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Will Would Be Home Buyers Have More Competition Two Months From Now Than They Have Today? |
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It seems likely that would-be home buyers will have more competition from other buyers two months from now compared to today. Here's why... [1] Mortgage interest rates have been trending steadily downward since late October. They seem likely to continue to trend downward over the next two months, even if not quite as quickly as they had been dropping. [2] Many more buyers seem to be looking buy homes in the spring than in the winter. [3] Many leases end in spring/summer - so any would-be buyers who are currently renting will be more seriously considering a purchase two months from now more so than they are today. [4] We will likely start to see more listings coming on the market in March and April, which seems to draw even more buyers out into the market. All that is to say that if you are thinking about buying a home sometime in the next six months -- you should carefully evaluate all current listings to see if there is a good fit that might be on the market right now for you to buy. Two months from now you will likely have more competition from other buyers. As an added bonus -- current home sellers who have had their home on the market for more than a few weeks may be more motivated to strike a deal with you than they (or other sellers) will be two months from now. | |
Many Homeowners Are Not Motivated To Sell Their Homes And Do Not Anticipate Being So Motivated Anytime Soon |
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Over the past five-ish years we were all living in a world of rapidly rising home prices, a fast moving real estate market and super low mortgage interest rates. Thus, if you owned a home but saw another home hit the market for sale that tickled your fancy, you might very well decide to sell your home. After all... [1] Your home was worth a good bit more than it was last year or a few years ago. [2] You were certain to be able to secure a contract on your home very quickly. [3] Your new mortgage payment would be oh, so low given 3% - 4% mortgage interest rates. But... some of these factors have changed now, though admittedly, some have not... [1] Your home is still likely worth a good bit more than it was last year or a few years ago. [2] Your home still relatively likely to go under contract quickly, though that is not the case for all homes any longer. [3] Your new mortgage payment will be oh... so... high !?! given mortgage interest rates above 6%. That last point... the potential housing payment for your new place if you decide to sell... is what is keeping many homeowners right where they are. Most homeowners are not very motivated to sell their homes right now -- because of their current low mortgage interest rate compared to the much higher rate if they sold and bought today -- and that low motivation level to sell does not seem positioned to change anytime soon. | |
There Are A Limited Number Of Available Building Lots For Custom Homes In Our Area |
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Just an observation here, but there are currently a very limited number of options for buying a building lot, hiring a home builder and building a custom home. Furthermore, I don't know if that will change much over the next few years. There are (27) building lots on the market (per the HRAR MLS) in or near Harrisonburg -- with a "Harrisonburg" or "Rockingham" address. Of those 27 building lots... 7 are in Crossroads Farm, 9 are in The Springs at Osceola,and the other 11 are scattered around here and there. In the time I have been in real estate (20 years or so) there have been quite a few single family home neighborhoods where future homeowners (or builders) could purchase a building lot to build a home. These included:
Now, there aren't any (or many) undeveloped building lots in these neighborhoods... and I don't know what the next neighborhoods will be to go on this list. Most current new developments or proposed developments seem to be one of three varieties... [1] Apartments [2] Townhouses [3] Detached Homes all to be built by a regional or national builder So, when will we (will we?) see other neighborhoods planned and developed where building lots can be purchased where a builder can be hired to build you a home? | |
Phase One Plat For Bluestone Town Center Proposed To Include 146 Apartments, 106 Townhomes, 38 Manufactured Homes on 28.31 Acres |
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The developers of Bluestone Town Center are proposing a plat for the first phase of the development to include the following property types on 28.31 acres...
A few other interesting details about this upcoming first phase of the development include...
