Subscribe!Welcome! This blog tracks the real estate market in the Central Shenandoah Valley, featuring market data and analysis, an exploration of common buying and selling questions, and candid commentary on all things real estate.
If you are interested in discussing any of the topics on this blog, or the details of your specific real estate situation, call or e-mail me!
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20% down required on investment properties? |
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I have now heard from several lenders that they cannot lend more than 80% on investment properties. The main issue seems to be that mortgage insurance companies are not willing to issue policies on investment properties any longer. (Most loans with less than a 20% down payment require mortgage insurance.) | |
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Yes, mortgages are still available |
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In talking to people in Harrisonburg and around the state lately, I have heard several people comment about how it is now near impossible to obtain a mortgage to buy a home. This has not been my experience --- I am still seeing most (reasonably qualified) buyers having no problem obtaining a mortgage. A few caveats:
If you are considering buying, don't be scared off by a concern that mortgages are not available. In fact --- in addition to mortgages being available, 30-year fixed rates are very low right now! | |
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September 2008 Harrisonburg & Rockingham County Real Estate Market Update |
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The September 2008 Harrisonburg & Rockingham County Real Estate Market Report is now available. Click here for a printable PDF of this report.  When comparing September 2008 to September 2007, both median and average sales prices show declines, of 3.85%, and 4.96% respectively. However, when comparing Jan-Sept 2008 to Jan-Sept 2008, the median sales price still shows an increase of 1.03%.  Each year for the past six years, September sales have been slower than in August, and 2008 was no different. However, September 2008 sales were stronger than September 2007, which, combined with the typical increase in October sales, make this a good trend to watch.  This graph shows a normalized trend of home sales by charting the ongoing sum of the preceding 12 months' sales. Pay close attention this trend next month, as the September 2008 sales trend figure (Oct 1 ‘07 - Sept 30 ‘08) shows an increase in sales.  For quite some time, we have seen an elevated level of inventory -- thus, it is healthy to see a decrease in inventory levels. Yet, we may also be observing a seasonal trend in inventory that we will see continue through the winter.  Inventory has declined since August, and likewise, the number of months of housing that is on the market has also declined. The sub-$200k supply has remained stable for several months, but the price range with the most extreme over-supply ($400k+) has declined. | |
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What is Smart Growth? |
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From Wikipedia: "Smart growth is an urban planning and transportation theory that concentrates growth in the center of a city to avoid urban sprawl; and advocates compact, transit-oriented, walkable, bicycle-friendly land use, including neighborhood schools, complete streets, mixed-use development with a range of housing choices. Smart growth values long-range, regional considerations of sustainability over a short-term focus. Its goals are to achieve a unique sense of community and place; expand the range of transportation, employment, and housing choices; equitably distribute the costs and benefits of development; preserve and enhance natural and cultural resources; and promote public health." To summarize, Smart Growth is building in the right place:
Additional Smart Growth resources:
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23 Guiding Values for the Revitalization of Downtown Harrisonburg |
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Below are 23 concepts for current (or future) property owners in downtown Harrisonburg to consider as they restore or revitalize downtown properties.  These values are from the vision book entitled "urban values & vision for downtown harrisonburg" produced by Eugene Stoltzfus Architects for the City of Harrisonburg Downtown Renaissance.
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Visualizing Trends in Harrisonburg and Rockingham County Real Estate Sales Activity |
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If you haven't figured it out yet, I thoroughly enjoy data analysis and creating graphs to visually communicate market trends. I frequently post a colorful historical trend graph showing month-by-month comparisons of sales activity for the past several years. But it's hard to understand the overall market via this graph. Thus, I created the graph below....  Click the graph (or here) for a printable PDF. This graph shows the overall trend in the number of real estate sales taking place in Harrisonburg and Rockingham County (per the HRAR MLS). Each data point is showing the sum total closings for the preceding 12 months. For example, the January 2004 value of 1,324 closings indicates that 1,324 closings took place between January 1, 2003 and December 31, 2003. This graph, therefore, can show us some big picture trends --- if we didn't already know or suspect what they are. Two notes from the statistician: 1. Since this graph is summing up 12 months of data for each data point, when activity starts picking up again, it may be many months before it reveals itself in this graph. 2. This graph is showing total sales activity (number of sales), and is not a reflection of changes in the market value of homes. | |
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What if you could buy a house for $100.00!? |
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 In some real estate markets, home owners are turning to a raffle to try to sell their home. (Thanks to Josh for the tip!)For example, Angela Schaab in Grand Rapids, Michigan is attempting to sell her boardwalk condo by selling 2,500 $100 raffle tickets. As of today (9/27/2008) she has sold 235 tickets. Or, read the story of several owners attempting raffles in the Wall Street Journal's Raffles: Real Estate's Latest Game of Chance. So --- what do you think? If there were a house on the market in Harrisonburg, and you could buy a raffle ticket for $100 --- would you buy one? | |
