Archive for January 2025
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Monthly Housing Costs Over Time, Plus Adjusted For Inflation |
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 Above you can track average monthly housing costs in Harrisonburg and Rockingham County over time, with some pretty large caveats. This graph is based on the median sales price each year, assuming a buyer finances 80% of the purchase price with the average mortgage interest rate of that year, and the monthly costs include an estimate for insurance and property taxes. This chart is not showing the average housing cost of everyone in Harrisonburg and Rockingham County over time -- it is showing the monthly housing costs for buyers buying homes in each of the years in the graph. If you bought a home in 2014 with a fixed rate mortgage, your housing costs have likely stayed relatively level over the past decade other than adjustments for insurance costs and real estate taxes, both of which are a minority of the total housing cost. You might note that this graph shows monthly costs spiking significantly between 2021 and 2024. In fact... they nearly double between 2020 and 2024. Here's where we need to consider inflation. The inflation rate was quite higher in 2021 and 2022 which caused housing costs (and the cost of many other items) to increase significantly. Certainly mortgage interest rates were also rising during this time, but we can't ignore the impact of inflation alone. Here is the annual inflation rate during the same timeframe as in the graph above...  And now, let's adjust those housing costs for inflation, so that each year's housing cost is in 2020 dollars, to see how much housing costs have adjusted over time over and above how inflation has changed...  Here you can see that housing costs have still increased quite significantly over the past few years, but not quite as much as the non inflation adjusted data would have you believe. It seems unlikely that home prices are going to decline - so the best bet for housing costs leveling off would be lower mortgage interest rates. Most economists are not predicting significant downward adjustments in mortgage interest rates in 2025. | |
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I Would Like To Buy A New (To Me) Home But Would Need To Sell My House In Order To Do So. Is This Possible? |
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 Ah yes - a good question - buying and selling - can it even be done in 2025? You own a home, but you want to buy a new one. You can't buy the new one until you sell the existing one. So, what are your options? This list doesn't include all the possible ways to do it... but it includes quite a few options to consider and explore... Buy First, Seller Later. If you are qualified for a mortgage to purchase the next home before you sell your current home, this may be the way to go. This will allow you to make an offer on a house you love without a home sale contingency, which often won't be be accepted by a seller. Certainly, there are some risks to this approach -- you won't know how quickly your home will sell or for what price -- but it will be a lot easier logistically. In addition to being able to make an offer without a home sale contingency, you will also be able to move into the new home before having to move out of your existing home. List Your Home For Sale After Having A Contract To Buy The Next Home. Shifting pretty far from the prior strategy - the concept here would be waiting to list your home until you have secured a contract to buy the home you want to buy. But... this isn't necessarily a realistic strategy in the current market. Most home sellers aren't going to be interested in your offer if it is contingent on you listing your home, getting it under contract, working through any contingencies and then getting to closing. So... it's fine to make offers with this contingency but it is not necessarily realistic to think that a seller will go along with your proposed plan. List Your Home For Sale After Seeing The Perfect House To Buy. This one is a bit tricky from a timing perspective, but it's trying to end up somewhere between the two strategies noted above. This game plan would involve waiting until a perfect house comes on the market for sale, and then listing your home for sale. The hope would be that you could get your current house under contract quickly enough to then make an offer contingent on your (under contract) home making it to closing -- instead of contingent on your (not yet listed) home being listed, going under contract and making it to closing. Most sellers will be more excited about your offer this time -- since your house is already under contract -- but your offer will still likely be seen as less favorable compared to an offer without a home sale contingency at all. List Your Home For Sale, Contingent On You Finding A House To Buy. If you have tried the above strategy (listing your home for sale as soon as a perfect house to buy comes on the market) a few times without success -- because another buyer jumped on that perfect house before your house was under contract -- then maybe this strategy is for you. We can list your home for sale without knowing what you will buy. When a buyer is ready to commit to buying your home, we can propose contract terms that make the sale of your home contingent on you securing a contract on a home you would like to purchase. Some buyers might go along with this, but some won't like the uncertainty of whether they are really buying your house. This strategy is asking the would-be buyer of your house to take on the risk of whether you will be able to find a house to buy and have your offer on that house accepted. List Your Home For Sale, Hope For The Best For A Next House. If you have tried the above strategy (listing your home for sale, contingent on you securing a contract on a house to buy) and it didn't work -- because buyers don't like that uncertainty -- then maybe this strategy is for you. We