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How Long Have Current Active Resale Listings Been On The Market? |
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The graph above speaks for itself, but I'll point out a few more things that aren't explicitly referenced above... 76% of currently active resale listings (not new homes) have been on the market for more than a month. The median days on market of all 121 active listings is 65 days. That is to say that half of the current resale listings on the market have been on the market for 65 or fewer days... and half have been on the market for 65 or more days. The data above is relative to active listings. Let's contextualize this a bit further by looking at pending listings and then sold listings. Of the 87 resale homes currently under contract, the median days is 33 days. Of the 114 resale homes sold in the past 60 days, the median days on market was 17 days. Of the 894 resale homes that sold in the past 365 days, the median days on market was 7 days. So... Active listings = 65 days Pending listings = 33 days Sold in past 60 days = 17 days Sold over past year = 7 days Days on market -- the time it takes a home to sell -- seems to be drifting upward, at least recently, at least on resale homes. | |
2023 Recap On Our Local Housing Market Shows 23% Fewer Home Sales At 10% Higher Prices |
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Happy New Year, Friends! I hope your 2023 wrapped up nicely and that you had some time with family and friends over the holidays! I had a wonderful time over the past few weeks making tons of great memories with family (including my brother and his family visiting from out of state and so many others), eating lots and lots of delicious food (including plenty of Christmas cookies), relaxing, sleeping in, and I closed out the year by running in (and badly spraining my ankle in) the New Years Eve Glow Run. My ankle buckled after about 2.5 miles (I think when I landed on some uneven ground?) and I managed to cut up my knee as I rolled off the path... so I had to fake my way to the finish line with a bloody knee... As a result, I have found myself limping and hobbling my way into the New Year -- but beyond this temporary mobility setback, I couldn't be more excited for the year ahead. ;-) Below I have outlined a variety of trends we are currently seeing in the local real estate market, but before we get started with the numbers and charts and graphs... each month I provide a giveaway, of sorts, for readers of my monthly market report. This month I'm highlighting one of my favorite sandwich spots downtown... Lola's Delicatessen. They create some amazing sandwiches and are a great spot to stop for lunch in downtown Harrisonburg. If you haven't checked out Lola's -- you should -- and click here to enter your name for a chance to win a $50 gift certificate to Lola's Delicatessen! Now, let's take a look at some data on our local housing market... First up, the big picture of where we ended up after a full year of real estate data in Harrisonburg and Rockingham County in 2023... We continue to see fewer homes selling in Harrisonburg and Rockingham County. After a 6% decline in the number of homes selling between 2021 and 2022... we saw a much larger, 23%, decline in the number of homes selling in our market in 2023. As we'll see on a later graph, this is the lowest number of homes selling in quite a few years. The prices of those homes that are selling continue to rise, quickly. After an 11% increase in the median sales price in 2022, we saw a very similar, 10%, increase in the median sales price in 2023. As we'll see on a later graph, this is the highest median price we have seen in this area, ever. Let's now use that 23% drop in the number of homes selling and that 10% increase in median homes prices as a benchmark against which to understand other similar but slightly different trends in 2023... The chart above analyzes the sale of only homes located in the City of Harrisonburg. Compared to the market-wide 23% drop in number of homes selling and 10% increase in median sales prices... [1] The number of homes selling in the City of Harrisonburg declined even further (31%) than the market-wide (23%) change in home sales. [2] The median sales prices of homes selling in the City of Harrisonburg increased even more (+12%) than all homes in the market (+10%). Now, beyond location, let's break things down briefly by property type... The chart above evaluates only detached homes (single family homes) in the City of Harrisonburg and Rockingham County. Compared to the market-wide 23% drop in number of homes selling and 10% increase in median sales prices... [1] The number of detached homes selling didn't decline quite as far (-20%) as the market overall (-23%) in 2023. [2] The median price of detached homes only increased 7% over the past year, as compared to the market-wide increase of 10%. This a good example of why every homeowner in Harrisonburg and Rockingham County shouldn't necessarily assume that their home's value increased by 10% over the past year. If you own a detached home that change may very well have only been 7%. And how about those attached homes? The chart above evaluates only attached homes (duplexes, townhomes, condos) in the City of Harrisonburg and Rockingham County. Compared to the market-wide 23% drop in number of homes selling and 10% increase in median sales prices... [1] We saw a somewhat larger decline (-31%) in the number of attached homes selling in 2023 compared to the overall market (-23%). [2] We saw a much (!!) larger increase in the median sales price of these attached homes (+20%) as compared to the overall market (+10%). But... before you assume that your attached home increased in value by 20% over the past year... remember that plenty of these attached homes were new homes, thus selling at higher prices, thus helping elevate this median sales price. Speaking of new homes, let's look at how things trended for just the existing homes in our market... When looking at only existing home sales (not sales of new homes) we find... [1] The decline in existing home sales is exactly in line (-23%) with the overall market. [2] The median sales price of existing