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Breaking Economic News: Rosetta Stone to go public? |
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 Rosetta Stone Inc., one of several prominent Harrisonburg-based technology companies, filed to raise up to $115 million in an initial public offering on Tuesday (9/23/2008).Of note from the MarketWatch report: "Rosetta Stone rang up net income of $2.9 million on revenue of $83 million in the six months ended June 30, compared to net income of $399,000 on revenue of $59.5 million in the year-ago period." Wow --- what an improvement in net income! This is likely to be great news for our local economy! Read more details/commentary at hburgnews.com. | |
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Three small, but significant words . . . "on or about" |
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 The "Settlement" section of a standard Virginia real estate contract reads....Settlement shall be made at the office of the Purchaser's settlement agent on or about October 1, 2008. Did you catch the three small words so innocently wedged between the location and date of the closing? The meaning of those three words (on or about) is often overlooked! Some sellers think, or assume that the date filled into the contract will be the actual closing date. It very well might be --- but oftentimes a buyer or seller's circumstances will shift it a few days in either direction. So, the first thing to remember is that it is usually just a close estimate of when the closing will occur. But what happens if (in the above example) a buyer informs the seller that they won't actually close until October 22nd --- three weeks later. May the seller indignantly demand that the buyer close on October 1st, OR ELSE? Contractually, no! "On or about" is typically understood to mean plus/minus 30-60 days, depending on the attorney. That certainly allows for some flexibility, and this is the second thing to remember --- the standard contract language will not allow you to precisely plan the day or week of closing. So, what is a seller to do? BAD: If you need to close on a precise date, or no later than a particular date, you'll want to add "time is of the essence" to the standard contract language. With such language, if the settlement does not take place by the date in the contract, the contract automatically becomes null and void. Of note -- I rarely suggest using "time is of the essence". Having the contract "die" after a certain date usually doesn't help either the buyer or the seller. If the buyer wants to buy, and the seller wants to sell, and the final closing documents are one date late, should the deal really automatically die?? BETTER: A better option is to introduce a (positive or negative) financial incentive for the buyer to close in a timely fashion. Perhaps a positive financial incentive for closing on (or before) the scheduled closing date. Or, an increased purchase price or other penalty if the closing is more than X days later than scheduled. BEST: Leave well enough alone --- don't change the standard contract language. Understand the above, but be flexible and willing to adjust, within reason to make the closing process smooth and successful. I hope this is clear --- feel free to leave a comment below, or call/e-mail me for further clarification. | |
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Envision the Future of Downtown Harrisonburg! |
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Come discover the potential of downtown Harrisonburg TONIGHT (9/25/08), at 6:30 p.m. in the City Council chambers where Eugene Stolzfus Architects will be presenting exciting opportunities and possibilities for our historic downtown through a visionary look toward our future. I hope to see you there! Get a preview: http://hburgnews.com/2008/09/24/vision-for-downtown/  This image is from a fascinating book compiled by Eugene Stolzfus Architects. (25 MB) | |
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New Urban Exchange renderings available! |
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Signs of a slightly healthier market? |
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Enjoy another perspective on home sales of late --- this analysis mainly focuses on this year to date (Jan-Aug) as compared to the same time period (Jan-Aug) for the seven years. See below the chart for a few observations.  The number of sales is down -- no surprise. Median prices are up --- no surprise. Surprise -- more homes are going under contract than are coming on the market. This is a new trend, as the oversupply of recent months has been created because significantly more homes were coming on the market than were coming off the market. In August 2008, 145 new listings came on the market, and 152 properties went under contract. Click on the chart for a printable PDF. | |
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What is market value? |
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I received a call the other day from a Realtor who was representing the seller of a house that I had showed to some of my buyer clients. I was informed that "the owner just had the house appraised, and the appraisal came in $20,000 above the asking price." I believe the conclusion that I was supposed to come to was that the house was a great deal, even at the asking price.
Certainly, this is a bit ambiguous, but my main point is that we can't make any assumptions about what the market value is of a house. | |
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"Time To Get Control Of Area Development" |
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Today's Dailly News Record (09-19-2008) has a very interesting editorial from Jonathan Kiser, a Harrisonburg resident that begins as follows... "LIVING IN HARRISONBURG and Rockingham County during the past decade I, like many others, have observed an unhealthy trend. Rapid growth has occurred without any apparent consideration for area history, heritage or natural beauty." I don't necessarily agree with everything Jonathan says, for example,"Hide all big box developments with a green buffer that will also help to off-set their carbon footprint;" This seems unlikely given the visibility that big box developments covet. But Jonathan provides lots of:
Definitely worth a read...click here! | |
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Things To Do in Harrisonburg and Rockingham County |
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Are you new to the area, and trying to find out about local activities and events in Harrisonburg and Rockingham County? Here are some online resources to get you started, each of which has an events calendar of sorts....
