Archive for August 2022
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If High Mortgage Interest Rates Having You Looking At Renting Instead Of Buying, Unfortunately You Will Also Find High Rental Rates!?! |
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 Some (many?) would be home buyers are discovering that mortgage interest rates are making their potential monthly housing costs much higher than anticipated. Just a year ago, the mortgage interest rate was 2.8% for a 30 year fixed rate mortgage and now it's 5.3%. Combine higher mortgage interest rates with higher home values and today's buyers find much higher mortgage payments... A Year Ago... $225,000 = 2021 Median Sales Price of Townhomes, Duplexes and Condos $1,038 = monthly payment assuming 10% downpayment, 2.8% mortgage interest rate Today... $241,767 = 2022 Median Sales Price of Townhomes, Duplexes and Condos $1,431 = monthly payment assuming 10% downpayment, 5.3% mortgage interest rate So, the potential monthly housing cost of buying a median priced townhouse has increased from $1,038 to $1,431 in the past year. This might cause some (many?) would be buyers to explore renting instead. But... rental rates have also increased significantly over the past year! I don't have a large data set to support this statement, but generally speaking, townhouses that might have rented for around $1,100 a year ago are now often renting for $1,350 or more. So, perhaps rental rates aren't increasing as quickly as monthly housing costs if you purchase a townhouse... but these higher rental rates mean that choosing to rent instead buy doesn't provide quite as much relief of your housing costs as you might imagine. | |
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Median Price of Single Family Home in Harrisonburg and Rockingham County Rises 67% Over 10 Years, 140% Over 20 Years |
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 Single family home values have not always increased in Harrisonburg and Rockingham County over the past 20 years... but they have mostly increased, and they have significantly increased over a 10 year and 20 year time horizon. 10 Years Ago = Median Sales Price of $195,000 Now = Median Sales Price of $325,990 67% Increase over 10 Years 20 Years Ago = Median Sales Price of $136,000 Now = Median Sales Price of $325,990 140% Increase Over 20 Years Over these past 20 years, the median sales price increased during 12 years, decreased during four years and had a change (+/-) of less than 2% during four years. The average increase per year in the median sales price in Harrisonburg and Rockingham County was 4.5%. | |
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33 Townhouses Proposed By Ryan Homes To Be Built In The City of Harrisonburg, At The Entrance To Cobblers Valley |
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 Ryan Homes is currently building a neighborhood called Cobblers Valley in Rockingham County and they are now proposing 33 townhomes to be built in the City, at the entrance to Cobblers Valley. The property is already zoned for townhouses but the developer is requesting a subdivision ordinance variance to allow the townhouse lots to be built on a private street instead of a public street. You can download the reference documents from the Planning Commission's summary of the request here. This is the proposed layout of this small section of townhouses in the City...  | |
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Harrisonburg Housing Market Still Showing Strength Despite Some Signs Of Slowing |
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 Happy Thursday afternoon, friends! As any student or teacher will tell you, summer is almost over! 😢 I hope that you and your family had a wonderful summer and that you had at least one opportunity to sneak away... to the beach, the lake, a tropical island, a music festival, a rural AirBNB, a national forest, a campsite or a new city! One of my favorite spots to sneak away is Deep Creek Lake, MD...  But getting back to business... The beautiful house on the cover of this month's market report is located at 3161 Henry Grant Hill in Preston Lake and you can find out more about this spacious home here. Each month I have a giveaway, of sorts, for readers of this market report. This month's giveaway requires a special sort of market report reader... one who also likes to run... a lot. I enjoy running and frequently participate in races put on by VA Momentum, and thus I was excited to hear they are putting on a half marathon this fall. So... this month, you can enter for a chance to win a free registration to the Harrisonburg Half Marathon, to be held on October 15, 2022! Find out more about the half marathon here. Enter to win the free race registration here. Email me and tell me I'm crazy for thinking you'd run a half marathon here. 😉 And now, after all that, let's dig in and see what is happening in our local housing market...  As noted in my headline above, there are some signs that our local real estate market might be slowing down a bit. This very well may mean, though, that it slows down from going 90 MPH in a 60 MPH zone to going 75 MPH in a 60 MPH zone. The latest numbers, as shown above, indicate that... [1] July home sales were slower (140) than last July. We'll see this again on a graph in a moment. [2] Thus far this year we have seen 932 home sales, which is 4.6% more than last year. We had a record number of home sales last year, so a further increase this year is... record breaking. [3] The median sales price in July was 5% higher than last July. [4] When looking at the first seven months of the year, the median sales price has risen 11.7% in Harrisonburg and Rockingham County. So... most of these indicators are quite positive, rosy, exuberant, except the slight slow down in July. This is seen a bit more clearly here...  Above, you'll note that in June 2022 we had an astronomical 188 home sales... higher than any of the past three months of June. But, then, July. In July 2022 we only saw 140 home sales, which is less than any of the past three months of July. Some might point out that looking at a single month of housing data, in a small-ish housing market, can make you think something is happening, when nothing is happening. I agree that can happen. If we smash the two months together, we find that there have been 328 home sales this June and July... compared to 322 home sales last June and July. So... maybe things are "just fine" right now, and maybe things are starting to slow, slightly.  