It is a challenge!  It seems that these days over half of home purchases don't close on time, and it is often because of delays in the financing process.  Financing guidelines are much more stringent, requiring more documentation than ever before.  So how CAN you close on time?

Wells Fargo is confident that they can make it happen.  They are so confident that they're putting their money on the line in promising to close your loan on time. 

The program is called the "Wells Fargo Closing Guarantee" and states that if Wells Fargo doesn't close your loan on or before the date in your sales contract, they'll pay your first month's principal and interest!

Wells Fargo typically has great programs and rates, so this closing guarantee certainly boosts them up on my list of top lenders that I'd recommend that you speak with in determining where you'll obtain your financing.

For financing via Wells Fargo in Harrisonburg, contact Jon Ischinger at 540-478-5223 or jonathan.ischinger@wellsfargo.com.

In working with several townhome buyers over the past few months, I developed the map below outlining the main "new-ish" townhome developments in and around Harrisonburg.  There are certainly other smaller and/or older subdivisions, but this map shows the location of your main options for two and three story townhomes.  Take a look below the map for links to properties for sale in each subdivision.



New-ish townhomes for sale in and around Harrisonburg:

• Avalon Woods
• Beacon Hill
• Blakely Park
• Harmony Heights
• Liberty Square
• Stonewall Heights
• Taylor Grove
• Taylor Spring
• The Gables
  
• The Townes at Bluestone
• Twin Gables
  
• Wellington Park
  

For more information about any of these townhome communities, or for any other smaller, older subdivisions, e-mail me (scott@HarrisonburgHousingToday.com) or call me at 540-578-0102.
 

Click here or on the image below to view the full March 2010 Harrisonburg & Rockingham County Real Estate Market Report (PDF).  Read on below for a few highlights.



Some high level February 2009 to February 2010 observations include:

• Inventory increased by 3%.
  
• Sales held steady (no change).
• Prices (median) declined by 3%.
• Days on market held steady (no change).

As can be seen below, we may be entering a new period of growth in our local real estate market.  Between 2004 and 2006, the pace of sales increased steadily.  Between 2006 and 2009, the pace of sales decreased drastically.  Over the past four months, we have seen the pace of sales stabilize and start to increase.



Don't delay -- get all of the exciting (and not as exciting) details and beautiful charts by downloading the full March 2010 Harrisonburg & Rockingham County Real Estate Market Report (PDF). 


If you find the information in this report to be helpful....

• Feel free to share it with your friends or colleagues.
• Let me know if you'd like to meet to discuss this report and/or the particulars of your real estate situation.
• Let me know if you would like to schedule a time for me to come speak to your company or an organization in which you are involved.
• If you'd like to re-publish all or part of this information on your web site or in an article, just let me know if you need any additional information or graphics.
• If you'd like to know even more about the housing market in Harrisonburg and Rockingham County, click here to subscribe to HarrisonburgHousingToday by e-mail or by RSS.
• Though I spend a considerable amount of time analyzing our local housing market,the majority of my time is spent helping people like you buy and sell real estate.  If you (or someone you know) will be buying or selling real estate sometime in the near future, I'd be delighted to have the opportunity to be of service.

Many thanks to Sue Robertson for highlighting this article from Housing Watch regarding multi-generational housing.  As this Housing Watch article reports....


The article is based on a study by Coldwell Banker, including the following observation....


I am definitely starting to see that trend occur, and quite a few of these buyers are ending up at The Glen at Cross Keys, where several of the floor plans work well for a multi-generational living situation.  Of note, most of these scenarios are a parent and an adult child buying together, not necessarily four generations of a family as shown in the stock photography above. 



Another house that I am currently marketing would work quite well for this as well because it has so much square footage and so many bedrooms and bathrooms:


Click here for details on 1911 Rhianon Lane, a 5 BR, 3 BA, 3600 SF home for $329,900.

Harrisonburg has steadily grown over the past ten years, and thus I would expect that we would see a gradual, steady increase of home purchases.  The recent history of home sales has not followed the slow and steady theory for the last ten years.  Below I have charted a gradually increasing rate of home sales (the red line) as I might expect them to be occurring. 



As you can see above, if there were approximately 900 home sales in 2000, I'd expect that we might be around 1100 home sales per year here in 2010.  Let's examine why sales history strayed so far from this path....



While I didn't think to ask this at the time, I now think it would have been reasonable to ask between 2001 and 2007 why there were so many people buying houses.  The blue sections of the yellow bars show the unexpectedly high home sales levels (per my rough calculations).  Here are my theories on why so many people were buying at that time:

1. Financing guidelines were loose --- you didn't need much income, or assets, or creditworthiness to obtain a loan.  You could even finance your closing costs!  These relaxed financing guidelines pumped buyers into the market that otherwise would have rented.
   
