Welcome! This blog tracks the real estate market in the Central Shenandoah Valley, featuring market data and analysis, an exploration of common buying and selling questions, and candid commentary on all things real estate.
If you are interested in discussing any of the topics on this blog, or the details of your specific real estate situation, call or e-mail me!
Buying
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Finding Gray Areas In Inspection and Appraisal Contingencies |
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 It's a crazy market right now. There are definitely many more buyers than sellers in most segments of our local housing market. As such, buyers are having to make difficult decisions about what contingencies to include in their offers. The two prime examples are the INSPECTION and APPRAISAL contingencies. INSPECTION...
APPRAISAL...
But maybe there can be a gray area between having and not having these contingencies in your offer? INSPECTION... Perhaps your offer could be contingent on a home inspection, but...
APPRAISAL... Perhaps your offer of $300K could be contingent on an appraisal, but...
These are some basic examples of how to aim for that gray area between overtly contingent and not at all contingent. If you are buying in this market, have these conversations earlier than later to know what levels of contingencies you are comfortable having in your offer to buy any particular property. | |
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Should You Waive An Inspection Contingency? |
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 Many buyers in many price ranges are finding it difficult to compete against SOOO many other buyers making offers on a house. They are left asking themselves how to make their offer stand out amidst multiple other competitive offers. As a buyer in this crazy market... Should You Wave An Inspection Contingency? As you might expect, it depends. Here are a variety of perspectives to consider... NO. Don't waive the inspection contingency. There could be serious issues with the house -- a failing foundation, mold in the crawlspace, a leaky roof, broken roof trusses, unsafe electrical wiring, and more! An inspection can help root out most issues with a property to give you a full and thorough understanding of the condition of the property you are purchasing. YES. Waive the inspection contingency. You'll end up spending money on your home over the first few years for maintenance or upgrades anyhow, and even if there are some surprises, you can just lump them into that cost of homeownership. YES. Waive the inspection contingency. The house is only __ years sold. What could possibly be wrong with it at this point? YES. Waive the inspection contingency. How else will I actually secure a contract on a house in such a competitive market!? In the end, I suppose it depends both on the house and you... The House: How old is it? Has it been well maintained? How old are the major systems of the house? Were you able to view the basement or crawlspace during a showing? Were there any red flags? You: Are you relatively handy with home repairs or are you overwhelmed by even the slightest need for improvements? Are you comfortable with risk? How badly do you want to buy a house. I am still recommending that my buyer clients include an inspection contingency in their offers but I am being clear about the downside of doing that as it relates to competing with other offers -- and some of my buyer clients are deciding to waive the inspection contingency after all. | |
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Tips For Would Be Townhouse Buyers In A SUPER Competitive Market |
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 Townhouses are selling QUICKLY in and around Harrisonburg. It is not uncommon for reasonably priced townhouses to have 5 to 10 offers within 48 hours of being listed for sale.
I suppose one critical aspect that I did not list above would be to hire a buyer's agent to represent you in finding, pursuing and purchasing your townhome. I'd suggest you select someone who is highly responsive, professional and knowledgeable about the market. Happy townhouse shopping! | |
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Some Would Be Home Buyers Are Deciding NOT To Buy Given The CRAZY Housing Market |
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 Many buyers are feeling a bit overwhelmed by the prospect of trying to buy in the current CRAZY housing market. They find themselves asking...
If you're trying to buy a house right now and you are having some (or all) of these thoughts -- you are not alone. There are many reasons to persevere and to keep on pursuing that goal of buying a house -- and most buyers do seem to be doing that -- though there are also some buyers who are throwing in the towel. Here's how that might look...
