Inventory levels are so low right now –– it must be hard for a home buyer, because they have so few choices, right? Not exactly...

1,213 homes sold in the first ten months of last year

1,384 homes sold in the first ten months of this year

So, buyers have actually had MORE options this year than last.

But... those options of what to buy have come on the market and often/usually gone under contract VERY quickly... thus, keeping inventory levels at any given time quite low!

As such, the flow of home buying decisions looks quite different now as compared to –– for example –– three years ago.

Once you decided to buy a home you might have ten or so houses you could go see that would generally fit your home buying criteria.  You could compare and contrast each of them, prioritize them, decide which one you might want to buy, make an offer, and if it didn't work out, pursue one of the other houses.

Once you decide to buy a home you likely won't find any houses on the market that will work for you.  We'll wait for a new listing to hit the market, go see it within a day or two and you'll need to make a decision very quickly about whether you want to make an offer on the house.  If not, someone else will buy it, and we'll be waiting on the next new listing of interest to hit the market, and we'll repeat the process again.

Before, you could view 10 houses and compare them and pick your favorite and pursue that house.

Now, you can consider 10 houses, but you only get to consider them one at a time... and if you don't decide to buy house #2 because you didn't realize how unexciting houses #3 through #10 were going to be, you can't go back and buy house #2 because it will already be under contract.

So, you are likely to have just as many options to buy houses right now –– but the flow of decision making is much different than it used to be!

 

Another month –– lots more contracts.

120 buyers (and sellers) signed contracts to buy (and sell) homes in Harrisonburg and Rockingham County during November 2021.  One might have thought it would have been a slow month for contracts, but not so.  This puts it in the 120–139 range, along with January, June, July and September.

In the past year, the two slowest months for contracts being signed were December and February.

Perhaps this December will follow suit and also will be slow –– or maybe it will be another unexpectedly strong month of contract activity.

 

In this competitive real estate market –– when buyers are often finding themselves competing with multiple other buyers for their perfect home –– some buyers find themselves considering whether to make an offer without a home inspection contingency.

Certainly, an offer without a home inspection contingency is likely to be seen by the seller as a stronger than an identical offer with an inspection contingency.

Of late, I have seen some buyers (or their agents) trying to find space between having a home inspection contingency and not having one.

Here are three modifications of home inspection contingencies I have seen lately that don't seem to be all that helpful...

Inspection For Informational Purposes Only – This is usually accompanied by language that allows a buyer to terminate the contract if they do not like what they find during the home inspection, so this modification really just seems to be a promise to terminate the contract instead of asking for repairs if there are issues.  This often isn't seen as much stronger than an offer with a regular old home inspection contingency.

If There Are Issues, Buyer Will Request Repairs, Not Terminate – Again, I think this is often intended to try to make the seller feel better about the inspection contingency.  The buyer is promising not to just give up and walk away –– they will at least request repairs and try to work things out.  But, this one is also pretty subjective –– those repairs that are requested (instead of terminating the contract) can be requested in a manner that would make it almost impossible to come to an mutually acceptable resolution –– essentially working a buyer back towards being able to get out of the contract, technically by having required repairs instead of having terminated the contract.

I have nothing against a buyer (or buyer's agent) trying to soften the impact of a home inspection contingency –– but most sellers look at things in a bit more of a black and white perspective –– is there an inspection contingency or not?

So... instead of spending lots of time and energy trying to fine tune the language of a cleverly crafted modification of an inspection contingency... focus on deciding whether you want the opportunity to reconsider whether you will purchase the property after having gathered additional information during a home inspection.  If you do want the chance to reconsider the purchase, then you're going to have an inspection contingency – and regardless of what additional language you add in to try to soften the impact of that contingency – a seller is almost certainly going to see it as being less favorable than an offer without an inspection contingency.

 

A few updates today on proposed residential communities in Harrisonburg and Rockingham County...

