There are many more home buyers in our market who can buy a $300K home than there are that can buy a $500K or home or a $800K home.

But... we can't over generalize and assume that there will be tons of buyers for every $300K home, many buyers for every $500K home and just a few buyers for every $800K home.

After all, all homes are not appealing to an equal number of home buyers.

Some homes are broadly appealing to many buyers, independent of their price, perhaps because of their floor plan, features and finishes.

Some homes are quite narrowly appealing to just a few buyers, independent of their price, perhaps because of their floor plan, features and finishes.

Before we list your home for sale... and before we finalize a pricing strategy for your home... we'll need to evaluate how broadly appealing we believe your home will be to buyers in the current market.

 

Every new listing isn't having multiple offers these days... but plenty of new listings are getting lots of attention... and some are having multiple offers.

As a result, some buyers are still having a difficult time securing a contract to buy a home.

If you are such a home buyers... who has been searching for a home for months and months... or who has unsuccessfully made offers on home after home...

Will you become more or less picky as time goes on?

Some buyers will get more and more flexible with their home search criteria as the months go on, as they just... want... to... finally... purchase... a... home.

Some buyers will get more and more picky as their home search continues... figuring that if they've waited this long to find a home, they might as well wait a bit longer to find a home that is a great fit for their needs.

If you are hoping to buy in a popular price range or location or property type such that you have lots of competition from other buyers... will you become more or less picky as time goes on?

 

Brand new townhomes are being built at Congers Creek, located on Boyers Road, just minutes from the Sentara RMH Medical Center –– but only six townhomes remain for sale in Phase Two!

If you are hoping to buy a townhome in Congers Creek and move in this calendar year, there are likely only six more townhouses that will be complete within that timeframe.  Phase Three of Congers Creek will be announced soon, but completion dates will likely be in early 2025.

Check out available homes at Congers Creek here and let me know if you'd like a tour of the model home.

  

At first glance, homes are going under contract just as quickly this year as last year, as shown by looking the first six months of each of those years...

First Half of 2023 Median Days On Market = 6 Days

First Half of 2024 Median Days On Market = 7 Days

But...

First Half of 2023 = 157 of 610 (26%)

First Half of 2024 = 209 of 658 (32%)

First Half of 2023 = 67 of 610 (11%)

First Half of 2024 = 85 of 610 (14%)

So... yes, the median days on market statistic is remaining relatively unchanged, but there are certainly more homes this year than last that are taking a big longer to go under contract than sellers might have otherwise thought or hoped.

The green bars above show years when the number of home sales (per year) increased compared to the prior year.

The red bars above show years when the number of home sales (per year) declined compared to the prior year.

The past two years (2023, 2022) showed declines compared to the previous year –– but we seem likely to see an increase in 2024.

Home Sales In The First Six Months of 2023 = 610

Home Sales In The First Six Months of 2024 = 658

Perhaps we'll be able to add another green bar to the chart above for 2024, showing an increasing number of annual home sales, yet again.

 

How early should you put your home on the market?  Maybe three or four months before you want to move out?  Maybe not.

Most home buyers these days want to be able to close on their home purchase within about 30 to 45 days of signing a contract – and they would like to have possession of the house at closing.

As we talk about the timing of when we will list your home for sale we can work things forwards or backwards...

Forwards...

July 15 – list home for sale

July 22 – home under contract (maybe, though could be later)

August 31 – buyer wants to close and move in

July 15 – list home for sale

August 1 – home under contract (slower than expected)

September 15 – buyer wants to close and move in

Does it work to move out of your home by August 15 or September 15?  If so, great.  If not, maybe let's work backwards.

Backwards...

October 31 – earliest date you'd like to move out

September 30 – buyer contracts and asks to close in 30–ish days

September 22 – list home for sale expecting a short time on the market

October 31 – earliest date you'd like to move out

September 15 – buyer contracts and we tell them we need 45–ish days

September 7 – list home for sale expecting a short time on the market

Certainly, there are variables for which we cannot completely control...

1.  How quickly will your home go under contract?

2.  How quickly will a buyer want to close on the home?

3.  Will a buyer be willing to let you stay in the home for a few days or weeks after closing?

We can take our best guess at the answers to these questions and then work the timeline forward or backward to identify the best date for getting your house on the market for sale.