homes only rose 7% over the past year, compared to the market-wide increase of 10%. If you love the data and want to dig into these charts and related charts even further, you can do so here. :-) Now, let's see if some pictures (graphs) can help us further understand the current state of our local housing market and where we might be heading next... The graph above tracks the number of home sales that took place each month in 2023 (red line), 2022 (blue line) and the average number taking place per month over four years (2019-2022). As you can see from the shaded yellow area, all through the summer and through most of the fall we were seeing monthly home sales at levels quite a bit below last year's levels. But... then came November and December. In those final two months of the year we started to see the most recent year of home sales (2023) almost catching back up to the same month of home sales in 2022. To put things into an even longer / broader perspective... The current annual trend of home sales in the City and County has been falling (blue line) for the past year and a half. This annual sales pace peaked at 1,727 home sales in a year back in June 2022... but has been falling ever since. The current pace of 1,202 home sales a year is the lowest in many years! The current annualized median sales price in the City and County has been rising for just about a decade now, and at $330,000 it is at the highest point point it has ever been in our local area. To be clear, we've been setting new annual records for the median sales price for each of the past five (+) years -- so the "highest ever" isn't a new phenomenon -- it has been happening year after year since 2018. If you own a home, look at the next graph. If you don't... maybe don't look at the next graph? :-/ As shown above, it has been a LOVELY time to have owned a home over the past five years. Home prices have been blazing their way upward between 2018 and 2023 with a total of a 56% increase in the median sales price during that timeframe! What happens next, you might ask? I think it is highly unlikely that we will see another 56% increase in the median sales price over the next five years... but home values do seem poised to continue to increase in our local area over the next few years, even if not as quickly. And now to help you visualize the faster than the overall market increases in the median sales price of attached homes... Indeed, as shown above, the median sales price of attached homes (townhouses, duplexes, condos) is increasing QUICKLY! Between 2021 and 2022 we saw a 9% increase in the median sales price of attached homes in Harrisonburg and Rockingham County. In 2023, we saw a 22% increase in this median sales price! Again, at least a portion of this is the influence of higher prices of new attached homes -- but regardless of how you slice and dice the data, the price of attached homes is rising, quickly. This next graph looks at new (vs. existing) home sales -- in two ways... First, we should note that the number of both existing homes (blue bars) and new homes (green bars) declined between 2022 and 2023. We saw fewer sellers selling and buyers buying -- both existing homes and new homes. But... five years ago new home comprised 11% of the total number of home sales in 2018... and this past year new home sales made up a much larger 26% share of overall home sales. I expect that we will continue to see a significant share of total home sales being new home sales... especially since so many existing homeowners (would be sellers) have very low fixed mortgage interest rates and won't be all that excited to sell their homes while interest rates are still at/above 6%. Now, looking at some of the most recent market activity... contracts being signed... The red line above shows the number of contracts signed per month compared to the same month last year in a blue line. You'll note that most of this year's (red) data points are a good bit below last year. But... not November of December. Contract activity this November snuck (barely) past last November... and contract activity this December blasted past last December with 105 contracts this December (2023) compared to only 67 the prior December (2022). And, as you might imagine, the increased pace at which contracts were signed in those two months pushed the "pending sales" numbers past where we were a year ago... For most of 2023 we saw pending sales levels (total number of under contract properties) below where they were in the same month last year. But... that changed in October 2023 and contract activity in November and December pushed the pending sales numbers well ahead of where things were a year ago. We closed out 2022 with 189 properties under contract... compared to 246 properties under contract in December 2023! Have these contracts being signed start to make a dent in inventory levels that were otherwise rising? Good guess... After seeing steady (rather rapid) increases in inventory levels between June 2023 and October 2023 (131 up to 230) those inventory levels started to decline again in November (to 207) and followed that trend in December (down to 185). Certainly, a higher than expected number of buyers signing contracts goes a long way towards reducing inventory levels. Was there anything else that declined, similarly, in November and December 2023? Let's see... Indeed, if we're looking for at least one of the answers to why contract activity rose and inventory levels decline in November and December -- it's likely that we are looking at it above. Mortgage interest rates rose throughout most of 2023 from a low of 6.13% in January all the way up to a peak of 7.79% in October. But... they have been falling steadily since that time -- and in just two months they have dropped all the way back down to 6.61%. I suppose it's no surprise, then, that we saw contract activity start to tick back up in November and December -- it became (slightly, relatively, progressively) more affordable to do so in November and again in December! That, then, brings us to the end of the charts and graphs. So, let's take a look at what various people ought to be focusing on as they look ahead to the remainder of 2024. If your home is on the market now but not