It is times like these that I am thankful for all of the counseling classes I took while I was completing my graduate degree from JMU. So, if you think you want to buy, but are are nervous wreck because of the hectic housing market -- feel free to reach out. I'm happy to meet with you to chat about the process and the market. We can call it a home buying meeting or a counseling session -- whichever makes you feel more comfortable. ;-) | |
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Ryan Homes May Be Starting To Help Some Housing Inventory Issues In Rockingham County |
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 Ryan Homes, a regional builder currently building homes in 15 different states including Virginia now has two communities underway in Rockingham County and likely will be bringing more on board in the future. SOUTH PEAK is a community of single level, three bedroom (1343 - 1527 SF) duplexes in McGaheysville with current pricing seeming to be mostly between $275K and $350K. While it appears that this will be a community of 72 duplex, thus far, 35 homes have sold, 2 are under contract and one is listed for sale, at least per the MLS. SHADY CREEK is a community of three and four bedroom (1296 - 1903 SF) single family homes (so far, though I believe attached dwellings are to come) in Grottoes with current pricing seeming to be mostly between $270K and $325K. Thus far, 17 homes are under contract and 4 are listed for sale, at least per the MLS. We are definitely having some inventory issues in Harrisonburg and Rockingham County -- with more buyers wanting to buy than there are sellers willing to sell. New home construction at scale can help to address this unmet buyer demand. Thus far, these communities by Ryan Homes are only hitting two segments of our local market but I believe we will see more communities to come that will likely create inventory in other areas and price ranges in our local market. | |
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Obsessing Over Real Estate Is SO Repetitive These Days |
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 One of my out of town buyer clients recently lamented the fact that he often finds himself doomscrolling on Zillow...
...as he described it, he kept going back to look for new listings and kept seeing the same listing, or saw listings that had gone under contract within hours or days. It's a tough time to be a buyer right now -- especially an out of town buyer who can only view properties virtually. Thus, yes, many buyers finding themselves endlessly scrolling through the bad news of both:
So, how does one stop doomscrolling on Zillow? Here's some advice for how to stop doomscrolling, though it was unrelated to real estate, so I reinterpreted it a bit. :-)
OK - this post started in jest, then turned more serious, and by the end, who knows... Yes, it is a tough time to be a buyer right now whether that manifests itself in doomscrolling on Zillow or otherwise. Be prepared to be patient in waiting for new listings to hit the market, go see them immediately if they might work for you, and be ready to make an offer very quickly. | |
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You Can Buy A New Single Family Home Under $300K, Or Even Under $250K |
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 With home prices rising so much over the past few years if you just took a cursory look at the market you might think your only option for a new home under $250K is a townhouse. That's not actually true. In the past year, (20) new single family (detached) homes sold under $250K in Harrisonburg and Rockingham County for less than $250K. Hard to believe isn't it? See them all here. If we expanded that to homes under $300K, we'll find 36 sales! Not interested in what sold over an entire year? Curious about what is currently on the market? There are 40 new homes under $300K that are currently on the market and under contract and 7 new homes currently for sale under $300K. Many of the new homes under $250K are currently found in Brentwood subdivision where a new section just opened up. Many of the new homes between $250K and $300K are in Shady Creek, in Grottoes, where Ryan Homes just started building homes. Now, it should also be noted that some buyers might look at the new homes available under $250K or under $300K and say...
...all of which are valid conclusions -- but just because some buyers won't choose to buy these new homes under $250K or under $300K based on their style, size or location that doesn't mean that they aren't being built -- or that it is not possible to build them. Also, circling back to the beginning -- it is certainly true that you can spend over $250K on a new townhouse -- with the two current obvious examples being Congers Creek and Crescent Ridge. | |
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No, The Sellers Probably Will Not Wait For You |
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 I cannot overemphasize the importance of buyers seeing a new listing on the first day (or possibly the second) that a house hits the market for sale. Clear time in your schedule. Take off work. Rearrange childcare. Whatever it takes. Many popular, well prepared, well priced, well marketed new listings are going under contract within days and not weeks or months, often with multiple offers. If the seller already has multiple offers after 48 hours on the market...
So -- given that you likely won't be able to convince the seller to wait to accept an offer until you see it a few days after everybody else -- it would seem that you need to see the house on the first or second day it is on the market! Plan accordingly! | |
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The Harrisonburg Area Real Estate Market Is As Strong As Ever Two Months Into 2021! |
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 Happy Thursday morning to you! It's been a busy week on my end, what with St. Patrick's Day yesterday, and my daughter's 13th birthday the day before (Happy Birthday Emily!) so forgive me for the slight delay in getting the news to you that... The Harrisonburg Area Real Estate Market Is As Strong As Ever Two Months Into 2021! Before I dive into the data below, a few quick links...
Now, on to the data...  As shown above, with St. Patrick's Day green numbers for ya, you'll note that...
