Renting
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Leighton Place, To Include 150 Townhomes And 180 Apartments Proposed On Stone Spring Road Across From Preston Lake |
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 We may soon see another residential development near the intersection of Stone Spring Road and Spotswood Trail. Two parcels totaling 25.5 acres are currently zoned A-2 but a developer is proposing that they be rezoned R-5 to allow for the construction of 330 residential units to include 150 townhouses and 180 one and two bedroom apartments. Here's where the new development is being proposed...  The rezoning application and other documents prepared by the County can be viewed here. This new proposed development -- Leighton Place -- is immediately adjacent to the 280 unit rental community, Stone Ridge Crossing, that was approved last month by the Board of Supervisors. | |
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280 Unit Rental Community, Stone Ridge Crossing, Proposed For North End Of Boyers Road |
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 Remember the north end of Boyers Road? It used to be connected to Route 33 but now it ends in a cul-de-sac. The proposed development shown above, Stone Ridge Crossing, is proposed for the west side of the north end of Boyers Road. The proposed developer of this parcel is requesting that Rockingham County rezone 27 +/- acres from A-2 (agricultural) to R-5 (residential) to allow for the construction of this apartment style development. According to the developer's Plan Description in the Rezoning Application Packet in the Planning Commission Packet for August 1, 2023 (tonight), the actual residences will be a mix of single family detached, duplex and townhouse style apartment housing -- but they will all be owned by, and rented by, a single entity. As such, this 280 unit residential developments would all be rentals... with none of the residences offered for sale. The developer intends to include a clubhouse fitness facility, swimming pool, and multiple picnic areas, fire pit and grilling areas, as well as pocket parks. Of the proposed 280 residential units, no more than 33% of the units would be 3-bedroom units and none would be 4-bedroom (or more) units. This proposed development would include up to 280 residential rental units, which would join the list of approximately 3,368 other rental units that are already under construction, approved, planned or proposed in the City Harrisonburg and/or in the areas of Rockingham County just surrounding the City. Here are all of the other potential upcoming rental developments on that list of 3,368 potential new rentals...
I imagine many people in our local community would probably prefer that a new 280 unit residential development would be single family detached homes, duplexes and townhomes offered for sale -- instead of for rent -- but the developer who is proposing the rezoning prefers to keep the residences and rent them to tenants. It will be interesting to see how the Rockingham County staff, Planning Commission and Board of Supervisors respond to this request. The Planning Commission will have a public hearing regarding this proposed rezoning tonight, August 1, at 6:30 PM. | |
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Will We See Thousands Of New Rental Properties In The Harrisonburg Area Over The Next Few Years? |
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 Here's a summary of potential upcoming rental developments in or near Harrisonburg... Altitude Apartments, Phase 2 (102) Bluestone Town Center (~600) Apartments at Peach Grove (460, Peach Grove Avenue) Lingerfelt Development Apartments (376, also on Peach Grove Avenue) Apartments at Regal Cinemas (274) The Wentworth (271, in StonePort) Epoch (265, near the Wellness Center) Valley View Village (420, on Reservoir Street) The Edge (156, on East Market Street) Two41 (142, on East Market Street) Mixed Use on Reservoir Street (100) Wilson Avenue (34, North Main Street) Boyers Crossing (48) Stoney Ridge (72, South Main Street) Chicago Avenue Apartments (48) Thus, there are approximately 3,368 rental units under construction, approved, planned, proposed, etc. This does not include the ~280 unit rental neighborhood that will soon be proposed on the far end of Boyers Road backing up to Mystic Woods Lane. This also does not include the multiple recently completed rental developments such as Preston Lake Apartments, Congers Creek Apartments, Locust Grove Village, etc. If you're looking to rent in or near Harrisonburg, you might have LOTS of options in the coming years. | |
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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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Renting vs Buying a Townhouse at Congers Creek |
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 Most of the townhouses at Congers Creek are being purchased by homeowners, but some are being purchased by investors as rental properties... which means you will likely have the opportunity to buy or rent at Congers Creek in the near future. Let's see how those two options compare... RENT = $2,000 / month. The rental rates I have seen thus far at Congers Creek range between $1,950 and $2,200 per month. These rental rates are for a three level townhouse with a garage and (finished or unfinished) bonus room. BUY = $1,785 / month. With a 90% loan, buying such a townhouse apparently may cost as little/much as $1,711 per month assuming a $300K purchase price and a 5.25% interest rate... and when we add the $75/month association fee, we get to $1,785. Total Rental Payments over 5 Years = $120,000 Total Mortgage Payments over 5 Years = $107,100 Principal Reduction of Mortgage over 5 Years = $21,196 Effective Total Housing Payments over 5 Years = $85,904 Savings over 5 Years = $34,096 As you can see, this builds a somewhat compelling case for buying instead of renting if you are going to be living in this potential townhouse for the next five years. A few other factors to keep in mind....