yet under contract... Lower mortgage interest rates seems to be bringing new buyers to the table for many properties. Let's hope that is the case for your home, but let's also examine our current pricing and determine whether an adjustment might be necessary to make your house attractive enough to buyers. If you plan to sell your home in 2024... Preparing your house well will likely be more important than ever this year so let's start developing and implementing those plans sooner rather than later. We'll also need to make sure to price your home appropriately to sell for the best possible price for you -- but also in a timeframe that works best for you. If you plan to buy a home in 2024... If it's been a few months since you talked to your lender, do so again soon. Mortgage interest rates have dropped quite a bit and your projected monthly payments will likely be lower than you had anticipated. Keep in mind that many new listings are likely to go under contract very quickly again in 2024, so be ready to go see new listings quickly and be prepared to make a speedy-ish decision about buying. If you own your home and don't plan to sell it anytime soon... Congrats to you on your (likely) ever increasing home equity. Enjoy the ride, and enjoy the likely low mortgage interest rate on your mortgage. :-) If you're me... Try really, really hard not to run for at least the next few weeks in order to follow the doc's orders and to avoid further injury to my ankle. And for ALL OF YOU reading this market report... If I can be of help to you related to real estate, or otherwise, don't hesitate to reach out. You can contact me most easily at 540-578-0102 (call/text) or by email here. I'll send you another update in about a month... now, who wants to guess how much snow we'll see between now and then? A foot? A few inches? None??? | |
An Increasing Portion Of Home Sales Are New Home Sales |
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Between 2015 and 2020 the portion of annual home sales that were new homes ranged from between 10% and 15% per year. But... we started to see the share of new home sales increase significantly in 2021 when the shared of new home sales jumped up to 19% of total home sales. Then, in 2022 that rose to 26% and dropped off a touch in 2023 to 25% of all home sales being new homes. A few thoughts regarding this trend... [1] New home sales are and will continue to be an important segment of our local housing market given that our local population is increasing. [2] This increase in the share of new home sales in 2021 (and continuing through 2022 and 2023) coincides with when we started seeing more regional or national home builders in our marketplace. The three main regional or national builders we are seeing develop communities in our area are Evergreen Homes, Ryan Homes and DR Horton. [3] Super low mortgage interest rates between 2019 and 2022 has resulted in a LOT of homeowners currently having very low interest rates (below 4%) on their current mortgages. This will likely result in less turnover (resale) of existing homes over the next year or two so long as current mortgage interest rates stay at or above 6%. | |
My Predictions For The 2024 Real Estate Market In Harrisonburg, Rockingham County |
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The real estate market has been anything but predictable over the past few years, but read on for my predictions for what we'll see in the Harrisonburg and Rockingham County real estate market this year... 4% Increase In Number of Home Sales As shown above, I am predicting that we will see a 4% increase in the number of homes selling in Harrisonburg and Rockingham County in 2024 -- an increase from 1,202 home sales last year up to 1,250 home sales this year. If we do indeed see 1,250 home sales in 2024 this will be the second slowest year of home sales since 2015. I think we'll see (4%) more home sales this year than last because we are starting to see mortgage interest rates decline after they hit 20+ year highs. Over the past two-ish months the average 30 year fixed mortgage interest rate has dropped from 7.8% to 6.6%. I suspect that lower mortgage interest rates this year than last will lead to slightly more (4%) home sales this year than last. I am not, however, envisioning a 10% or 20% increase in home sales as interest rates above 6% will still likely keep many homeowners in their homes (not selling) if they have an interest rate below 4% -- and most homeowners with mortgages do have rates that low, so long as they have not bought in the past two years. So, I'm predicting we'll see slightly more (4%) home sales this year (1,250) than last, but certainly not much of a rebound towards the 1,400+ home sales we saw in 2020 (1,495 sales), 2021 (1,668 sales) and 2022 (1,564 sales). And how about those sales prices... We have seen steady gains in the median sales price over the past several years... 2021 = +10% 2022 = +11% 2023 = +10% Despite three years in a row of double digit increases in the median sales price, you'll note that I am only predicting a 5% increase of the median sales price in 2024. I do think that continued buyer demand in the context of limited seller supply will keep prices rising, but I don't think they will rise as much as they have for the past three years. The inflation rate was above 5% between May 2021 and March 2023, which I believe makes the above increases in the median sales price seem even larger than they were once you consider them in the context of changes in inflation and the consumer price index. The inflation rate is now back down to around 3%, but mortgage interest rates (which directly affect house payment affordability) are still above 6%. As such, I think we will continue to see home prices rise, but not quite as quickly as we saw in 2021, 2022 and 2023. But enough about my predictions -- what about your predictions? Will we see more or fewer home sales in 2024 than in 2023? Will we see higher or lower sales prices in 2024 than in 2023? Email me with your thoughts or predictions! | |
Reviewing My Predictions From Last January For The 2023 Real Estate Market |