So -- more home sales, at higher prices, selling more quickly! Sounds like a good time to be a seller and a bit less exciting of a time to be a buyer! What might develop as we finish out March?  You might notice that the 77 home sales seen in February 2021 was higher than last February (63) but was not the strongest recent month of February home sales. There were 81 home sales back in February 2018. Looking ahead to March, will we see more than 110 home sales close? It seems quite possible! Here's the data stacked up a bit differently...  As shown above, the January + February sales pace during 2021 of 182 home sales is the fastest start we've seen in the past several years. This is a good indication (though not a guarantee) that a relatively strong year of home sales lies ahead of us. You've seen a version of this graph below, but it surprises me again every time I see it...  The orange line (above) is tracking the number of home sales per year -- measured each month. Throughout 2019 and into the beginning of 2020 this was steadily increasing, from just below 1300 to nearly 1400. Then, Covid hit -- and within a few months the annual pace of home sales had dropped back down to 1300 sales per year. That's the downward dip shown above. Then, as we made it into the summer and fall (and winter) of 2020, the pace of home sales picked up incredible momentum, and accelerated beyond where we might have expected it to have been otherwise -- as shown with the dashed red line. All the while, the median sales price just kept on climbing, up to its current level of $247,700 as compared to $222,150 a year ago. So, Covid dealt us two surprises -- a rapid slow down and then a fast and furious rebound!  As noted previously, sales prices are on the rise. The median sales price of all detached homes (not duplexes, townhouses or condos) sold in Harrisonburg and Rockingham County (via the HRAR MLS) rose 12% in 2020 -- from $240,000 up to $269,000. If you bought a home in the past year, you likely paid 5% to 15% more than you would have a year prior. Not as fun for you as a buyer -- though the seller on the other end of your purchase transaction likely thoroughly enjoyed that increase! Looking ahead, again...  While we have seen a significant increase in the annual pace of contracts being signed (1364/year up to 1548/year) the number of contracts signed in February did actually drop off a bit from last year. Admittedly, the January 2021 contracts helped keep the Jan/Feb numbers higher this year than last, but this February did have a bit slower pace of contract signing than I expected. Maybe this smaller number of contracts has something to do with inventory levels??  A year-ish ago I thought it was quite something that we had broken through the 200 mark -- and all of a sudden we were in the 190's as far as the number of homes for sale in all of Harrisonburg and Rockingham County. But now -- we might break through the 100 mark?? A month ago there were 107 homes for sale -- now 106. Please, let's keep it to triple digits -- let's not get down to only 95 or 97 homes for sale!? One of the reasons buyers haven't minded (too terribly) that they were paying higher prices for homes over the past year was because mortgage interest rates were soooooo low...  But now, yes, mortgage interest rates are starting to rise a bit. It doesn't seem likely that they will rise dramatically through 2021, but the lows of being below 2.75% might be (??) behind us for good. OK -- I'll wrap it up there for now. A bit less than a month from now I'll send you another update on where we are a full quarter of the way through the year. My how time flies! Until then... 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. | |
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All I Want Is A Four Bedroom, Two Bathroom, 2000 SF House Built In The Past 50 Years Just Outside Harrisonburg For Less Than $500K!?! |
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 It doesn't sound like too big of an ask, right? Those are some pretty broad search terms...
But... as many would-be buyers are discovering... there are very few options on the market if you are looking for this type of housing. In fact, today, only one such option... 2021 Russell Drive (feels like it is in the City but is really in the County) Interestingly, PLENTY of such homes sold in the past year. In the past (365) days there have been (63) homes that have sold with the criteria listed above. So, if you're looking to buy this type of house...