P.S. I represent the builder at Congers Creek. | |
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The Phoenix at Harrisonburg, A Senior Living Community, Viewed From Above |
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 view a larger photo here If you have wondered what is being built at the intersection of Boyers Road and Stone Spring Road (on the opposite side of Stone Spring Road from Preston Lake) it's a Senior Living Community called The Phoenix at Harrisonburgwhich intends to open early next year. Per the the Phoenix Development Group Partners website, this community will include...
The community will also include "exterior amenities such as a bocce ball court, covered pavilion with fireplace and grill station, and three interior courtyards." | |
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Apartments That Look Like Townhouses Under Construction On Boyers Road |
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 view a larger photo here In addition to the apartments under construction at Preston Lake, and the apartments on Boyers Road being built by Cosner Investments, there are yet more apartments being built on Boyers Road... The apartments -- or townhouses -- or apartments shown above are currently under construction almost directly across Boyers Road from Sentara RMH Medical Center. Each "townhouse" structure actually features two apartments -- one up, and one down. These townhouses are off of Congers Creek Road -- in fact, on the other side of Congers Creek Road from The Townes at Congers Creek, townhouses for sale built by a different developer. So, in conclusion, there are quite a few rental properties are under construction on Boyers Road. Per my best estimations, it looks like this...
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Apartment Complex Under Construction On Boyers Road |
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 view a larger image here If you have drive along Boyers Road lately you may have wondered about the large building starting to be built near Preston Lake. As shown in the photo above, it is a series of buildings that will comprise a large apartment complex. This development, being built by Cosner Investments, would seem likely to be comprised of around 86 apartments as per the original plans proposed to Rockingham County. As described by the developer last year... "Specifically, Locust Grove Village will house no more than 86 individual condominiums containing a mixture of 1-, 2-, and 3-bedroom units. Units will be clustered into four buildings of 20-22 units apiece, with a majority of these units having a townhouse style and appearance. Building corners will be comprised of six condominium units served by a common entry and stairwell. Each pair of buildings will encircle a central green, with each townhouse-style condo having direct access through their own private courtyard. Half of the corner units will have balconies/courtyards that face the common green (interior), while the other half will face the exterior." "The central greens will be improved with tasteful landscaping (mixture of trees and shrubbery), paved walkways, a central gazebo, charcoal grills, and benches, intended to promote resident interaction and sense of community. If desired by residents, allowances will be made for community gardens, to be maintained by the residents themselves, and thereby promoting a sense of pride and ownership within the community. Pedestrian connectivity between the greens will be provided through walkways and a mid-block crosswalk through the parking area." "In sum, Locust Grove Village is intended to serve a growing desirability for attractive, communal living opportunities within a rural setting. Through emphasis of common areas and promotion of interaction between residents, Locust Grove Village will position itself as the premier condominium-based community within Rockingham County." | |
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Preston Lake Apartments, A View From Above |
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 view a larger image here If you haven't driven by (or flown by) lately... Construction is moving along steadily at Preston Lake Apartments -- a rental community being developed adjacent to Preston Lake at the intersection of Boyers Road and Stone Spring Road. Quite a few of the buildings are still being finished, but residents have been moving into the first buildings to have been completed. Find out more about renting a 1, 2 or 3 bedroom apartment at Preston Lake Apartments here. | |
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Preston Lake Apartments Now Available For Lease |
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 view a larger map here After having been under construction for quite a while now, it seems that Preston Lake Apartments are now available for lease. These apartments were built by and are owned by a different developer than the developer who is building out Preston Lake. Here's an overview of the types of apartments that are available...