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Well... my predictions for last year's local housing market weren't exactly spot on. :-) Let's take a look. 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] We saw a decline in home sales between 2021 and 2022 -- and I was predicting another decline in 2023. [2] I predicted a 7% decline in annual home sales. [3] We ended up seeing a 23% decline in annual home sales! So, yes, the number of homes selling in our area did indeed decline -- but much further than I had predicted. And how about sales prices... Again, the realities of the 2023 real estate market didn't quite match my predictions... [1] We saw an 11% increase in the median sales price in 2022. [2] I predicted a smaller (5%) increase in the median sales price for 2023. [3] We ended up seeing a 10% increase in the median sales price last year. So... the market slowed down more than I thought it would... and median sales prices rose much more than I thought they would. But don't worry... soon I'll put my prediction failures behind me and will make some new predictions for 2024. :-) | |
The Median Sales Price Of Detached Homes Has Been Rising Faster Than Attached Homes In The City Of Harrisonburg |
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The median sales price both detached and attached homes has been rising rapidly in the City of Harrisonburg over the past eight years -- but the median sales price of detached homes has been rising somewhat faster than that of attached homes. Over the past four years we have seen:
Over the past eight years we have seen:
Looking ahead, I suspect we will continue to see both of these metrics rise... but we will likely still see detached home prices increasing faster than attached home prices. | |
Number Of Homes Selling Per Year In Harrisonburg And Rockingham County |
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A few more 2023 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] The 1,188 home sales that took place last year was the lowest number of home sales since all the way back in 2015. [2] Interestingly, annual home sales peaked in 2005 at 1,669 home sales -- and then again at 1,668 home sales in 2021. Will we ever get up to that 1,670 mark? ;-) [3] After the 2005 peak of 1,669 home sales, we saw declines in the number of home sales for five straight years. Since the 2021 peak of 1,668 home sales we have seen two years of declines -- will we see another in 2024? [4] The peak of 1,668 home sales in 2021 was the culmination of a long run of year after year growth in annual home sales with 10 out of the 11 previous years showing an increase (green bar) in annual home sales. Mortgage interest rates jumped to 22 year highs in 2023, which significantly impacted the number of homes that sold. Now that mortgage interest rates are coming back down, somewhat, will that result in a leveling off of the decline in the number of homes that are selling? I think it is too early to predict whether we'll see more 2024 home sales than in 2023 -- but I'll go ahead and make predictions anyhow in the coming days. :-) | |
Median Sales Price In A Larger (Longer) Context |
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The graph above tracks the median sales price each year for the past 20+ years in Harrisonburg and Rockingham County based on home sales recorded in the HRAR MLS. You'll note that... [1] Home prices increased rapidly (more than 10% per year) between 2004 and 2006. [2] Home prices then stayed relatively level for just over a decade, 2006 through 2016) with a few years of declines and a few years of increases. [3] Home prices started to climb again, though at a pace of less than 10% per year between 2015 and 2020. [4] Home prices have increased by 10% per year or more for each of the past three years, between 2021 and 2023. What are your predictions for what we will see over the next few years? | |
Will Your New Years Resolution Be To Buy A House? |
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For whatever reason, the close of one year and the start of a new year cause many of us to pause and reflect on the big picture. What do we hope will remain the same in the new year? What do we hope to change in the new year? If you are considering a home purchase in the new year, here's one bit of welcome news... Mortgage interest rates have been falling steadily for the past eight weeks! In October, the average 30 year fixed mortgage interest rate peaked at 7.79%. Since that time, they have dropped all the way down to 6.67%. Rates actually started the year (Jan 2023) at 6.48% -- so we're closing out the year a touch higher than that, but things are headed in the right direction. It definitely seems possible that we'll see mortgage interest rates between 6% and 6.5% some time in the first few months of 2024. So, if your new years resolution is to buy a home, let's set up a time to meet to discuss the process and the market -- and you should talk to a lender sooner rather than later to get prequalified for a mortgage. | |
Home Buyers Are Signing More Contracts This December Than Last |
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Perhaps it is a result of mortgage interesting rates starting to decline. Perhaps it is a result of what homes happen to be offered for sale right now. Perhaps it is a result of growing confidence that the economy is not headed towards a recession. Whatever the reason... ...contract activity is quite a bit higher (74 contracts) this December as compared to last December (50 contracts) when looking at contracts being signed in the first 20 days of the month. | |
New Indoor Recreation Facility, Crossroads Field House, Being Built At Rockingham Park |
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A new, $13.5 million, indoor recreation facility is being built at Rockingham Park and is estimated to be complete by the end of 2025. The facility will be called Crossroads Field House and will include:
In 2019, Rockingham County increased its transient occupancy tax from 2% to 5%. The new/extra 3% of tax revenue from spending by people visiting our area to be used for tourism related investments. Read more about Crossroads Field House in the Daily News Record here... Contractors Break Ground For Indoor Recreation Center At Rockingham Park | |