can list your home for sale, when a buyer comes along we can propose a slightly longer (60-75 day) closing timeframe, and then hope that a perfect house comes along in the next few weeks, allowing you to (hopefully) contract on the next house, with both closings to coincide. Certainly, if the right house doesn't come along, or if that seller doesn't like your contingent (on home settlement) offer then you might not be able to secure a contract to buy a home -- and you would still need to sell your current house (and move out of it) per the terms of your contract with a buyer. Eek. List Your Home For Sale, Hoping For A Flexible Buyer. We wouldn't want to bank on this being possible -- but if we list your home for sale, and a buyer comes along that is either an investor (planning to rent out your house) or is very flexible about when they would move in -- then you could contract with this flexible buyer knowing you wouldn't have to move out right away when the settlement date rolls along. This might buy you a few extra months to find the right home to contract to buy -- either making an offer contingent on your home getting to settlement (if closing hasn't happened yet) or not contingent on a home sale at all if the closing has taken place. Come To Terms With Moving Twice. This is perhaps the least exciting logistically. Nobody really likes moving. Moving twice is just about twice as bad as moving once. But... if the fact that you need to sell your home limits your ability to purchase the home (or homes) that you want to buy -- then you may need to sell your home, move into a rental, and then make offers without having a home sale contingency. | |
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I Hope To Buy A Home Soon And Want To Better Understand The Process And The Market |
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 If you will be a first time home buyer, or if you are getting ready to buy a home for the fifth time in your lifetime, you may have questions about the home buying process and the market... 1. When should I get pre-approved for a mortgage? 2. I want to buy a house like ____, and I'm wondering if I will be able to do so in my budget of ____. 3. I'm worried about buying a home without doing a home inspection - is it possible to include an inspection contingency in an offer these days? 4. Do buyers or sellers pay for the services of a buyer's agent these days? 5. Is it OK for us to go look at some houses together even if they might not be a perfect fit for what I'm looking for? 6. How long does it usually take to get to closing and take occupancy of a house once I am under contract to purchase it? 7. What are home prices likely to do in our local market over the next few years? 8. What are mortgage interest rates likely to do over the next few months? 9. Should I plan to pay list price or higher on every house that is on the market this year? 10. What is the first step I need to take when a house of interest hits the market? I often meet with home buyers before we start to view houses to discuss these questions and more. If that type of a conversation would be helpful for you -- let's meet at my office, or meet up for coffee -- you can contact me most easily by phone/text at 540-578-0102 or by email here. | |
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I Plan To Sell My House Soon And Want To Better Understand The Market In My Neighborhood And Price Range |
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 In the overall Harrisonburg and Rockingham County real estate market, home prices are on the rise. Here's how the median sales price has increased in our market over the past few years... 2020: +10% 2021: +10% 2022: +11% 2023: + 10% 2024: + 5% Wowee! But... to determine the value of your home we need to look not only at broad market trends, but also the sales prices in your particular neighborhood and price range. Some of the data we might analyze could include... [1] Home sales in your neighborhood over the past 6 to 12 months [2] Home sales in your school district over the past 6 to 12 months with a similar amount of finished living space and of a similar age. [3] Home sales in your school district or neighboring school districts over the past 6 to 12 months with a similar amount of finished living space, of a similar age, of a similar style, with a similar number of bedrooms and bathrooms. Basically, we'll be trying to find the best examples of what buyers recently paid for homes that are as similar as possible to your home. We'll broaden the criteria, if needed, to have enough data points to work with. We'll narrow the criteria, as much as we can, to have specific feedback on your home's potential market value. You can start sorting through some of the sales data on your own, if you'd like, here - but if or when you are ready to start making a plan for selling your home, let's talk further about how to best define the market segment that will most accurately point to your home's value in the current market. Reach out to set up a time to talk further about your home. You can contact me most easily by phone/text at 540-578-0102 or by email here. | |
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Year End Recap Shows 12% Increase In Home Sales, 5% Higher Sales Prices In Harrisonburg, Rockingham County |