 

Sometimes a home's description is a bit over the top, such as this AI generated description of a very small home that is trying its best to sound amazing...

"Introducing the Ultimate Oasis: a marvel of architectural genius nestled in the heart of tranquility! This exquisite residence redefines opulence in a compact form, boasting an incredibly efficient layout that maximizes every square inch to deliver an unparalleled living experience. Envision yourself in this jewel box of a home, where elegance meets innovation."

Again... most of the time we don't see listings where the description, or photographs or feature list or specs greatly outshine the house itself.

But... occasionally I do run into such a house.

For example, a house advertised as having four bedrooms... but one of them is 8' x 8' without a closet, one is 7' x 8' without a window, and you get to one tiny room by walking through the other tiny room.

Or... a house advertised as having an unfinished basement... which turns out to be a five foot tall crawlspace.

Or... a house advertised as having two full bathrooms... but it's really only full bathroom and two half bathrooms.

Usually some of these not–quite–accurate descriptions can be understood by scrutinizing the photos... but sometimes it requires visiting a house in person to discover that...

Oh, this house is not at all what I thought it was going to be!?!

This is a tough one, and many buyers feel this way these days with limited options of resale homes to consider purchasing...

You might come to the table with five "must have" criteria for your next home and another five "would like to have" criteria.

Or, maybe your list of requirements is even longer, or possibly shorter.

Regardless, just about every would be home buyer is looking for a home that will meet as many of their needs and desires as possible.

But if you can't find it all...

 

For several years (most particularly 2020–2022) homes of every size, price and in every location would just FLY off the shelves.  Ready to sell?  No problem.  There would be an abundance of buyers ready to pounce on your home within days if not hours of your house being listed for sale.

That is still the case for some price ranges, locations and for some property types –– but it is not the case for all homes.

Thus, some home sellers will still (excitedly) see their homes go under contract within a few days or a week of being listed for sale –– but some will not.

If your home is still on the market for sale, and is not yet under contract, a few weeks after being on the market –– don't despair.

There are no longer 10 would be buyers for every house at any given point that a house is listed for sale.  You might need to wait for a few weeks or – (gasp) a month or more – for a buyer to come along that would like to buy your home.

It was certainly a delightful time to be a home sellers when homes went under contract so quickly and so certainly –– but just because your house does not go under contract that quickly now does not mean that it won't sell at all.

 

Happy Thursday... and... Happy Free Slurpee Day!  ;–)

We are officially halfway through 2024!  Wow!  It has been a whirlwind of a start of the year... and a HOT start to summer.  I enjoyed seeing many of you at Red Wing Roots Music Festival earlier this summer, and I am looking forward to several upcoming trips with my family.

I recently ran in VA Momentum's Valley 4th Run (5K) and felt both accomplished and old to have been an age group winner.  Accomplished for winning my age group... and old for having moved up to the 45 – 54 age group... which is probably also why I was able to win my age group.  ;–)  But, as a client pointed out... better to feel accomplished and old... than to just feel old!

Before we get started on the latest data on our local housing market, each month I offer a giveaway for readers of my market report.  This month I'm giving away a $50 gift card to Broad Porch Coffee.  If you haven't checked out their new location on Court Square, you should.  I recommend the bread pudding... and many other items on their food and drink menu.  Click here to enter to win the gift card.

And now, let's take a look at what has been happening in our local housing market over the first half of 2024...

The chart above captures all home sales in Harrisonburg and Rockingham County as reported in the HRAR MLS.  I'm noting a few things...

[1]  Despite a 9% decrease in sales when we compare the past 12 months to the 12 months before that... there has been an 8% increase in home sales when comparing the first six months of 2024 to the first six months of 2023.  So... home sales seem to be increasing again in 2024 as compared to where things were in 2023.

[2]  We have only seen a 3% increase in the median sales price when comparing the first half of 2024 to the first half of 2023... compared to a 7% increase when we look back 12 months compared to the prior 12 months.  So... it seems that price increases may be slowing a bit.  Read that again, though, prices are still increasing... just more slowly than they had been.

But let's dig a bit deeper into a few subsets of the market, starting with detached homes...

When looking only at detached homes (which does not include duplexes, townhomes or condos) we find...