Harrisonburg's City Council approved the development of a six story apartment complex on Peach Grove Avenue.  The prior approval allowed for one level of commercial space which was converted to more apartments in the updated approval.  This development is now planned to be a 460 bedroom apartment on 5.44 acres.

The Rockingham County Board of Supervisors tabled a request for a rezoning that would have allowed for 95 townhouses at Massanutten Resort.

The intended developer of a proposed 155 home neighborhood in McGaheysville withdrew their request for a rezoning to allow for the development.

The Rockingham County Board of Supervisors approved a rezoning request to allow for an additional apartment building at the Altitude apartment complex.

 

Everybody wants to buy a rental property. 

OK, well, not everybody... but seemingly, lots of people do!

Two quads (four unit apartment buildings) in the vicinity of Eastern Mennonite University recently came on the market for $450K each.  Both were under contract within a week with multiple offers, some with escalation clauses.

One such recent multi–family listing had nine offers... the second had ten offers!

So, yes, there seem to be plenty of investors seeking out income generating properties in the Harrisonburg area.

Let me know if you are interested in considering the purchase of a rental property in the Harrisonburg area.  As should be evident, you'll have LOTS of competition, but I'm happy to help you explore the opportunities if you are interested.

 

   view larger photo here

Have you driven by The Townes at Congers Creek lately?  These newly built townhouses are located on Boyers Road just minutes from Sentara RMH Medical Center.  (full disclosure – I represent the builder)

The first phase of The Townes at Congers Creek is complete, with 26 townhomes plus a common area including a pavilion, patio, fire pit and basketball hoop.

Construction is now beginning on townhomes in the second phase, and the first 20 townhomes are already under contract.

Here's a view of the current site work under way on the second phase...

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Learn more about this exciting townhouse community by viewing current availability, walking through the model home, viewing the standard features and upgrades.

If you have questions, or if you'd like to schedule a time to view the model home in person, call/text me at 540–578–0102 or email me.

 

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If you have drive by the Exxon at the corner of Stone Spring Road and Spotswood Trail lately you have likely seen the building under construction next door.

That building will be... an Urgent Care Center.

In the site plan submitted to the County it was called Preston Lake Urgent Care Center...

...though per the County tax records, the property is owned by MPB INC out of Norfolk, which seems to be a branch of Sentara.

I'm sure more details will come to light as construction wraps up in the coming months.

 

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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.

   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...

   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...

 

   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.

 

Sometimes home buyers don't ever find that perfect house.

Sometimes home buyers search for months and months (or years and years) before they find the absolutely perfect house.

Sometimes the absolutely perfect house is the very first one you walk through.

When you do find the absolutely perfect house do not hesitate to move quickly, confidently and boldly to make that house your home.

I have now had three buyers clients this year that found their absolutely perfect house as the very first house we walked through.

We just started looking –– how could we have found the absolutely perfect house first?  Shouldn't I spend a few days, weeks or months looking at lots of houses to make sure this is the perfect house?

My advice to you –– when you find that perfect house, whether on Day 1 or Day 30 or Day 365, be ready to pounce on it.

Your absolutely perfect house may very well not come along again anytime soon!

 

Happy, Chilly November morning, Friends!

This month's market report is brought to you by... turkey, stuffing, cranberry sauce, sweet potato casserole, carrot souffle, corn casserole, mashed potatoes and gravy...

Thanksgiving is my favorite meal of the year because of all of the delicious foods offered all at once.  This year, my family humored me... and spoiled me... by making me a full Thanksgiving meal for my birthday at the end of October!  :–)  So, for everyone who hasn't had a full Thanksgiving meal for 11.5 months now, I can tell you from personal, recent, experience, you're in for a treat... nine days and counting!  ;–) 

Speaking of Thanksgiving, there is much in my life for which I am immensely grateful –– my family, friends, health, a job I enjoy, my clients, and much more –– and I hope you are finding much in your life for which you are also thankful this year.  I also hope you are able to spend some time this Thanksgiving with family and friends and enjoy a bit of downtime amidst what has been a hectic and stressful year for many.