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142 Unit Multi-Family Development, Two41, Proposed At Intersection Of Blue Ridge Drive, Country Club Road |
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 Bluestone Land, the development entity behind The Colonnade (in downtown Harrisonburg) and Preston Lake Apartments (currently under construction) is proposing to build 142 apartments at the intersection of Blue Ridge Drive and Country Club Court. The proposed site plan is shown above, and here's a rendering of what one of the apartment buildings would look like...  The current owner of the property (alongside the proposed developer) is requesting that the property be rezoned from R-1 to R-5 and is asking for a special use permit to allow for more than 12 units per apartment building. Here are some further details of this proposed community...
You can read more about this here: Updated 2/11/2021: Per the 2/21/2021 Daily News Record, the Planning Commission recommended denial of this rezoning request and City Council sent the request back to Planning Commission for further review. | |
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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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All Of The Developments On Boyers Road |
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 Have you heard about that new development on Boyers Road? There are quite a few of them!
Those are all of the major developments I'm aware of along Boyers Road - but who knows what else is to come along this increasingly busy corridor! | |
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More Details On Preston Lake Apartments, Upscale Apartments Just Outside Harrisonburg |
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 If you are in the market for a recently built, reasonably nice, non-student apartment in or near Harrisonburg, the only current option at scale (aside from much smaller developments) is The Reserve at Stoneport -- located catty-corner from the Sentara RMH Medical Center. Prices at The Reserve at Stoneport currently seem to fall in these ranges...
But now there is another option in town -- or there will be soon. Preston Lake Apartments are currently under construction on Stone Spring Road at its intersection with East Market Street. These apartments are owned by and built by a different entity than the developer/builder of Preston Lake the adjacent residential neighborhood where new homes are being built. Prices at Preston Lake Apartments currently seem to fall into these ranges...
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Renting or Buying A Home Within A 5 Year Time Horizon |
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 If you will only be in your next home for two (or 1, 3, 4 or 5) years -- should you buy that home? Or just rent a home instead? Let's take a look, assuming a price point in the current market of around $175K - which is likely to be a townhouse and might be what you are considering as a first time buyer...  As becomes pretty quickly, above, it doesn't necessarily make much sense to buy if you are only going to be in your home for 1 or 2 years -- and once you get to a time horizon of 4 or more years, it almost certainly makes sense to buy a home. For clarity, let's look at how I'm determining the cost of renting and buying this fictional house... The Total Cost of Renting Includes... Monthly rental rate x 12 x # years Yep, that's it The Total Cost of Buying Includes... Monthly mortgage payment x 12 x # years + closing closing costs when buying your home (3.5%) + cost of selling your home (5% + $1K) + potential maintenance costs (1% / y) - appreciation of your home's value (2% / y) - potential tax benefits of interest paid (int x 40% x 25%) Here's a visual (click for a closer look) as to how those numbers line up over a one through five year time horizon...  I should also note that it is quite possible to be "just fine" from a financial perspective if you buy and only end up being in the home for a year or two if...
As you are thinking through whether you should buy or rent -- at a $175K price point or otherwise -- feel free to touch base with me and I can give you some feedback and advice based on your overall circumstances. | |
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Should You Rent or Buy With a 2, 3 or 5 Year Time Frame? |
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 Should You Rent or Buy With a 2, 3 or 5 Year Time Frame? Looking at two different price points for townhouses ($175K, $225K) a quick analysis would indicate that...
So, buy the townhouse, right? Well, sort of... The comparison above ONLY accounts for the monthly payments and does not account for...