2. Investors were eager --- with home values escalating as quickly as they were at the time, many investors were buying properties they wouldn't have purchased in prior years when appreciation was more modest.  Rapid appreciation made longstanding investors buy more properties, and created lots of new investors in the market as well.
   
3. Appreciation was high --- you could buy a house one year, sell it a year later, and make money.  This increased the number of buyers in the market considerably, since in the past if you were only going to stay put for a year or two, you would have rented.
   

But now, as seen above, there are (if my red trend line is correct) fewer buyers in the market that could be or should be expected.  If we flip around the three factors listed above, we'll understand why:

1. Financing guidelines are strict --- some would-be buyers are being turned away by lenders, as the pendulum has swung significantly past center, to where many lenders are quite hesitant to write loans unless a buyer looks perfect from credit, asset and income perspectives.  This decreases the number of buyers in the market.
   
2. Investors are hesitant --- with several years of (slight) depreciation in our market, and significant depreciation in other markets, most investors are hesitant to buy right now.  I believe we have a lower than normal amount of investors buying residential properties right now.
3. Appreciation is low --- with median home values dropping slightly for each of the last several years, some would-be buyers are quite hesitant to buy right now.  Flat housing values at the present time mean that a buyer must stay put a bit longer in their home to have paid down their loan balance some before selling.  This has decreased the number of buyers who are in the market.

I believe that we will soon see an increase in the number of buyers in the market.  I believe that in 2010 we will see at least as many buyers as in 2009.  Only time will tell, but we may just be rounding a corner!

Less maintenance than a townhome, all of the amenities of Liberty Square (and more), one-level living, private entrances . . . . enjoy all of this and more in these 1,300 to 1,800 square foot new condos in Harrisonburg starting at $139,900, built by Scripture Communities.


Click here for more construction photos.

Despite snowy weather, construction is moving along quickly at Founders Way.  Below is a rendering of the finished product.



The first building of (12) condos will be complete in May 2010 or June 2010, thus making first time buyers for an $8,000 tax credit.  PLUS....the builder is offering a free granite upgrade for reservations prior to March 31, 2010.  PLUS....the builder is offering $3,000 of closing cost assistance.

Find out more at FoundersWay.com, call (540-578-0102) or e-mail me, or stop by the Liberty Square model on Fridays, Saturdays, Sundays or Mondays between 1:30 p.m. and 4:30 p.m.

Click here for Founders Way updates via Facebook

I was forwarded an article from CNN Money that offers an interesting perspective on understanding how home values may perform in the coming year(s)....


This make sense to me.  If it costs the same amount to buy as it does to rent, then someone would almost certainly buy instead of renting.


As one rough estimate, let's consider that new two-story Harrisonburg townhomes were selling for around $100k in 2000 (monthly cost of $720 with 100% financing at 6.75% fixed), and were leasing for around $725/month.  Thus, per my rough estimates, the leasing and buying costs were quite similar.


In 2006, these same townhomes were selling for $150k (monthly cost of $980 with 100% financing at 5.75% fixed), and were leasing for around $900/month.  Thus, Harrisonburg also saw a shift in renting being much more affordable, but not nearly as significantly as in some areas.


Per my numbers above, rents increased 24% in Harrisonburg (compared to 32% in the national study), and home prices jumped 50% (compared to 105% in the national study).


Interesting -- these townhomes are now selling at roughly $155k (monthly cost of $940 with 100% financing at 5% fixed), and are leasing for around $900/month.  Still virtually equivant.


Nationally, rental rates seem to be falling, though that is not largely the case in Harrisonburg.  If prices had increased more drastically here, then prices would probably be falling more drastically here, and rental rates would also be falling more drastically.

Yet again, the Harrisonburg and Rockingham County housing market seems to have performed, and be performing in a more healthy manner than much of the balance of the nation.

Or will they??

It's interesting, because most people assume that a LOT of sellers will be putting their homes on the market as we move into the spring and summer months.  That is to some extent true --- look at the last two years of inventory levels (below) and you'll note that there are certainly more homes on the market between April and September than any other time of the year.



But wait --- the variation isn't actually very significant.  The low inventory level has hovered around 800 for the past year, and the high around 940.  While the spring/summer inventory levels are 17.5% higher than the fall/winter levels, here's how it translates into a buyer's perspective:

• If there were 8 homes that were of potential interest in December, there will likely only be 9 (or maybe 10) of interest in June.
• If there were 16 homes that were of potential interest in December, there will likely only be 19 of interest in June.