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 Happy New Year, friends! The high temperature actually made it up to 40 degrees today, a slight reprieve from the frigid temperatures over the past week. I think we've had more snow this January (eight inches or so) than we've had for the past few winters... and the super low temperatures are causing it to stick around much longer than it usually does in the Shenandoah Valley. I hope by now you are mostly shoveled out and that you are enjoying the snowy winter scenes that seem likely to stick around for another week or so! I have good news to report... I closed out 2024 much more safely than I started the year. :-) December 31, 2023 - Ran in the VA Momentum NYE Glow Run 5K, slipped, fell, sprained my ankle and hobbled my way through most of January. December 31, 2024 - Ran in the VA Momentum NYE Glow Run 5K, stayed on my feet and sustained no injuries, despite a very rainy finish.  Two takeaways here... [1] If your 2024 had a rough start, I hope you also had a strong and happy close to your year. [2] VA Momentum puts on some super fun running events -- energizing communities for good -- I hope to see you at one in 2025! Now, then, if you're looking for a fun dinner spot for later this month, consider checking out Rocktown Kitchen, a farm-to-table restaurant on Liberty Street in Harrisonburg, just across from the Farmer's Market. I'm giving away a $50 gift card to Rocktown Kitchen this month to one of you readers of my monthly market report - so click here to enter to win the gift card. And now, on to the real estate data... with a note to you, the reader, before we start... We just closed out 2024, so I'm looking back at a full year of data, and thus there will be a few more charts, and a few more graphs in this report than usual. Read through it all in detail, or scroll and skim, or ignore it all and just email or text me (540-578-0102) to set up a time for me to explain it all to you in person over coffee or breakfast. ;-) First up, the overall residential sales market in 2024...  The chart above outlines sales trends over multiple different timeframes, but the one I'm focusing on today is highlighted and shows the entirety of 2024. There were 12% more home sales in Harrisonburg and Rockingham County in 2024 than in 2023. The median sales price of all homes selling in Harrisonburg and Rockingham County increased by 5% in 2024... to $345,095. Of all of the home sales in 2024:
Here's what's happening in the detached home segment of our local market...  Interestingly... [1] Compared to the 12% increase in all home sales, we have only seen a 6% increase in detached home sales. This means that more of the recovery (12% increase) in the quantity of homes selling was in attached homes. [2] While the market-wide median sales price only increased 5% in 2024... the median sales price of detached homes increased by... 11%. The median sales price of detached homes selling in 2024 was $388,000. So, about those attached home sales...  While we only saw a 6% increase in the number of detached homes that sold in 2024... we saw a 24% increase in attached home sales! That's a lot more townhouse, duplex and condo sales in 2024! But... despite that increase in the number of attached homes that are selling, the median sales price of those attached homes only increased by 2% over the past year... to $306,000. Having sliced and diced sales by property type, let's do so by location as well, starting with the City of Harrisonburg...  As shown above, fewer homes sold in 2024 than 2023 in the City of Harrisonburg. Over the past three years we have seen the number of City home sales decline from 425 to 296 to 283. A significant part of the decline in City home sales is because there is very few new homes are being built to be purchased in the City of Harrisonburg. The number of opportunities to buy a home in the City is almost entirely depend on resale home sales. Meanwhile, in Rockingham County, we are seeing a steady supply of new homes being built, and thus the following chart probably won't surprise you...  Rockingham County has seen 17% more home sales this year than last year. With new construction continuing in multiple neighborhoods in the county, we are likely to continue to see strong home sales in the county over the next few years. Speaking of new home sales... here's a variety of news on that front...  New home sales in Harrisonburg and Rockingham County (mostly Rockingham County) increased 29% in 2024. That said, the number of new home sales in 2024 was actually slightly lower than in 2022. The median sales price of new homes in 2024 was only 1% higher than in 2023... though both years showed a median sales price about 12% higher than in 2022. Given that more and more people want to make Harrisonburg and Rockingham County their home, and given that current mortgage interest rates are keeping lots of existing homeowners from selling their homes, the construction of new homes is an important part of allowing our community to continue to grow. Here are some more details on why we need those new homes if we want buyers to have homes to buy...  Existing home sales increased 6% in 2024... but the 961 existing home sales in 2024 is still 18% lower than in 2022. We saw somewhat of an increase in existing homeowners being willing to sell, but not enough to keep up with buyer demand. Now, on to some graphs to help better understand a few more trends...  A few notes on the lines on the graph above... red = sales per month in 2024 blue = sales per month in 2023 grey = sales per month, on average, between 2020 and 2023 Since May 2024, most 2024 monthly sales counts were above the same month in 2023 with two exceptions... October 2024 sales were slightly below (-1) October 2023. November 2024 sales were drastically higher (+59) than November 2023. December, then, ended about where we'd expect it -- with 89 home sales, compared to 85 last year. Looking ahead, we are likely to see between 75 and 100 home sales per month for the next two months before we get into the busier sales season starting in March. Switching back to viewing the year as a whole, 2024 beat 2023, but lost to the three years before that...  In total, 2024 came in 4th out of 5 spots when looking at the total number of home sales per year for each of the past five years. So, home sales are on the rise again, but just compared to a particularly slow 2023. Speaking of particularly slow... a year(ish) ago is when things slowed most significantly...  