So, let's look at it again, a bit more thoroughly...    Above I have tried to account for ALL of those factors, and looking at a two year window, three year window and five year window. This analysis indicates that you should probably plan to be in your home for 5+ years if you want the total financial transaction(s) to be a net positive. That said, there are, of course, plenty of extenuating circumstances. Many people might buy a $175K house (or townhouse) even if they are planning to be there for only 3 years --- because they want their own home (not their landlord's), or to get in a certain neighborhood, or because of the tax benefits, etc. Every buyer's situation is different, and I'd be happy to help you run an analysis similar to those shown below if you're interested in analyzing your best housing move. | |
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156 Apartments To Be Built on Reservoir Street |
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 Well, it looks like another 156 apartments will be built on Reservoir Street, just outside of the City limits in Rockingham County. The Board of Supervisors recently approved a rezoning of this 6.302 acres to essentially be a second phase of the Robinson Park apartments immediately adjacent to this new project. Per the Daily News Record the 156 apartment complex will be comprised of:
Apparently, the complex will also include a clubhouse and outdoor pool.  Further review of the minutes from the January 23, 2019 meeting of the Board of Supervisors offers these insights...
So, there you have it. More apartments coming soon on Resevoir Street... which may or may not make Harrisonburg a place young alums can call home for decades... | |
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Owners, Operators of Short Term Residential Rentals in Rockingham County to Pay Transient Occupancy Tax |
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 If you are renting part or all of your Rockingham County home out on AirBNB you will need to start collecting and paying a transient occupancy tax of 5% of the gross rent starting January 1, 2019. Read on from yesterday's update from Rockingham County... ### NOTICE TO ALL OWNERS AND OPERATORS OF SHORT TERM RESIDENTIAL RENTALS LOCATED IN ROCKINGHAM COUNTY Beginning January 1, 2019, all owners of residential properties located in Rockingham County, Virginia, who rent all or any portion of a residential property for not more than 30 consecutive days must collect from the tenant the transient occupancy tax of 5% of the gross rent and remit the tax collected to the Commissioner of the Revenue for Rockingham County. The tax must be collected at the time of rental, and the remittance is made quarterly with the filing of a return. Owners and operators of short term rental properties should contact the Office of the Commissioner of the Revenue of Rockingham County for more details and information. 540-564- 3073. ### A short term rental is defined here as being a rental period of less than 30 days. | |
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Lots (and lots) of High End Apartments Being Built |
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 In addition to the 168 apartments about to be built at the intersection of Stone Spring Road and East Market Street (near Preston Lake) -- there are already hundreds now complete at The Reserve at Stoneport. Per my earlier research, it seems this community may contain 408 apartments, with rental rates from $1000 - $1800. How many high end apartments are needed in this area? While only a few years ago no high end apartments existed in our local market, now I believe Stoneport is already nearly entirely leased. How much unmet demand is there for these apartments? Apartment developers don't seem to have met the demand yet. Oh, and also of note in the aerial image above, it seems Dupont Community Credit Union put some solar panels on the roof of their new bank. Nice!  | |
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Renting vs Buying a Townhouse in Harrisonburg |
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 Given continued relatively low interest rates and some increase in home values, let's take a new look at the opportunities of buying versus renting. RENT = $1050/m. There are regularly options for renting a two-story townhouse in Harrisonburg for approximately $1050 / month in Avalon Woods, Beacon Hill, Stonewall Heights, Liberty Square, etc. BUY = $1104/m. With a 95% loan, buying such a townhouse apparently may cost as little/muchas $1,272 per month assuming a $160K purchase price and a 4.7% interest rate per SunTrust Mortgage's payment calculator. So -- at first glace, it would seem to be about $54/month more expensive to buy a townhouse as compared to renting one right now. That said, if we then look at the difference between renting and buying over a five year time period, we start to see a bigger picture... Total Rental Payments over 5 Years = $63,000 Total Mortgage Payments over 5 Years = $66,240 Principal Reduction of Mortgage over 5 Years = $13,025 Effective Total Housing Payments over 5 Years = $53,215 Savings over 5 Years = $9,785 As you can see, this builds a somewhat compelling case for buying instead of renting if you are going to be living in this potential townhouse for the next five years. A few other factors to keep in mind....
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Scott Rogers
Funkhouser Real
Estate Group
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scott@funkhousergroup.com
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