[1]  There have been 7% more home sales in the first half of 2024 compared to the first half of 2023... which is pretty similar to the 8% increase in the overall market.

[2]  The median sales price of detached homes has increased 10% in the first half of 2024 to a median sales price of $385,150.  That is to say that half of single family  homes sold in the first half of 2024 sold for $385,150 or more... and half sold for $385,150 or less.

Now, how about those attached homes...

When looking only at attached homes (duplexes, townhomes, condos) we find that...

[1]  There have been 9% more attached home sales in the first half of this year as compared to the first half of last year.

[2]  The median sales price of attached homes has risen 9% to $310,000.  Again... that means that half of attached homes (that have sold) have sold for $310K or higher, and half sold for $310K or lower.

Now what about just the City of Harrisonburg...

It has been a bit harder to find a home to buy in the City this year... with 14% fewer homes selling in the first half of the year as compared to the same timeframe last year.  At least part of this is explained by the large number of new homes being built in the County and the small number being built in the City.  Without much "for sale" housing being built in the City, the number of homes selling in the City relies almost entirely on resale homes –– current homeowners deciding to sell.

Perhaps the limited supply of homes selling in the City is why we have seen a larger (16%) increase in the median sales price of homes sold in the City thus far in 2024.

In contrast, in the County...

Perhaps due to the larger number of new homes being built in Rockingham County, we have seen a 16% increase in the number of home sales taking place in the County in the first half of this year compared to the first half of last year.

The median sales price, however, has only increased by 3% in Rockingham County compared to the 16% referenced earlier in the City of Harrisonburg.

Since I've mentioned new home sales a few times, let's take a look at what is happening there...

As shown above, we have seen a 39% increase in new home sales in the first half of this year (191) compared to the same timeframe last year (137) though this really just brings us back to the same approximate amount that we saw two years ago (198) in the first half of 2022.

Also, the median sales price of new homes has only increased 3% over the past year... from $343K–ish to $353K–ish.

And if we strip out all of the new homes, here's what we find in the resale market...

Despite an increase in the overall number of homes that are selling in Harrisonburg and Rockingham County... there has actually been a 1% decrease in the number of existing homes that are selling.  That's a small change, but it is headed in the opposite direction of our overall market.

If the smaller number of existing home sales is at all related to a decreased number of sellers being willing to sell their homes, that might explain the slightly higher increase in the median sales price of existing home sales this year (+6%) as compared to the increase in the median sales price of all homes (3%).

OK, taking a breath now... that's all of the charts and numbers.  Now let's allow some graphs to help us visual learners understand the latest trends in our local real estate market...

We saw a LOT of home sales in May 2024... 144 of them... compared to only 114 the prior May.  This left me at least partially wondering whether we would see fewer home sales this June than last June due to that particularly busy May.  But this June outperformed last June, even if not by as much as the month of May.  

These two months of stronger sales (May, June) compared to last year have contributed to the overall increase in home sales between the first half of 2023 and the first half of 2024.  Which is shown... here...

After several years (2022, 2023) of declining numbers of home sales in Harrisonburg and Rockingham County, perhaps we will see an increase in 2024.  Given the increase from 610 sales to 658 sales in the first half of 2023 and 2024, it seems likely that we will finish out 2024 with more than the 1,206 home sales seen last year.

You can also see that turnaround in the pace of home sales here...

The blue line above is tracking the number of home sales taking place in a year's time, measured each month.  As you can see, that metric has started to trend upwards again over the past six–ish months after over a year of declines.

The green line above shows the median sales price, which has been steadily increasing for years.  The median sales price is still increasing, but those increases might be slowing.  Technically, the median sales price decreased a bit over the past month, but only by $35, so we'll wait to see what happens over the next few months before jumping to any conclusions.

Here's another look at those same metrics of quantity of sales and home prices...

The green line (median sales price again) clearly seems to be going up (increasing) more slowly in 2024 than it has in previous years.  Keep in mind, though, that the rate of price increase over the past few years has been 10% –– per year –– so a smaller increase in prices would certainly be expected at some point.

The graph above also shows a few more past years history of the number of homes selling.  The 1,206 homes sold in 2023 was the smallest number in more than five years (while not pictured – it was the slowest year since 2014) but we might see more home sales in 2024 than we did in 2023.