But, enough talking turkey, back to the main course –– the local housing market.  ;–)  The photo on the cover of my market report is a lovely, updated house on Garbers Church Road, which you can check out here, and you can download a PDF of all of the charts and graphs from my market report here.

Now, let's start stuffing our faces with some of the latest stats...

OK, quite a few highlighted items here...

[1]  We have seen 1,384 home sales thus far in 2021 which is almost 14% more than we saw last year during the same timeframe.  The market continues to be red hot with lots of homes selling –– more than any recent year!

[2]  The median sales price has risen 11.25% in the past year.  One year ago, the median sales price (for 2020) was $242,000.  Now, that median sales price is $269,225.  That is an increase of more than $25,000 in a single year!

[3]  The time it takes for homes to sell has been cut in half in the past year.  A year ago the median days on market was 10 days, and this year it is only five days.  That is to say that half of homes are going under contract in five or fewer days!

Let's break it down, now, between detached homes and attached homes.  Attached homes are duplexes, townhomes and condos...

The green charts, above, are detached homes and the orange charts are attached homes, and here's what I'm noticing...

[1]  We have seen 10% more detached home sales this year –– an increase from 846 sales up to 933 sales.

[2]  The median sales price of these detached homes has risen 9.5%, from $264,900 up to $290,000.  We are now pretty close to a $300,000 median sales price for detached homes in our area.  Wow!

[3]  We have seen even more of an increase in the pace of sales of attached homes, with a 22% increase in those sales from 369 sales last year to 451 sales this year.

[4]  The median sales price of attached homes has risen even more than detached homes, with a 17% increase from $192,900 up to $225,000. 

So, many more sales this year than last, and higher prices!  It's been a busy year for buyers and sellers in the local housing market.  Breaking it down month by month, here's what we're finding...

It's been a bit of a roller coaster ride in the second half of this year...

JUN: highest month of sales in many years

JUL: slower sales than last year

AUG: highest month of sales, by far, in many years

SEP: slower sales than last year

But, the market is back in full force in October, with the... highest month of sales in many years.  :–)

We are likely to see a slow decline in monthly home sales in November and December as is typical most years –– but then again, maybe I'll be surprised yet again!

If we do stay on track with a relatively solid November and December, here's what that might look like...

As you can see, with only ten months of sales thus far in 2021 we have already eclipsed the total number of sales in 2017, 2018 and 2019.  We may very well rise above 2020 just with the addition of November sales, and when 2021 is completely in the books, perhaps we'll get all the way up to 1,600 home sales! 

Here's an another visualization of how we made our way to this pace of home sales...

Yeah, that orange line.  The orange line is showing the annual pace of home sales in Harrisonburg and Rockingham County.  The annual pace of sales slowed in mid 2020 due to Covid –– that's the multi month dip on the left side of the graph.  But when Fall 2020 came into view, the pace of buying activity took off like a rocket and has not slowed down much since.  The annualized pace of home sales has actually been over 1,600 for five months in a row now, which is a relatively good indicator that we'll see a total of 1,600 home sales in 2021. 

Will the pace of home buying activity slow in 2022?  I don't think that it will.  I believe there is a good bit of unmet buyer demand that has built up in our local market over the past five years.  I think there are plenty of would be home buyers that are just waiting on resale homes, or newly constructed homes, to be available so that they can buy a home.  Assuming we continue to see growth in new construction options, and assuming mortgage interest rates don't rise dramatically, I think we are likely to continue to see an annualized pace of 1,600+ home sales as we work our way into and through 2022.

And what about home prices...

Between 2011 and 2019 the average increase in the median sales price of detached homes was 3.4% per year.  Over the past two years (2020, 2021) the average annual increase in the median sales price of detached homes was... 10%.

So, clearly, home values are increasing much faster now than they were for most of the past decade.  Looking ahead, what will we see next.  I believe we will soon (2022) or eventually (2023) see that annual increase return to that longer term norm of three to four percent.  I am not thinking, at this point, that we will see sales prices drop –– but I don't think we will continue to see those prices increase as fast as they have for the past two years.