Annual home sales steadily declined from 1,728 sales in mid-2022 down to 1,206 sales in December 2023. That was the lowest annual sales we have seen in the past five plus years... and the pace of annual sales has been rising again ever since. But... while we have seen an increase in the number of homes that are selling over the past year... we are seeing a slowing in rate at which the median sales price of those homes is increasing. That was a lot of words to say that after several years of median sales prices increasing by 10% per year, in 2024 the median sales price only increased by 5%. OK. Still a lot of words. Stretching a bit further back in time, we can create a bit more context...  A few things to note related to the 1,347 home sales seen in 2024 in Harrisonburg and Rockingham County... [1] The three years in the past decade when we have seen more sales in a year were ones where home sales activity was fueled on by a COVID-induced home buying spree (more people working from home) and historically low mortgage interest rates. [2] We are now (in 2024) back to the number of home sales we were seeing in a year pre-Covid. I expect we will see the number of home sales continue to increase in our area in 2025. Also shown above, the median sales price increased by 10% - 11% for four years in a row: 2020, 2021, 2022 and 2023. We have now seen a smaller increase (+5%) in the median sales price in 2024 and I expect a similar (5% or less) increase in 2025. Shifting gears a bit, to contract activity, the last two months of 2024 were as slow as you might have expected they would be...  The 91 contracts signed in November 2024 and the 85 signed in December 2024 were about what I expected we would see in the final two months of the year. These tend to be slower months of the year for contract activity -- compared to 120 to 140 contracts being signed in some spring and summer months. Inventory levels are also quite low, as you might expect at this time of year...  Since July 2024, inventory levels have been falling in Harrisonburg and Rockingham County, particularly compared to a year ago. That is to say that there are fewer homes available to a buyer at any given time now compared to a year ago. There are 138 homes currently on the market in Harrisonburg and Rockingham County... compared to 185 a year ago at this time. Finally, let's look at mortgage interest rates...  Everything is new. Everything is still the same. Mortgage interest rose in 2024. They fell. They rose again. The average (30 year fixed) mortgage interest rate closed out 2024 at 6.85%... a smidge above the 6.61% level where it was a year prior... which was another smidge above the 6.42% from a year before that. While it would be wonderful to think we would see mortgage interest rates close to 6%, or a bit below that, in 2025 - I think it is more likely that mortgage interest rates will stay between 6.5% and 7% in the coming year. Phew! You made it to the end. :-) One of the reasons I compile all of this data each month is because I educate myself through the process of researching, analyzing and writing this report. This, then, provides me with a good sense of overall market trends to help me advise home buyers and sellers as they buy and sell houses in Harrisonburg and Rockingham County. If you want to move beyond the basics of these broad trends, I'm happy to chat with you directly. These are the most frequent reasons why I'm hearing from someone like you after I send out this report... 1. I plan to sell my house in the next few months and want to better understand the market in my neighborhood and price range. 2. I hope to buy a home in the next few months and want to better understand the process and the market for what I'm looking to buy. 3. I would like to buy a new (to me) home - but would need to sell my house in order to do so. What does this look like and can this even work in the current market? You might have these questions, or any number of other questions, related to thinking about buying a house, selling your house, or real estate in general. Feel free to reach out if I can be of help to you as you explore these topics in 2025. You can contact me most easily by phone/text at 540-578-0102 or by email here. I'll send you another update on the local housing market in February. I assume by then the current snow on the ground will have melted... maybe? Stay warm! | |
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Will 2025 Be A Good Year To Sell Your House? |
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 Here are some of the reasons why 2025 might be a great year to sell your house AND the reasons why it might not be a great year to sell your house. 2025 could be a great year to sell your house... [1] If you are relocating out of the area. [2] If you need a larger home with more functional space for you and/or your family. [3] If you are ready to downsize to a smaller home because you no longer need all of the space your current home offers. [4] If you need to move to a low-maintenance, one-level home for mobility reasons. [5] If you have are ready to re-invest the equity from your rental property in other areas. 2025 might not be a great year to sell your house... [1] If you don't know what you would buy after you sell. [2] If your monthly housing cost would increase too much given how much lower your current mortgage's interest rate is compared to market rates. [3] If you love your home, neighborhood and location. :-) Most of the people reading this will not sell their home in 2025. If you are one of those who definitely will, or who is trying to determine if you should, feel free to reach out to set up a time to meet and discuss the reasons why it might or might not be the right time to sell your home. | |
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Very Few Building Lots Are Available For Sale For Custom Homes In Our Area |
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 A year ago, I noted that there were only (28) building lots on the market in the HRAR MLS with a Harrisonburg or Rockingham address. Now, there are just (18) such building lots available for sale, including...
Now, certainly, if we broaden the geographic area, we'll find some other options, such as...