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Mortgage rates are down --- if you're buying, lock in now! |
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If you have been holding off to lock in an interest rate on your purchase or re-finance, now may be the time! In a report released by Freddie Mac last Friday (9/12/2008), 30-year fixed-rate mortgages now average at 5.93%. That is a significant drop from the prior week's average of 6.35%. Yes, rates could go lower, but we're below 6% again --- which I hadn't thought we'd see for quite a while. If you have any questions, please e-mail me (scott@cbfunkhouser.com) or call me (540-578-0102). I'd be happy to talk things through with you, or to connect you with a qualified lender. | |
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August 2008 Real Estate Market Report for Harrisonburg & Rockingham County |
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Click on any of the charts or graphs below for a printable PDF of the August 2008 Real Estate Market Report for Harrisonburg & Rockingham County. Perhaps of most interest is that buyers are committing to buy properties at an almost equivalent rate as they were last year. Last August, 77 properties went under contract, and this August 76 properties went under contract. This seems to indicate that either we will see closed transactions pick up as the year continues, or that fewer buyers are able to get from contract to closing on a property.  We are in a buyers market. In many markets around the country, which are also in buyers markets, prices have declined significantly over the past 18-24 months. However, we continue to see average and median sales prices staying relatively level. Both average and median sales prices increased (by less than 1%) when comparing Jan-Aug 2007 to Jan-Aug 2008.  Home sales continue to be largely seasonably predictable. Sales increased in August (as compared to July) as they have in most previous years. September, October and November will be interesting months to observe, as last year October and November showed a modest increase in sales activity.  Housing supply is holding steady, or increasing slightly in all price ranges. The lowest price range ($0-$200k) continues to have the healthiest relationship between buyers and sellers, with the most expensive price range being the most out of balance. If you are interested in a more specific analysis of a particular segment of the Harrisonburg or Rockingham County real estate market, please call (540-578-0102) or e-mail me. | |
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"It would be great if more properties on the market..." |
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"It would be great if more properties on the market..." Isn't that an interesting thought?  I couldn't agree more! Several of my current buyer clients are pre-approved and ready to buy, but they can't find a house that suits their needs. They would love to see more houses for sale to give them more options from which to find their new home. I couldn't agree less! For months, most price ranges have been significantly over-supplied. Adding more houses to the already healthy supply levels would just further exacerbate the situation. Hmmmm........ | |
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Is Harrisonburg turning into Northern Virginia? |
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A letter to the editor in the Daily News Record this week suggests that we are. I concede that Harrisonburg and Rockingham County need to continue to focus on their infrastructure to support any growth that does occur. But...to suggest that we're turning into Northern Virginia?? That seems to be a bit of a stretch to me --- here are two Google Map views to help you make up your mind. Harrisonburg, Virginia . . . Vienna, Virginia . . . Of note --- almost all of Harrisonburg is viewable within the map above, however you can zoom out of the Vienna map and move it all around, and you will continue to see dense development for miles around. Despite the growth in Harrisonburg and Rockingham County, it still seems to me to be a bit different from Northern Virginia. What about to you? | |
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No interior photos? No need to visit that house! |
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 No interior photos? No need to visit that house! Some sellers find it absurd that a buyer would have this mentality as they decide which homes to visit --- they assume that if a buyer is serious, they'll come see the house for themselves even if there aren't any (or very many) interior photos. But buyers are smart, and make reasonable generalizations: most homes without interior photos are hiding something. Perhaps it is the awful condition of the home, or the hideous decor, or the tiny rooms. In most cases where only one photo exists for a house for sale, there is something that the seller doesn't want to have highlighted for the world to see. And thus, as busy buyers pare down their list of homes to view, they will often assume the worst of houses that do not have interior photos. Sellers -- you don't need to go overboard with how many interior photos are posted to the MLS or other web sites, but do include some interior photos so that prospective buyers can have at least some idea of what to expect. | |
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Scott Rogers
Coldwell Banker
Funkhouser Realtors
540-578-0102
scott@cbfunkhouser.com
Licensed in the
Commonwealth of Virginia
Scott, I wrote briefly on this the other day (link). Suntrust Bank is not quoting many changes on their investment loans right now - you might want to contact Dennis Duncan (Dennis.Duncan@suntrust.com), tell him you got his name from me, and see what he could do for your clients.
Good luck - I truly believe this is a good time for investors who want to get in and stay in the market. With money down and solid scores, there are some DEflated values to be had.
October 10, 2008 10:44 am
Thanks Jeremy! I haven't checked around extensively yet, but I am hopeful that > 80% LTV may still be possible on investment properties.
October 11, 2008 8:00 pm
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