Looking ahead at what closed sales might be in the next two months requires looking backwards at what we've seen in the way of contract activity over the past few months...

As noted by the red and green arrows above the last five months above...

[1]  In June, July, August and September of 2021 we saw fewer contracts being signed than in the same month in 2022.

[2]  In October 2021 we saw more contracts being signed than in October 2021.

[3]  In the total of those five months there were 762 contracts in 2020 and only 688 contracts in 2021. 

So, contract activity might be (?) slowing a bit, which means home sales activity might (?) slow a bit as we finish out 2021 and roll into 2022.  Stay tuned as I continue to track this over time.

Here's a bit of a confusing graph, at first glance...

This graph, above, shows the number of homes on the market at any given time, measured monthly.

Inventory levels have been dropping for many years now –– but home sales have been increasing during that same timeframe.  Confusing, right?

Here's the skinny...

[1]  More homes have been listed over the past year than the previous year.

[2]  Homes have sold much more quickly this year than last.

[3]  As a result, the number of homes on the market at any given time has dropped over the past year.

Maybe that's clear, maybe not.  As with all of this data and these graphs, just ask if you have a question!

As per #2 above, homes are selling rather quickly...

A few things we can pick up from the graph above...

[1]  As scribbled on the chart, four out of five homes are going under contract within 30 days.

[2]  Narrowing the focus a bit, we can note at the bottom that per the median of five days, at least half of the homes that have sold in the past year have been under contract within five days of being listed for sale.

Here's an even more interesting visualization of how quickly homes are going under contract in Harrisonburg and Rockingham County these days...

This graph takes a look at the median days on market of all residential sales in Harrisonburg and Rockingham County in a year's time.  This shows the speed of home sales in our marketplace and that speed has been steadily increasing over the past 18+ months. 

Alright, that brings my monthly overview of our local real estate market to a close for now.  As noted throughout... more homes are selling, more quickly, at ever higher prices.  It is not clear when these trends will slow down, stop or reverse themselves, but for now, the local market keeps on moving steadily ahead.

If you made it through reading the entire overview of my market report, kudos to you, and you can consider yourself to be well informed on the latest local market trends.  You are now dismissed from class to go daydream about your favorite foods you will devour on Thanksgiving day.

As we continue through November, I hope your Thanksgiving season is one full of plenty of relaxation, delicious food, and enjoyable time with family and friends. 

Looking ahead, if you hope to buy a home or sell a home yet this year, or in early 2022, let's chat sooner rather than later to prepare you for entering into this fast pace local housing market.

You can reach me via phone/text at 540–578–0102 or by email here.

Happy Thanksgiving!  :–)

 

I'll make more detailed predictions about the 2022 local housing market towards the end of December of the beginning of January –– but for now, I'll mention the following related to the Harrisonburg and Rockingham County real estate market...

Facts:

2020 = 10% increase in the median sales price

2021 = 10% increase in the median sales price (thus far)

Predictions:

I don't think we'll see a 10% increase in the median sales price between 2021 and 2022.

I don't think we'll see a decline in the median sales price.

I think we are likely to see a 3% – 5% increase in the median sales price in 2022.

Again, I'll look deeper into the data and make some further predictions as we get closer to the year wrapping up, but what do you think?  What are your predictions?

I can't even count how many times over the past five–ish years that I have said mortgage interest rates would certainly be rising again, soon, for sure.

I have certainly been thinking that over the past few months, but... maybe they're not!?

Consider these data points for the average 30 year fixed mortgage rate...

One Year Ago = 2.84%

April 2021 = 3.18%  (a peak)

August 2021 = 2.77%  (a valley)

October 28 = 3.14%  (apparently, a peak)

Today = 2.98%

This is all show in the graph above, as well.

After interest rates rather steadily rose between August and October, it seemed almost certain that they would continue to rise, staying above 3% for perhaps the indefinite future.

But, then, for the past two weeks, mortgage interest rates have declined, now landing below 3%, again.