94 New City Townhomes Proposed On Pear Street In Cobblers Valley, Zephyr Hill |
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Ryan Homes is in the process of developing a neighborhood called Cobblers Valley, on Pear Street, in Rockingham County. The portion of the development to be built in Rockingham County is intended to include:
There is also a small portion of the development that will exist in the City of Harrisonburg, to include 32 townhomes, highlighted in purple above. A new rezoning to go before the Planning Commission this evening would allow for an additional 21 townhouses, highlighted in blue above. A second rezoning to go before the Planning Commission this evening would allow for an additional 41 townhomes, highlighted in red/orange above. My understanding is that the 53 townhomes (32 +21) would be a part of Cobblers Valley, but that the 41 townhomes would be a separate development, called Zephyr Hill, which already includes 55 planned townhomes. View City documents related to the rezoning and special use permit requests here (21 townhomes) and here (41 townhomes). | |
Proposed Expansion Of Student Housing Complex, 865 East, To Include 60 More Apartments For A Total Of 160 |
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The student housing development at the corner of Port Republic Road and Devon Lane -- 865 East -- may be expanding in the near future. The owner has requested that the City rezone the property and provide a special use permit to allow for an expansion of this mixed use property. 865 East currently features 100 apartments and retail on the ground level. The proposed addition would include 60 more apartments connected to the first building via an elevated breezeway. Here is the potential layout of the addition... Here's a slightly larger view of the potential new profile of the building and addition, connected by an elevated breezeway... The Planning Commission reviewed this request earlier this week (details here) and they recommended that City Council approve the rezoning and special use permit to allow for this expansion of 865 East. | |
Despite Fewer Home Sales, We Are Seeing Higher Prices, And Recently, More Contracts And Lower Inventory Levels |
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Happy Friday afternoon, Friends! I hope that your week has gone well and that you are looking forward to the next few weeks - presumably with some holiday celebrations, rest, relaxation and time with family and friends! Whether you are staying here or traveling afar, I hope it is a fulfilling and meaningful time for you and that you are able to spend some time with your loved ones! Before I dive into the housing data, I'd like to invite you to join me at a fun concert in January. The Steel Wheels are putting on an album release show with special guest Lindsay Lou on Saturday, January 20th at 7:00 PM in JMU's Wilson Hall. You can buy tickets online from JMU here, or... click here to enter to win the pair of free tickets I'm giving away! Regardless of whether you win the pair of free tickets, or buy your own tickets, I hope to see you in Wilson Hall in January to hear The Steel Wheels and Lindsay Lou! And now, on to the housing data and trends in our local market, starting with a few key indicators for our overall market... A few observations related to the data above... [1] Looking just at November sales data, we see a striking year over decline from 2021 through 2022 to 2023 when examining the number of homes that are selling each November. Two years ago there were 138 November home sales... last year only 93... and this year just 69 home sales in November. While it's only one month of sales data, that is a 50% decline over the past two years. It was a particularly slow November. :-) [2] When looking at the first eleven months of the year (the year is almost over!?) we see that there have been 25% fewer home sales this year (1,117 in 2023) as compared to last year (1,482 in 2022) in Harrisonburg and Rockingham County. It was markedly slower year this year than last. [3] Despite fewer home sales taking place this year, home prices keep on rising. The median sales price of all homes sold in the first eleven months of last year was $299,900... and this year it was 10% higher at $330,000. So, fewer home sales, but higher prices. Next up, one particular segment of our local market that has seen a particularly striking change... the City of Harrisonburg... I suppose I should have highlighted one other bit of data on data table above -- the first row. Pretend it is highlighted too... [1] With only 13 home sales in the City of Harrisonburg this November, we have seen a 52% decline compared to last year and a 72% decline as compared to two Novembers ago. Again, this is just one month, but still. If you want to buy a home in the City of Harrisonburg, it has been a tough time to try to do so. Very few homes are selling in the City. [2] A few lines down in the data table you'll see I have highlighted the data for the past six months. Over the past six months of this year we have seen 145 home sales in the City... compared to 296 in the same six months two years ago. Again, a rather striking decline... of 52% over two years. As I alluded to above, this is mainly a supply issue... there aren't enough sellers willing to sell this year to allow the same number of City home sales to take place. [3] In that same two year period I have referenced above, the median sales price of a home sold in the City has increased from $230,000 to $295,500! That is a 28% increase in the price of homes selling in the City... over a span of just two years. Now, let's look at existing home sales only (excluding new home sales) to contextualize the 10% increase in home sales prices in the overall market that I referenced earlier... All the way at the bottom of the data table above you'll note that when we look at the median sales price of existing homes only, it has risen by only 6% over the past year, not 10%. What does this mean? [1] The value of existing homes has not necessarily risen 10% over the past year in Harrisonburg and Rockingham County as was suggested when looking at the entire market of existing and new home sales. Existing homes (resale homes) prices have only actually