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New Listings Will, In Theory, Start to Pop Soon |
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 The market is moving QUICKLY -- homes are often going under contract in a matter of days instead of weeks -- so it is essential that you know about new listings immediately when they hit the market. Most of my clients use NewListingsInHarrisonburg.com to keep track of new properties coming on the market in Harrisonburg and Rockingham County. You can quickly and easily scroll through the most recent residential listings in Harrisonburg and Rockingham County, view the pertinent details, all of the photographs of the home, an area map, and then quickly and easily share that new listing with a friend, your spouse, your Realtor, etc. You can also sign up to receive an email alert every time there is a new listing....  Check it out, at NewListingsInHarrisonburg.com. | |
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Low Inventory Levels AND Lots Of Listings |
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 It's an interesting conundrum. Inventory levels are really (really!) low right now, but there are plenty of new listings that will come on the market this month and next month and nearly every month this year. So, how and why does this happen? Well, if there aren't many listings... ...and then a bunch of houses are listed for sale... ...but there are plenty of buyers in the market so that those new listings all go under contract quickly... ...we'll be left with... not many listings. The key factor keeping inventory levels so low right now are an abundant number of buyers in the market -- or trying to get into the market -- to buy a home. So long as that supply of buyers stayed steady and strong, we are likely to continue to see low inventory levels. So, if you are a buyer and are feeling glum about the very few choices you have today... ...be encouraged -- plenty of houses will be listed for sale in the next month or so... ...but maybe (sorry!) also be discouraged -- you will likely be competing with quite a few other buyers for each new listing. | |
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Will Buying A Home This Year Or Next Year Result In The Lowest Mortgage Payment? |
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 If you are hoping to minimize the amount of your monthly mortgage payment, should you buy a house this year? Or next year? Well, as shown above, it depends on whether you think home prices will be higher or lower (or the same) next year -- and whether you think mortgage interest rates will be higher or lower (or the same) next year. Most folks think mortgage interest rates will be higher next year than they are now. If so, it's most likely that you'd be better off buying this year rather than next to have a lower monthly payment. Even if rates continue to be this low, if prices continue to rise (as they seem likely to do) then again, you'll be better off buying this year than next. Since it seems relatively unlikely (highly unlikely?) that interest rates will go down over the next year, the only way you'd have a lower mortgage payment next year than you would now is if mortgage interest rates do NOT rise AND homes prices decline. So -- as to whether you should buy this year or next -- you tell me, based on your best guesses as to what interest rates and home prices will do over the next year. My best guess is that you'll pay more in a monthly payment for a house if you buy next year than you would if you buy this year. Now, all that said, we'll have to somehow secure you a home amidst a competitive market with lots of buyers -- but it's possible! | |
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Who Is Winning In The Local Real Estate Market? |
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 Sellers are winning - rather universally. Every market metric works in their favor, making it a rather enjoyable time to sell.
Buyers are losing - in most categories. Buyers are happy about low rates and low unemployment, but otherwise, all market metrics are working against them. Homeowners are winning - they are indifferent to most market fluctuations - but are glad that home values are increasing. | |
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What Could Cause Our Imbalanced Housing Market To Balance Out? |
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 Several of my clients have recently commented on how our local real estate market seems out of balance - with so many more active buyers in the market than there are sellers willing to sell their homes. This dynamic often leads to many buyers making offers on well priced, well prepared, well marketed listings to hit the market in and around Harrisonburg. Sometimes it even leads to buyers offering above (or waaaay above) the list price for homes that they don't want to let slip away. So -- if the market is imbalanced, with sellers having the upper hand, what could help our local market come back into more of a balance? In some ways, it's hard to imagine how we work ourselves out of this imbalance, but here are a few real, imagined or fantastical thoughts...
In the end, there don't seem to be many certain paths forward that would allow for our local housing market to balance out in any significant way. As such, it seems relatively likely that our local housing market will remain strong and at an imbalance that heavily favors sellers. If you're seeing something I'm not - and have predictions for how our local market might balance itself out in the coming year - let me know! | |
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If You Might Sell Your Home and Buy A New One In 2021 You Probably Have These Three Questions |
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 I've talked with several folks over the past few weeks who are thinking about possibly selling their homes this year and it struck me that they all had the same three basic questions. As I have reflected further, I have concluded that these really are the three main questions you should be focusing on if you are considering the sale of your home in 2021...
So, if there have been any conversations floating around your house lately about "maybe we should sell our house and buy a new one" but you have had a hard time figuring out where and how to start thinking about that possible transition, I'll point you to the three questions above. As a starting point for answering those questions, I can pop by your house for a brief meeting to address each of the three areas above...