As shown above, if things are starting to slow... they're only just starting to do so, and they're doing so verrrrry slowly. The 932 home sales seen thus far in 2022 is more than we have seen in the first seven months of any of the prior four years. Perhaps when we get another month or two into the year we will see things level out a bit in 2022?  Slicing and dicing the data once more, this graph (above) measures (each month) the number of sales in a 12 month period as shown with an orange line, and the 12-month median sales price (measured each month) shown with the green line. As you can see at the end of the orange line, it's possible that the overall pace of home sales is slowing a bit... but then again, maybe not. We'll need to watch this for a few more months to know for sure. Speaking of the future, our most reliable indicator of future sales is... current contracts...  This one surprised me a bit. We usually see around 150 to 160 contracts signed in any given month of July. But... not this July. There were only 114 contracts signed in July 2022, which is much lower than usual, and likely means we will see a lower than usual month of closed sales in August and/or September. This falls to the category of "things that make you say hmmmm...." and this will definitely be a trend we will need to continue to monitor. Somewhat fewer buyers signing contracts might mean that inventory levels would rise a bit...  Indeed, we are starting to see inventory levels creep up a bit. There are now 163 homes for sale in Harrisonburg and Rockingham County, which is a bit more than the 129 we saw at this time a year ago. It is important to note, though that these "slightly higher" inventory levels are really still VERY, VERY low. Many or most buyers in most price ranges and locations still have very few options of homes to buy right now. So, yes, inventory levels are creeping up a bit, but don't think that's necessarily giving buyers more choices... or giving buyers more leverage... at least not at this point. So... a few fewer sales... fewer contracts... slightly higher inventory levels... that probably means that homes aren't selling as quickly, right!? Well...  Looking at the 12 months of home sales prior to July 2021 (a year ago) the median "days on market" for those sales was only five days. That metric has remained constant for 13 months now... and today, when looking backwards by a year, the median "days on market" is still just five days. Narrowing the focus even more, to just the 114 properties that went under contract in July 2022, we might expect to see a higher "days on market" -- and we do -- but only barely. The median days on market during July 2022 was... six days. So, homes are still going under contract very, very quickly! Finally, maybe this (below) is a contributing factor to the slight slow down over the past 30 to 45 days?  A year ago, the mortgage interest rate was 2.8%. Six months ago it was 3.55%. During June and July it was as high as 5.81%, though it has started to decline now. It is quite possible that these higher mortgage rates have caused some buyers to not be able to buy any longer... or that it has at least partially dampened their enthusiasm. So, there you have it, friends. The housing market in Harrisonburg and Rockingham County is still showing great signs of strength with more sales than ever, at higher prices than ever. But... we might be seeing a slight slow down in home sales (from record high levels) and we might be seeing a slight increase in inventory levels (from record low levels). We'll have to give it a few more months to see how things continue to develop in the local market to know for sure. Until then... If selling a home is on your mind, let's talk sooner rather than later. Before you know it, we'll be halfway through fall and headed into winter. If you are planning to buy a home soon, let's start watching for new listings of interest and going to see them quickly when they hit the market. If I can be of any help with the above (selling, buying) please call/text me at 540-578-0102 or email me here so we can talk about working together to navigate your way through the ever changing Harrisonburg real estate market. | |
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Anecdotally, A Smaller Percentage of Showings Seem To Be Resulting In Offers These Days |
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 I don't have any data to back this up, but it seems that a smaller percentage of showings are result in offers right now. A year ago, 20 showings might have resulted in 5 to 10 offers. Today, 20 showings seems to be resulting in 2 to 3 offers. It's hard to know what exactly is driving this change... [1] Home prices are certainly higher now than they were a year ago, and maybe it's harder for buyers who look at houses to get excited about paying today's prices as compared to the prices a year ago? Though, a year ago, prices seemed pretty high to most folks as well... [2] Mortgage interest rates are certainly higher now than they were a year ago, and maybe buyers are excited about Home X at Price Y but when they run the numbers and determine Mortgage Payment Z their excitement cools? Though, they could have known that before they decided to go see the house... [3] The housing market was on fire a year ago with no signs of cooling off, whereas now some markets are seeing sales and/or prices level off or decline slightly. So, maybe buyers are a touch more hesitant to act today as compared to a year ago because there is some small amount of doubt of whether home prices will continue to accelerate upwards over the next few years? Though, a year ago, there was some doubt about whether prices would keep accelerating upwards because they had been increasing so quickly up until that time... So, it's hard to say why, but a somewhat smaller portion of buyers who go to view homes seem to be deciding to make an offer on those homes right now. Does this matter to sellers? Not necessarily. [1] Homes are still selling very quickly. [2] Homes are still selling at prices that are very favorable to sellers. [3] Sellers are still often having more than one offer to consider, even if they don't have ten offers. So, changes are afoot, but they aren't necessarily changes that are affecting the pace of sales or sales prices in our local market. | |
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Some Home Sellers Optimize For Speed, Convenience or Certainty Instead Of Price |
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 What are you optimizing for?