increased by 6% over the past year. [2] The increases in new home sales prices over the past year, and the number of new versus existing home sales, have combined to drive the overall median sales price of all homes (new and existing) up 10% over the past year. Let's simplify things... for all you homeowners out there... [1] Don't assume that your home has increased in value by 10% over the past year, because the existing home median sales price has only increased by 6% over the past year. [2] Don't assume that your home has increased in value by 6% over the past year. It might have. Or, that increase might be somewhat larger, or somewhat smaller. The change in the median sales price is a general indicator of changes in the overall market, not a specific indicator that each and every home in a market area has shared that same change in value. Now, let's reflect on a moment on what a slooooooowwww November it was as far as the number of homes selling in Harrisonburg and Rockingham County... There were fewer home sales in Harrisonburg and Rockingham County in November 2023 than in any other month in 2023... and fewer than in any month in 2022... and fewer than in any month in 2021. But, keep on reading for some signs that perhaps we are seeing a slight reversal of this slow down. First, here's that downward ski slope (blue) of the number of homes are selling in a year's time in Harrisonburg and Rockingham County... The annual pace of home sales in the City + County has now declined to 1,205 home sales... which is the slowest annual rate of home sales in over five years! But yet, as we have seen for quite some time now... fewer home sales is not causing home prices to also start declining... in fact, the further home sales have declined, the higher sales prices have increased! These two trends are an indicator that while there are certainly fewer buyers buying, it is likely at least partly a result of fewer sellers being willing to sell. If we were seeing a decline in buyer interest and we were seeing the same number of sellers wanting to sell, then we could more reasonably think home prices might start to decline -- but that's not where we are right now in the local housing market. Let's say you sold your house in 2019 and left town and decided to move back just four years later in 2023. Oof. Here's what you'd find... When you (the imaginary you) left town in 2019 the median sales price of homes in Harrisonburg and Rockingham County was only $223,000. Now... just four years later, that median sales price has shot upwards to $330,000. That is a $107K increase in just four years. This is yet another view into some tricky timing aspects of when folks bought or didn't buy a home in this area... [1] If you bought your home in 2020 or prior, and still own it, you're in great shape. You likely paid much less for your home than it is worth now and you likely have a very low mortgage interest rate. [2] If you bought your home in 2021 or 2022, you're likely still in great shape as to how much your home value has increased, and you might have a great mortgage interest rate or not quite as great. [3] If you didn't buy a home and are working on buying one now, you are buying at the highest prices we have seen lately (until 2024 prices) and at higher mortgage interest rates than we've seen in over a decade. If you are thinking about buying a home right now, does #3 above make you want to pause and think twice before buying? If you don't buy in 2023 (yes, I know there are only 16 days left) you'll likely be paying an ever higher price in 2024 or 2025. This is not to say that everyone should buy a home right away, but many buyers who have been waiting to buy for the past few years because prices were increasing (and they hoped they would decline) likely wish they had gone ahead and bought last year, earlier this year, etc. One of the other metrics I follow is how many new versus existing homes are selling, and we have seen a bit of a shift in this break down in 2023... Last year, in 2022, we saw a decline in existing home sales compared to 2021... but new home sales kept on rising. Not so in 2023. When comparing this year (2023) to last year (2022) we see that existing home sales have declined... and new home sales have declined as well. We have also seen *the highest* mortgage interest rates in many (many!) years in 2023, which is likely a major contributor to this slow down in both existing and new home sales. But... what follows are a few slight changes in direction in our local market as of the past month... Monthly contract activity in 2023 (red line above) has been below 2022 (blue line) more often than not over the past six months, but in November... contract activity rose above where it was last November. Hmmm... why could that be... I wonder if mortgage interest rates started to decline from their 20+ year peak? And how about the number of homes that are under contract in total... As shown above, we saw a big jump in the number of pending (under contract) homes through the month of November. There are 262 homes under contract right now, compared to only 201 a year ago. This is a significant improvement from last month when we were even with the prior year, and an even more significant improvement from the prior six (plus) months when pending home sales were lagging significantly behind last year. Hmmm... why could that be... I wonder if mortgage interest rates started to decline from their 20+ year peak? Next up (before we get to mortgage interest rates) let's look at inventory levels... After four months of big increases in inventory levels in Harrisonburg and Rockingham County -- from 131 homes for sale up to 230 homes for sale -- we have now seen inventory levels start to decline again. Perhaps this is a result of more contract activity (causing inventory levels to drop as homes go under contract) or perhaps it is fewer sellers putting their home on the market during the holidays -- but regardless, November showed at least a temporary reversal in the trend of increasing inventory levels. Now, then, how about those mortgage interest rates... Indeed, mortgage interest rates are dropping. At this point it seems rates peaked at 7.79% at the end of October. Since that time, as