Interestingly... when we strip out the attached homes (duplexes, townhouses, condos) we actually see a more steady increase in median sales prices...

And when we look only at the duplexes, townhomes and condos we see that slow down in price increases more clearly...

Shifting gears a bit, let's look at contract activity to take a guess at what the next few months of home sales might look like...

June marks the fourth month of stronger contract activity when comparing contracts signed this year to the same month last year –– though the contract signing frenzy cooled a bit in June.

These stronger months of contract activity likely mean we will continue to see steady increases in home sales over the next few months.

This same trend is seen when tracking pending sales...

Pending sales is a measure of how many homes are under contract, waiting to make it to settlement.  There are currently 308 such homes... as compared to only 261 a year ago.  This pending sales total in 2024 (red line) has been tracking well above where things were a year ago (blue line) since the start of the year.

Lots of buyers and sellers signing contracts sometimes leads to lower levels of homes available for sale...

The last few months of strong contract activity has been followed by steady declines in the number of homes available for sale.  Inventory levels have dropped from 185 homes for sale to 152 homes for sale over the past two months.  These inventory levels in 2024 (red line) are still higher than they were a year ago (blue line), but that might change within the next few months.

With so many homes going under contract, are they going under contract more quickly?

It seems so!  The median "days on market" has been trending back downward again over the past few months... and the past year (plus) of data suggests that we might be starting to see some seasonality in this metric once again.

In years gone by we would see homes go under contract more quickly in the spring/summer/fall than they would in the winter... though for the past few years (due to Covid, low interest rates) we saw homes go under contract rapidly regardless of the time of year.  It seems we might be headed back to a market with a bit more seasonality when it comes to how quickly buyers are contracting to buy homes.

But... I will also point out that this median days on market figure does not clearly show that there are plenty of homes that are taking longer than a week (or longer than a month) to go under contract.  All homes are not going under contract within seven days... and while most homes are... that "most" is only 51% per how a "median" calculation works.

Finally (alert, alert – last graph) mortgage interest rates have been bouncing around this year... but trending downward most recently...

Way back on the far left edge of this graph (above) you'll see that rates were below 5% in early 2022... but they have been above 6% since September 2022, and have been above 7% for six of the past 12 months.

It has been a topsy–turvy world when it comes to mortgage interest rates over the past year.  Some buyers may have purchased when rates were as high as 7.25% or 7.5%... though today's buyers are likely to be locking in below 7%. 

I am cautiously optimistic that we might get back down to the 6% – 6.5% range in 2024 or early 2025, but mortgage interest rate trends have been anything but predictable lately.

And that brings us to the end of this month's overview of our local housing market.  If you made it through all of the charts and graphs, kudos to you for educating yourself on the intricacies of our local housing market. 

If you plan to buy a home in the second half of 2024... get pre–approved for a mortgage if you haven't already and be sure to go see new listings of interest quickly once they hit the market given that many are still going under contract in a matter of days.

If you plan to sell your home in the second half of 2024... you will likely still find selling conditions to be quite favorable, with high levels of buyer interest depending on your price range, property type and the location of your home. 

If I can be of help to you as you explore the possibility of buying a home, or selling your home, feel free to reach out to chat.  You can reach me most easily by phone/text at 540–578–0102 or by email here.

I hope you enjoy the remainder of your week (high temp of only 80 degrees tomorrow!) and that you find some time to get away this summer to relax and spend time with family and friends.

 

When speaking of single family homes (not townhouses or duplexes) currently being built in Harrisonburg and Rockingham County –– most of them are not custom built homes.  There are now several regional builders in our market that are buildings many single family homes, often very quickly.

It's interesting, thus, to think about how the overall housing stock in our area will be impacted over time. 

Twenty years ago, many new homes in our area were custom built with some spec homes mixed in as well, but we didn't have large subdivisions with 50+ or 100+ homes being built out by a single builder in just a year or two or three.

I do not anticipate seeing this trend reverse itself over the coming years.

I suspect from here on out we will always see more (or many more) new homes being built by large regional or national builders than we will see custom built homes.

 

So, you are renting a home in Harrisonburg or Rockingham County now... but you hope to buy a home within the next year?