The main take-away here is that buyers ought not hold out for those prime spring and summer months thinking they'll have extraordinarily more options than exist today (or yesterday) in the market.

Furthermore, sellers ought not be overly concerned that they'll have dramatically more competition in the spring/summer months because of sky high inventory levels.
 

Just a brief public service announcement, reminding you of the ever-entertaining "Power Search" function on my web site.  Use the "Keywords" field to search by all sorts of things, such as "short sale"......



As you can see, this gave us 14 search results.  Thus, if you've ever wanted to search for current short sale listings, you can do so using the Keywords field in my web site's Powersearch function.

Also, as some bonus analysis for today:

• 22 listings are described as "cute"
• 28 listings are described as "cozy"
• 175 listings are described as "spacious" (wow!)
• 4 listings are described as "fixer upper"

Did you, or can you find a additional fun search term?  Leave it in the comments, or e-mail me about it.

This was an interesting question from one of my clients --- relative to whether we should take the time to go look at a property that is currently under contract.  Their perspective was that if quite a few contracts fall through, it could be worthwhile to go look at an under contract property -- but if most stay together, then maybe not.

As it turns out, most homes stay under contract if they go under contract.

In 2009, 818 homes went under contract.  Only 77 homes came back from being under contract.


This contract success rate is a bit lower than past years, but much better than 2006!

• 2006: 998 homes went under contract, 120 contracts fell through  --- an 88% success rate.
   
  
• 2007: 1,118 homes went under contract, 79 contracts fell through  --- a 93% success rate.
   
  
• 2008: 882 homes went under contract, 70 contracts fell through --- a 92% success rate.
   
  
• 2009: 741 homes went under contract, 77 contracts fell through ---  a 91% success rate.

 

Good Luck!  There are only two listings on the market right now labeled as Dutch Colonial homes.  Let's take a look at what IS for sale . . . .



As you can see, ranches, townhomes, contemporary homes and colonial homes are your best (or at least most prolific) option in Harrisonburg and Rockingham County.  Also of note, here's what sold in 2009 . . . .



We find the same leaders -- ranches, townhomes, contemporary homes and colonials.  Thus, we have a bit of a chicken/egg dilemma.  Are these types of homes being sold because that's what people want, or because that's what is available.

Here are the full numbers for those who are curious . . . .

  . 

Over at HarrisonburgForeclosures.com, I post notices of upcoming Trustee Sales (foreclosure auctions).  The graph below shows how many trustee sale notices we've seen over the past 7 months.



As you can see, there has been a general increase over the past seven months, though it certainly could be a seasonal cycle since I don't have 12 months of data yet.

Do remember that these numbers do not indicate how many properties are actually foreclosed on, but rather the number of properties for which a trustee sale is scheduled --- regardless of whether it ends up taking place.

I'm working to get my hands on data about how many sales actually go through.  Stay tuned!

Jennifer Chapman, one of my associates at Coldwell Banker Funkhouser Realtors brought some very interesting data to light yesterday.  She noticed that there are fewer and fewer homes selling over $300k.  I thought I'd take a look . . . .

First, bear in mind that the median sales price has gone largely unchanged between 2006 and 2009, showing only a 3.5% decrease.  (full market report)  This would suggest (in some ways) that we've probably seen a roughly equivalent number of inexpensive and expensive homes selling over the past several years.  This actually does not turn out to be true . . . .



I can make plenty of guesses as to why we're seeing these shifts, including:

• The first time buyer tax credit has likely increased the number offirst time buyers, and thus the number of inexpensive home sales. 
  
• Most upper end home buyers have to sell an existing home before buying.  A slower market has likely slowed down this trading up process, and thus decreasing the number of high end homes.

Do you have other explanations for the shift in what types of buyers are actually buying in Harrisonburg and Rockingham County?  Let me know what your guesses are.  The fascinating part ot me is that despite a 35% increase in sales of inexpensive homes (sub $175k) and a 27% decrease in sales of expensive homes ($300k plus), we still only saw a 3% decrease in median sales price over the past three years!?!

Yesterday's Daily News Record featured an article on the short term rental situation at Massanutten Resort.  The latest update is that:



It has been an interesting four years (wow --- four years) that this debate has been going on, and it made me stop to think about the state of the Massanutten Resort housing market.  Below is a brief summary of changes in that market over the past four years, within the context of the Harrisonburg and Rockingham County housing market as a whole.