There are certainly many more questions that you might already have, or that you will have along the way -- but these three questions seem to be the big picture questions that most seller/buyers have when they are considering selling and then buying. Feel free to be in touch if you'd like to schedule a time to meet to discuss these and any other questions. Most folks in this situation don't really know if they will actually sell and buy - which is quite OK. I'm happy to help explore the possibilities with you so you can figure out if a move makes sense for you. | |
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There Seems To Be A Backlog of Home Buyers |
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 If you're a buyer, it's hard to secure a contract on a house these days -- especially under $250K, even under $300K, especially in the City of Harrisonburg. It almost seems like there is a backlog of home buyers all frustrated from not having found something this past fall, or past summer, or past spring -- because homes under $250K or $300K are often seeing 10+ showings and multiple offers in the first two or three days on the market. What is this backlog of buyers causing?
It's a wild and crazy time right now to try to buy a home, at least partly because there is a larger than normal number of buyers frustrated that they haven't been able to buy in the past 6 to 12 months. Perhaps when spring arrives we'll see a rush of newly listed homes which will start to cut into this excess buyer demand? Or perhaps not. Stay tuned! | |
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Why Is Unmet Home Buyer Demand So High In Harrisonburg? |
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 Earlier this week I was chatting with some friends and clients who relocated out of Harrisonburg (out of state) nearly a decade ago. They are now looking to move back to Harrisonburg and are accurately observing that our local housing market is at a drastically different point now than it was a decade (+/-) ago when they left. The most pressing issue at hand for them, as soon-to-be buyers in this market, is the extraordinary high level of unmet home buyer demand. And so we pondered aloud why in the world buyer demand is so high in Harrisonburg. Here's my overly condensed thesis...
Put differently, with some make believe numbers, to illustrate the point... 2010 = population of 50,000 2020 = population of 55,000 Increased population = 5,000 5000 newly built housing options between 2010 and 2020:
The problem, then, is that many more than 500 (10%) of the new population want to buy single family detached homes -- but that is not what has been built over the past decade. Further exacerbating the problem is that plenty of the already existing 50,000 population also wants to move up to a single family detached home, putting more and more pressure on that segment of the market. So - the population is increasing and housing options are increasing, but the housing that is being created is not matching what the expanding population desires. Why!? Basically, it's all about profitability as a developer. For all the ways to develop a 10 acre parcel of land, this is a rough approximation of the ranking of their potential profitability...
At this point, most land being developed is not being developed for single family homes because that is not the most profitable way to develop the land. So long as student housing keeps being rented as soon as it is built, and non-student apartments keep being rented as soon as they are built, and townhouses keep being rented as soon as they are built, and townhouses for sale keep being bought before they are built -- it remains relatively unlikely that land in or close to Harrisonburg will be developed for single family homes. I am now accepting recommendations for more cheery perspectives to write about next week. Call. Text. Email. Help! ;-) | |
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Just Off The Mark. The Value Of Looking At Homes A Bit Beyond Your Typical Search Parameters |
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 If you're looking for a four bedroom home, it might be worthwhile to look at a few homes with three bedrooms. If you plan to buy a home under $300K, it might be worthwhile to look at a few homes priced between $300K and $325K. If you prefer homes built in the past 20 years, it might be worthwhile to view some homes that are 21 - 30 years old. If you know you need 2400 SF, it might be worthwhile to walk through some homes that are 2200 - 2399 SF. If you only want to live 10 minutes from where you work, it might be worthwhile to look at a few homes that are 15 minutes from your job. Sometimes buyers draw firm lines around what will and won't work for them. This is fine, but there is definitely value in walking through some homes that are close to but not within those parameters. Here's why...
So -- loosen up your parameters a bit and look at some houses that are close to what you're looking for but not quite right on the money. | |
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When Should I Start Looking For A Home To Buy If My Lease Ends This Summer? |
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 If you have a lease ending this summer and you are thinking about buying a home instead of renewing that lease, you might think you have PLENTY of time before you need to start looking for a home to purchase. You might actually want to start looking for that new home sooner than you think. Let's imagine that your lease ends June 30th. Here's one potential timeline...
A few details worth mentioning...
Finally, one thing that is not noted above is how this might all play out related to your monthly housing payments...
As you can see, above, in this scenario (closing on home purchase on May 31, lease ends June 30) you would not have any months where you would need to both make a rent payment and a mortgage payment. So -- if your lease ends this summer, and you are looking to buy, you might want to get started on the buying side of things sooner rather than later! | |
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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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