But if you are hoping to build a home in or close to Harrisonburg, there are very few options available right now. Furthermore, most current or proposed new developments in our area do not offer building lots for sale. Most current and proposed developments primarily include...
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More And More Homes That Are Selling Are New Homes |
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 Between 2015 and 2020 we were seeing new home sales making up between 10% and 15% of all home sales. Since then, the portion of all home sales that are new home sales has increased significantly. After a small jump to 19% in 2021 we then saw the new home sale share of the market increase to 26% in 2022, 25% in 2023 and then... 29% in 2024. That is to say that almost one in every three homes that sells is a new home. With multiple local, regional and national builders developing communities in Harrisonburg and Rockingham County, I think it is likely that we will continue to see at least 25% of all home sales being new home sales -- and that could increase up to 30% or higher in 2025. | |
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My Predictions For The 2025 Real Estate Market In Harrisonburg, Rockingham County |
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 The last few years in the Harrisonburg and Rockingham County real estate market have not been entirely predictable but let's take another go at it for 2025... 4% Increase In Home Sales The number of home sales per year dropped significantly in 2023 as mortgage interest rates rose and stayed quite high. Despite a continuation of high-ish mortgage interest rates, we saw a 12% increase in the number of home sales last year. I believe we will see further growth in the number of homes selling in Harrisonburg and Rockingham County, but I don't think it will be another year of double digit growth. I am predicting a 4% increase in the number of homes selling in our market during 2025. This will get us back up to 1,400 home sales in a year... but not back up to the 1,500+ level that we saw during 2020, 2021 and 2022. And how about those sales prices...  4% Increase In Median Sales Price After three years of 10% - 11% increases in the median sales price (2021, 2022, 2023) we only saw a 5% increase in that median sales price in 2024. Multiple years of increases in home prices, combined with higher mortgage interest rates, resulted in a smaller increase in the median sales price last year. I am predicting that home prices will rise, again, in 2025 -- but that they will only increase by about 4%. But enough about my predictions -- what about your predictions? Will we see more or fewer home sales in 2025 than in 2024? Will we see higher or lower sales prices in 2025 than in 2024? Email me with your thoughts or predictions! | |
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Reviewing My Predictions From Last Year For The 2024 Real Estate Market |
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 The 2024 real estate surprised me -- at least as far as how many homes were purchased and sold. Mortgage interest rates remained quite high (compared to some of the past five years) throughout 2024, and yet, quite a few home buyers bought homes! Above you'll see actual versus predicted number of home sales in Harrisonburg and Rockingham County within the context of the past few years... [1] Home sales were at or (almost) above 1,500 sales per year through 2020, 2021 and 2022 - due in large part to the Covid-19 pandemic and super low mortgage interest rates. [2] Home sales dropped quite significantly (-23%) in 2023. [3] I predicted that we would see about a 4% increase in home sales in 2024. [4] We actually saw... a 12% increase in home sales in 2024!?! Home sales bounced back much quicker than I thought they would in 2024. And how about those sales prices...  A few things to note above... [1] The median sales price jumped 10% (to 11%) per year in 2021, 2022 and 2023. Wow! [2] I predicted a 5% increase in the median sales price - from $330,000 to $346,500. [3] The actual increase in the median sales price was 4.7% -- from $330,000 to $345,542. So, we'll call that prediction a win once rounded. The median sales price did rise again in 2024, but not by nearly as much as in the three previous years. Stay tuned for my predictions for the 2025 real estate market in Harrisonburg and Rockingham County! | |
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Home Sales On The Rise Again In 2024 |
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 Happy New Year! A few more 2024 home sales might be reported in the HRAR MLS over the next week -- but the total shown above will be relatively close to the total number of home sales for Harrisonburg and Rockingham County last year. A few observations about the graph above... [1] After two years of declining home sales (2022, 2023) we are now see home sales on the rise again in 2024. The final count (at this point) shows a 13% increase in home sales between 2023 and 2024. [2] The large number of home sales in 2020, 2021 and 2022 were at least in part impacted by the Covid-19 pandemic, historically low mortgage interest rates, and a frenzy of buying activity as a result of more and more people working from home during that pandemic. If we ignored those three years of home sales for a moment, we'd find that the 1,339 home sales in 2024 was the highest number of home sales in a year in over 15 years. [3] Home sales declined significantly in 2023 due in part to significant increases in mortgage interest rates. These mortgage interest rates came down a bit in 2024, but not significantly, and yet, home sales rose again in 2024. What should we expect for 2025? I'll look ahead at some predictions for 2025 in the coming days. Stay tuned. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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