shown, they dropped to 7.22%. Since the end of November, not shown, they have dropped even further... to 6.95%. Certainly, the three years or so when rates stayed below 4% were *not* normal times... and rates below 4% were *not* normal -- but it's been tough for many would be home buyers to afford a home (or to rationalize paying the requisite mortgage payment) over the past year with mortgage interest rates above 6%, and for quite a few months over 7%. The pace of sales slowed the most in Harrisonburg and Rockingham County over the past few months with mortgage interest rates over 7%. The news that they have now broken back down through that barrier to six-point-something is welcome news for home buyers as we head towards 2024. I'll wrap things up there for now, though if you want even more charts and graphs you can review them all here. At this point in our local housing market, we're mostly looking ahead towards 2024, so here are a few thoughts for a variety of positions you might find yourself in... If your home is on the market now but not under contract... You may very well find renewed interest from buyers after the first of the year, especially with slightly lower mortgage interest rates -- but you should make sure your home is priced appropriately. If a price reduction is in order, it might make sense to wait until just after January 1 to make that change since there will be less buyer activity than normal over the next few weeks. If you plan to sell your home in 2024... Let's chat sooner rather than later about pricing, preparation and timing. It's not enough any longer to simply whisper "I'm selling" out your front door to bring on the throngs of eager buyers with 3% mortgage interest rates. We'll want to make sure to price your home appropriately, prepare it well to show best to buyers and market it thoroughly from day one but knowing that the marketing may need to continue on for a few weeks or more. If you plan to buy a home in 2024... It seems very likely that you'll be financing your purchase with a lower mortgage interest rate than would have been available to you over the past few months, which is good news. That said, with home prices continuing to climb, your projected monthly payment might still be higher than you prefer. It's important to talk to a lender early in the process to understand how much you could spend and to consider how much you want to spend on your next home. If you own a home and don't plan to sell it anytime soon... Enjoy your likely increasing home value and your likely low mortgage interest rate. It's been a great few years to own a home... a much better than average, much better than normal, few years! And for any and all of you... if I can be of help to you related to real estate, or otherwise, don't hesitate to reach out. You can contact me most easily at 540-578-0102 (call/text) or by email here. I hope you and your family have a wonderful holiday season and I look forward to connecting with you in 2024! | |
Tuscan Village, A New Community To Include 57 Townhomes, 54 Apartments, 2 Single Family Homes, Proposed Near Intersection Of Keezletown Road and Country Club Road |
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The Harrisonburg Planning Commission considered a request last evening for a new community proposed to be built near the intersection of Keezletown Road and Country Club Road. This potential new community would feature 57 townhomes and 54 apartments and would be developed by Scripture Communities, the builder/developer who has also developed Stone Spring Village, Avalon Woods, Heritage Estates, Liberty Square, The Glen at Cross Keys, The Townes at Bluestone, and is currently developing The Townes at Congers Creek. Of note - I represent this builder/developer and have been involved in the planning of this potential new community. The architectural inspiration for this new community comes from the stone and stucco of Italy and the builder plans to incorporate these elements into the exterior of all of the townhomes and apartments. Below are two renderings of the plans for the townhome section of the neighborhood... A few other items to note about this potential new community in the City of Harrisonburg...
Multiple people spoke in favor of this request at the Planning Commission and a few others raised concerns. The concerns that were raised were primarily related to traffic on the roads adjacent to the potential new community -- and stormwater management. The developer will be responsible for ensuring that the development does not create additional stormwater coming off the site to neighboring properties -- and the City has future plans to improve both adjacent roads, though they are not yet funded. City planning staff recommended that the rezoning request (and other releated requests) be approved and the Planning Commission unanimously voted to recommend that City Council approve the requests to allow for this development to move forward. City Council will review this request in January. | |
47 Home Sellers Reduced Their List Price In The Past 30 Days And 15 Of Those Listings Are Now Under Contract |
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One indication that our local housing market isn't quite as overheated as it used to be is that we are starting to see sellers making price adjustments. For a few years there, nearly every home listed for sale went under contract in a matter of days, often with multiple offers and escalation clauses. Now, many (most) listings are still going under contract quickly -- but plenty of sellers are finding themselves needing to make a price adjustment to generate enough buyer interest to have an offer to consider. As a snapshot of those price reductions and their impact... Over the past 30 days... we have seen price changes on 47 homes in Harrisonburg and Rockingham County... and 15 of the homes are now under contract. If your home is listed for sale and 30 (or more) days have passed without an offer, you may also be considering adjusting the price... and that new price may attract enough additional buyer interest to generate an offer for you to consider. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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