As a home seller, you are always optimizing for something. PRICE - Maybe you are willing to wait as long as it takes to get the price that you want for your house. Even if it takes months longer than you had hoped and even if it means that you aren't able to continue on with other life transitions that you had planned, at least you go the price you wanted. TIME - Maybe it's important to you that you wrap up your home sale (have the house under contract) within a few days or weeks. If so, you might be willing to price your home a bit lower to maximize the possibility that you accomplish your timing goals. CONVENIENCE - Maybe your strategy for when you list your home and your pricing strategy all revolve around making it a seamless transition to your next home. You're willing to be flexible on timing and on pricing so long as it lets you accomplish your goals of buying that perfect next home. CERTAINTY - Some sellers don't mind working their way through inspection contingencies, but some would opt for a slightly lower priced offer without an inspection if that meant they would have certainty that the sale would move forward. | |
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Happy Mortgage Interest Rate News As Average Rate Falls Below 5% Again |
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 Mortgage interest rates have been steadily climbing for most of the past six months -- peaking at 5.81%. But... in a bit of good news for buyers in today's housing market... the average mortgage interest rate (for a 30 year fixed rate mortgage) has fallen below 5% again... barely... to 4.99%. Just over a month ago with rates nearing 6%, some were thinking we were going to see them continue to rise to 6%, 7% or beyond. This moderation in rates is certainly helpful for home buyers looking to buy a home right now! | |
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If You Can Buy A Home Without Selling, Get Your Ducks In A Row Sooner Rather Than Later |
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 It's hard to get a home seller to consider a home sale contingency these days. The market is still moving quite briskly, so why would a seller tie up their home in a contract with a buyer... who then has to go and sell their home!? Sometimes, though, a buyer can buy their next home before selling their current home. This allows said buyer to make an offer without a home sale contingency, and thus, have a shot at securing a contract on the home they hope to purchase. But... sometimes... being able to buy a home without selling requires a bit of research or planning or both... RESEARCH - If you are pretty sure you can buy without selling, don't wait to talk to your lender to confirm that until a house of interest comes on the market for sale. Talk to them now! Submit documentation to your lender to get to having a firm understanding of whether you can or cannot buy without selling... and get a copy of your pre-approval letter! PLANNING - Perhaps you have quite a bit of equity in your home... or perhaps it is entirely paid off! One option may be to take out an equity line on your current home to allow you to use those funds for a downpayment on the new house... and then pay off the equity line when you sell your current home. If you're looking for a good lender for getting pre-qualified or for exploring equity line options, let me know... | |
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The Developer of Preston Lake Would Like To Build 139 Townhouses Behind Turner Ashby High School |
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 The developer of Preston Lake, Evergreen Homes, would like to build 139 townhouses behind Turner Ashby High School in the area outlined above. Bridgewater Town Council will review the proposal at their meeting in August. The potential townhouse development would be called The Glen at Cooks Creek and would be comprised of several different styles and sizes of townhouses. These townhouses would be built adjacent to Windsor West... and the land for these townhouses seems to currently be owned by the developer of Windsor West. Read a bit more this potential development over at the Daily News Record here. | |
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271 Apartments Proposed Between Stone Spring Road and Apple Valley Road |
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 Cathcart Properties Inc, a developer out of Charlottesville, is proposing a rezoning of 19.3 acres between Stone Spring Road and Apple Valley Road (as shown above) to allow for the development of up to 271 apartments in seven apartment buildings as shown below...  The potential unit breakdown per the site plan appears to include...
Per the developer's description of the proposed plan for The Wentworth we learn that the community will contain no more than 271 apartments and amenities are likely to include a clubhouse, pool, playground, dog park, multi-purpose court, bus stop, car wash and trash/recycling site. The Rockingham County Planning Commission will review this rezoning request at their meeting on August 2nd at 6:30 PM. Download the entire rezoning application packet here. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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