I recommend that you start looking at homes for sale about six months before the end of your lease.

Many leases require you to provide 60 days notice (or more, or less) as to whether you will renew or not renew said lease.  Thus, you shouldn't wait too long to start looking at homes you might purchase.

Furthermore, there still aren't many choices of homes to purchase in many price ranges in Harrisonburg and Rockingham County.  Thus, you will want more time to consider new listings that pop up over the course of a few weeks or a few months, rather than just choosing from homes that are available for sale at a single moment in time.  This is best accomplished by starting to look at homes several months before you need to secure a contract to purchase one.

Finally, the longer you look at homes for sale, the better context you will have for what types of houses sell for what types of prices – which will make you a more informed buyer when you are ready to make an offer on a home you hope to purchase.

So... if you're renting now, but hope to buy at the end of your lease... start looking at homes six (or so) months before that lease ends.

 

Over the past 12 months we have seen 1,251 home sales in Harrisonburg and Rockingham County as reported in the HRAR MLS.

Where have all of these home sales been located?

Let's start by taking a look at the neighborhoods where we have seen the most sales over the past 12 months.

The graph above shows the neighborhoods that have had at least 10 home sales over the past 12 months. 

The leader of the pack is Wingate Meadows where 107 homes have sold over the past 12 months –– followed by Massanutten, Cobblers Valley and Congers Creek.

The green bars above are neighborhoods where most or all sold homes were new homes –– whereas the blue bars are neighborhoods where most or all have been resale homes.

In summary...

Over the past 12 months a total of 481 home sales have taken place in these neighborhoods shown above... which is 38% of all home sales in all locations.

Of these 481 home sales in these neighborhoods...

154 were in (mostly) resale neighborhoods

327 were in (mostly) new neighborhoods

 

If a house has been on the market for a few days without an offer, a home buyer may be inclined to attempt to negotiate somewhat on price and add contingencies related to a home inspection, appraisal, etc.

All of that is fine, and can make sense.

Until another offer exists.

Once more than one offer exists, home buyers ought to go ahead and make the strongest offer that they would like to make – acknowledging that they are now not only negotiating with the seller but they are also competing with other buyers.

For example...

A home is listed for sale for $475,000.

Five days go by with plenty of showings but no offers.

A buyer offers $455,000 with an inspection and appraisal contingency.

A second buyer makes an offer – clearly, with terms unknown to the first buyer.

The first buyer does not modify their offer, or only makes a small change, not taking it all the way to the best terms they would be willing to offer for the house.

The seller moves forward with the second buyer.

The first buyer regrets not having made their strongest offer.

Yes, negotiate if you must, or if you feel that you should, but if you are competing with another buyer, don't hold back if you really do hope to buy that house!

 

Some homes certainly are staying on the market longer these days than they have been over the past few years. 

We haven't seen a noticeable shift in the "median days on market" statistic that I track on a monthly basis, but it is no longer the case that nearly all homes that are listed for sale go under contract within a week.

For example...

1.  There are (22) resale homes currently on the market with a "Harrisonburg" or "Rockingham" mailing address (ignoring towns or far flung properties) that are priced under $400K and have been on the market for at least a week.

2.  Of those (22) homes, there are (18) that have been on the market for at least two weeks.

3.  Of the (133) resales homes that have sold in that same geographic area over the past three months, only (76) had a "days on market" of a week or less, and (44) of them took longer than two weeks to go under contract.

So, when we list your home for sale, will it be "off to the races" with an offer being received (and a contract signed) within days?

Maybe –– but maybe not. 

Plenty of homes are taking longer than a week to sell –– and no, that does not necessarily mean that nobody will ever want to buy your house.  :–)

  

For much of the past five years, in many price ranges, in many locations, we were seeing multiple offers, escalation clauses, and buyers willing to remove any and all contingencies.

Home inspections were a thing of the past –– for a few years.

But now, with somewhat fewer buyers in the market to buy (given higher mortgage interest rates) we are often just seeing a single offer, or only a few, rather than 5 to 10 offers on a popular new listing.

As a result, home inspections are often taking place on transactions in Harrisonburg and Rockingham County.

Since home inspections haven't been top of mind lately (given the heated market) here are a few reminders to home sellers and buyers related to home inspections...

