Will Home Values Fall in Harrisonburg and Rockingham County?

An Associate Press story printed in the Daily News Record a few days ago....



The beginning of the article references an increase in prices in July as shown by the Case Schiller index.  So, will home values fall here in Harrisonburg and Rockingham County as is suggested in the article might happen in many markets?  Let's take a look at the support for their theory that values will fall.....

• "...the peak home-buying season is now ending after a dismal summer." Our summer wasn't necessarily dismal. Year to date we've seen as many home sales as we had in the same time period last year.  Sales are slow compared to four or five years ago, but we're no longer seeing a free fall in the number of homes selling.
• "...bracing for a bigger wave of homes sold at foreclosure or through short sales."  Thankfully, our market hasn't seen a tremendous number of foreclosures or short sales, which has kept our market relatively stable as compared to many other metro areas.
• "Add high unemployment and reluctant buyers, and the outlook in many areas is bleak."  Harrisonburg and Rockingham County continue to have low unemployment rates compared to most other metropolitan statistical areas.  We do, however, have lots of reluctant buyers!

The final conclusion in the article is that home values might fall 8% within a year.  It's important to note at this point that our market has had a much smaller decline in home values over the past several years as compared to the Case Schiller index. 

• The Case Schiller index (which, in theory, measures home values nationally) has declined approximately 28% over the past four years. 
  
• Harrisonburg and Rockingham County home values have only fallen 6% in the same time period.

So....even if the Case Schiller index falls another 8% over the next year, we're unlikely to see the same drop in the Central Shenandoah Valley.  It is more likely that we'll see a 3% to 5% adjustment.

Stay tuned!