So, yeah, mortgage interest rates are definitely going to go up now, soon, for sure.  Just like I have been saying, inaccurately, for years now...

 

Plenty of homeowners are *delighted* to see the price for which they could likely sell their home in this fast moving local housing market.  :–)

Most of those homeowners are then at least slightly *dismayed* when they see what they'd have to pay to buy their next home.  :–/

As such, I have suggested to plenty of homeowners lately that they consider staying in their home – and improving it – rather than selling their home and buying a new one.

But... that advice is easier to give and receive than it is to implement.

Over the past three to six months in conversations with homeowners contemplating staying in their homes –– and making improvements to them –– I have heard over and over again that they are having an extremely difficult time lining up contractors (or other professionals) to do the work they'd like to have done on their house.

What then is a homeowner to do?

1.  Get in line and patiently wait for the contractors (and the applicable materials) to be available to accomplish your home renovations.

2.  Just go ahead and sell your home and buy a new one.

There is no easy answer to this conundrum, but I have realized more and more in recent months that suggesting that a homeowner "just stay in their home and renovate it instead of selling it and buying again" might not be the right solution for all homeowners.

If you are weighing your options of renovating or selling and buying, let me know if you'd like to think it through and talk it through together.

 

Several local agents have recently said, conversationally, that they think the local housing market is starting to cool off.

Is it?

Maybe yes and no, depending on what you mean, and how you measure it?  ;–)

No – After only seeing 148 home sales in September 2021, there were even more (158) in October 2021!

No – After seeing only 125 contracts signed in September 2021, there were 156 contracts signed in October 2021!

Yes – It took a median of five days for homes to go under contract in September 2021 and a median of six days in October 2021.  Slower.  Much slower.  By a day.  Gasp!

Maybe – Six to twelve months ago it was not uncommon to have 2, 5 or 10 offers on a house within 48 hours of the property hitting the market.  Now, I'm often, but not always, seeing fewer offers within the first few days.  This is definitely anecdotal, not based on data.

So, is the market cooling? 

Oh, I see that house down the street is for sale!  What's the list price? 

They are asking $400,000 for the house.

What is the tax assessment of the property?

Why?

–––

If you want to know the tax assessed value of the house to understand how much an owner of the property pays in real estate taxes – great!  Let's go take a look at the tax assessment.

–––

If you want to know the tax assessed value of the house to evaluate whether the seller's asking price for their home is reasonable –– you likely aren't looking in the right places for indicators of market value.

–––

Tax assessed values are actually intended to be a good indicator of market value, as the City and County want to be taxing you on the basis of the actual market value of your property... but... oftentimes, the tax assessed value of properties in this area range from low to very low.

Part of that is due to timing.  Today's tax assessed values may be based on sales data from 12 to 18 to 24 months ago due to the time intensive process of analyzing property values and updating tax assessed values.

The median sales price is currently increasing quickly, at a rate of 10% to 12% per year.  Thus, when market values are quickly increasing and tax assessed values are based on 12 to 24 month old data, you are likely to see a more significant difference between tax assessments and market values.

So, it's fine to look at the tax assessment of a property, but I wouldn't put too much confidence in thinking that it is an indicator of the present market value of the property.

 

What are the top three factors affecting home value?

Or so the saying goes.

But, really, the location of a property is key in understanding its value.

A home with 1500 SF in one neighborhood in Harrisonburg will not necessarily sell for the same price as a home with 1500 SF in another neighborhood on the other side of town. 

A townhome built 20 years ago in one neighborhood will not necessarily sell for the same price as a townhome in another neighborhood that was built 20 years ago.

As such...

Don't be too hasty in drawing conclusions about the value of a house based on the sales price of houses in a completely different location or neighborhood.

It is usually best to seek to understand the value of a home by first examining recent sales in the same neighborhood or location of the home in question.

 

• price?
• time?
• convenience?

When your home is on the market, you're always optimizing for something.  Be sure you know what you are optimizing for and make sure that is your intention!