -- which was well above 2020 (134) and tied with June 2018... but then home sales in July 2021 slowed to 146 sales, a small decline from the 153 sales seen in July 2020. But then, August!?! After only seeing 133 home sales last August, there were 176 this August! Where do we go from here? It's anyone's guess. September and October were extremely active for home sales last year -- could we match that pace this year?
All these active months of home sales in 2021 have been piling up...
We're now more than a full month ahead of the pace of home sales last year. We've had more home sales (1,065) in the first eight months of 2021 than the number of sales (1,060) seen in the first nine months of 2020!
Given the current trajectory, we are very likely to see more than 1,500 home sales in 2021 -- and it seems possible that we could get all the way up to 1,600 home sales!
Here's the best "why" I can come up with at this point...
We saw a temporary decline in the pace of home sales when Covid started showing up in our lives -- in March/April of 2020. Then -- many of us started to work from home, learn from home, stay at home -- basically spending more and more time in our homes. This seems to have caused many folks to realize it was more important to have a home that worked well for them -- related to amount of space, types of spaces, etc. Home sales took off starting in late August 2020 and have been on a tear ever since.
But it's not just the pace of home sales that has been increasing...
Home prices have been rising very steadily over the past few years, but we have seen a 10% or higher increase in the median sales price in both 2020 and thus far in 2021. Of note, here are the annual increases in the median sales price per year for the past four years, including 2021...
- 2018 = $13K
- 2019 = $11K
- 2020 = $21K
- 2021 = $23K
So, if you have owned a median priced home for the past four years you may have very well seen a $70,000 increase in your home's value in the past four years!
What comes next?
Well, technically, things might eventually start slowing down? Last summer (June / July / August) there were 495 contracts signed for homes in Harrisonburg and Rockingham County -- compared to only 414 this summer. So, maybe we start to see a decline in closed sales in September and October? It's hard to say at this point. Clearly, the robust month of home sales in August is not an indication that things are slowing down or cooling off. :-)
We are also seeing a marginal increase in available inventory...
The number of homes for sale at any given time has been declining for years -- but over the past few months the number of homes on the market at any given moment in time has increased slightly from "barely any" to "still very, very few" in Harrisonburg and Rockingham County.
Keep in mind -- when 1,658 homes are selling in a year, an increase from 96 homes on the market to 129 homes on the market is not overly encouraging for new buyers. That means there is still less than a month of inventory on the market right now!
Given than there aren't many homes on the market for sale -- some buyers are considering the purchase of a building lot to build a home...
Indeed, even at a time when the price of building materials is still quite high, we are seeing a lot of building lots selling. There were 108 lot sales (of less than an acre) all of last year -- and we've seen 107 such sales in the first eight months of 2021. It's not clear whether all of those buyers will really build -- or be able to build -- but low housing inventory has certainly contributed to more buyers considering building lots.
And here's a big part of what has kept all of this home buying activity chugging along... cheap money...
The 30-year fixed mortgage interest rate has been below 3% for almost all of the past year. This has kept housing payments for buyers very low -- even amidst rising home prices. I've been saying for years that mortgage interest rates will certainly start rising soon. I think I have given up on that mantra now, after having been wrong year after year. Certainly, if or when rates do start to rise, that will affect monthly housing costs and housing affordability -- but higher interest rates don't necessarily seem to be on the horizon anytime soon.
And now... we're already half way through September!?! We might be seeing high temperatures again this week, but hopefully it will start feeling like fall by the time we get to the first official day of fall, next week, on September 22nd.
Meanwhile...
If you are thinking of selling your house this fall, let's talk sooner rather than later about timing, pricing, preparations and more.
If you're thinking of buying this fall, start looking now, because there aren't many houses on the market, so we'll likely need to patiently wait for the right opportunity to come along and then jump on it, quickly!
If you have a question about the market, or your home, or your overall real estate plans -- don't hesitate to ask. Email me or call/text me at 540-578-0102.
If you made it to the end, thanks for reading along. I hope you learned something -- and I hope you'll plan something exciting for this coming weekend -- as exciting as jumping off a 15 foot ledge into a pool of water!