Sellers – Certainly, it would be ideal if the one offer you received did not have an inspection contingency, but you only have one offer, so it is probably reasonable to go along with the home inspection.

Buyers – Try to focus on major issues in the home inspection report.  It is not necessarily realistic to think a seller is going to address every minor issue identified in the inspection report.

Sellers – Your buyer is (probably) not just trying to use the inspection report and contingency to renegotiate the deal.  Assume the best about your buyer, that they are attempting to renegotiate the deal given the new information they discovered during the inspection process.

Buyers – I do not recommend asking sellers to make elective upgrades to the home.  Your home inspector might have pointed out items that would be done differently if the home was built today, but was normal at the time the house was built –– or they might point out areas where you could make improvements to improve energy efficiency, etc.  These sorts of items are not typically repairs (or upgrades) that you should request from a seller.

Sellers – If the unknown of what might be discovered during a home inspection worries you, it could be a good idea to have an inspection completed before listing your home to identify and resolve any significant issues.

Buyers – Given how difficult it can be to line up a contractor or handyman these days, consider being willing to discuss a credit with the seller instead of requiring that repairs be completed.

I suspect home inspections will continue to be (will return to being) a normal part of the home purchasing and selling process over the next few years.

 

Given that so many homeowners have fixed mortgage interest rates below 4% (or below 3%) there are plenty of homeowners who are likely to stay in their homes for MANY years to come.

Staying in a home for many years to come will likely mean that at some point you are considering some home improvement projects...

Egads!  The market is crazy right now –– would be home buyers have to include escalation clauses and they certainly couldn't include an inspection contingency or an appraisal contingency!?!

Right?

Well... yes... often... but not always.

Sometimes you might be looking at a home that has been on the market for 3, 7 or 10 days –– without an offer on it as of yet.

Should you offer full price, waive an inspection and opt out of an appraisal contingency?

Not necessarily.

As funny as it might be to say this...

If a house has been on the market for a few days and does not have any offers, go ahead and go crazy... include that inspection contingency, and the radon test contingency, and the appraisal contingency, and... wait for it... maybe even try to negotiate a bit on price!?!

Certainly, your offer might spur on another offer, and then you might be in a competitive offer situation where you are revising your offer and removing your contingencies... but you might just find success in buying a home with a few of those used–to–be–normal contingencies.

** results may vary based on property type, price range and location **  ;–)

Outdoor temperatures may have been HIGH during the first few weeks of summer... but mortgage interest rates have been falling!

Over the past years, the average 30 year fixed mortgage interest rate has been 7.01%. 

The average rate peaked last October at 7.79% and then fell relatively steadily through December... but then (mostly) climbed again all the way through May when it hit 7.22%.

Since that time we have seen a decline almost every week, and the average rate is now 6.87%. 

That is nearly a full percentage point lower than the high of 7.79% this past October.

Home buyers are certainly enjoying these lower mortgage interest rates though they hope they will continue to decline.

 

Thankfully, this doesn't happen too often, but I have had a few clients over the years who have been in this predicament.

They finally, excitedly, ratify a contract on a house that they are thrilled to purchase... and then... a few days later... a house hits the market that is even more exciting!

What is a conflicted buyer to do?

1.  Remember that you are contractually bound to buy the home that you signed a contract to buy.  There will likely be ramifications (financially and otherwise) if you do not complete the purchase.

2.  Remember that you were excited about lots of other new listings in the past, all of which you were much less excited about after you toured the houses.  Thus, even if the shiny new listing seems like a really exciting house, you might not actually like it as much as you think you will if you walked through it.

3.  Remember that in a competitive market (which we are still in, for the most part) there isn't any guarantee anyhow that you'd be able to secure a contract on that newer and possibly more interesting listing.

4.  Remember that this dynamic will always exist –– whether it's a few days later, a few months later or a few years later –– a home will inevitably come on the market that will be (or will seem to be) more exciting than the home you bought a few days ago, a few months ago or a few years ago. 

5.  Consider turning off your new listing alerts to avoid feeling conflicted?

6.  Feel free to talk all of this through with me and I can try to help talk you off of the ledge if you are suddenly less excited about the house you just contracted to buy based on a new listing that just hit the market.