As can be seen above, Massanutten has seen a steady decline in the number of home sales taking place in each of the past four years.  That said, the Harrisonburg and Rockingham County market have seen a very similar decline.  The only deviation here is that the Massanutten market continued to decline rather significantly (35% drop) between 2008 and 2009 while the rate of decline slowed down somewhat in the Harrisonburg and Rockingham County market as a whole (13% drop).



The graph above shows changes in the median sales price of homes in the Massanutten Resort market as compared to changes in median sales price for the market as a whole.  The difference is staggering!  Harrisonburg and Rockingham County have seen a median sales price decline of 3.4% over the past four years. During the same time period, Massanutten Resort has suffered a 16% decline in median sales price.

It's impossible to know how much of a correlation exists between the soft Massanutten Resort market and the short term rental issue, but I believe this issue has certainly played some role in the changes depicted above.


Also . . . enjoy the second edition of Harrisonburg Real Estate Radio:

Assessments via Harrisonburg Real Estate Radio  [11:55]


Other recent podcasts: Home Inspections

One way to take a look at what is being built in and around Harrisonburg is by examining the Harrisonburg / Rockingham MLS to analyze listings circa 2009+.  First, or note, a full 14% of listings currently for sale in Harrisonburg and Rockingham County appear to be new construction.  (113 homes out of 793 homes).

Here's a big picture summary of these new homes for sale in our market:

• 51 are single family homes, and 62 are townhomes
• the townhomes are priced between $119,900 and $499,000
• the single family homes are priced between $76,495 and $738,600
• the median square footage of new single family homes is 1,868 SF
• the median square footage of new townhomes is 1,41F SF
• these new dwellings have been on the market an average of 194 days (six+ months)
  

If you're considering buying a new home in Harrisonburg, feel free to call (540-578-0102) or e-mail (scott@HarrisonburgHousingToday.com) to consult with me.  I work with quite a few builders and have become very familiar with the new construction process.

Also . . . enjoy the first edition of Harrisonburg Real Estate Radio:

Home Inspections via Harrisonburg Real Estate Radio  [08:38]

 

Somehow, the $8,000 tax credit for first-time buyers is getting all of the attention, meaning that most people don't even know about the $6,500 tax credit available to you if you've lived in your home for five years.

If you have owned your home for five or more years, you will (almost certainly) receive a $6,500 tax credit if you buy your next home by April 30th, 2010.  To clarify -- you must have a contract on the house by April 30th and close by June 30th.

Many people that I talk to who would be eligible for this $6,500 tax credit don't even know that it exists.  If you're in this situation and planning to buy a new house in 2010, you really ought to consider making a move in the first four to six months of the year. 

Click here for more information (from the IRS) about both tax credits.

Again, to try to really drive this point home:  If you've owned your house (and lived in it) for more than five years, you are very likely eligible for a $6,500 tax credit if you buy a new home by the spring/summer.

The U.S. Department of Housing & Urban Development approved  (some time ago) two updated forms that are CENTRAL to the real estate transaction.  These two new forms will go into effect on January 1, 2010:

• Good Faith Estimate (pdf)
• HUD-1 Settlement Statement (pdf)

The new forms (and accompanying rules) are intended to help home buyers (who are obtaining mortgages) to better understand and compare their mortgage options.  In theory, this will allow them to obtain better loan terms, lower interest rates, and lower settlement charges (closing costs).

The new Good Faith Estimate (GFE) is now a standard form across all lenders.  In the past a borrower would receive a GFE with a different format from each lender that they visited --- each having a slightly different set of disclosed loan terms, or vocabulary for referencing such terms.  Now, a buyer can compare two proposed mortgage scenarios from two different lenders and be able to quickly and easily compare the exact same terms from each.  I see this as a huge improvement for the financing process (for buyers), as in the past there has often been much confusion about how to determine which proposed loan program is better than the other.

Here is an excerpt from Page 1 of the new Good Faith Estimate, which (surprisingly?) is quite intelligible!



But there's more!  Beyond a buyer's (borrower's) loan terms and closing costs being easier to comparison shop, and easier to understand . . . there is also more accountability on the lender to make sure that those terms and costs stay intact through to closing.

Some of the costs CANNOT change from the Good Faith Estimate, others can only change by a certain percentage, and others that can change without limit.  This is a big improvement from current HUD guidelines whereby there was no guarantee that any of the closing costs or loan terms from a Good Faith Estimate would be carried through to closing.

If you're buying in 2010, or beyond, you'll have the benefit of these new lending guidelines.  Feel free to ask questions as you go through the process (of me, or of your lender) -- but hopefully the process will be much clearer and easy for you to navigate!

Thankfully, the value of homes in Harrisonburg and Rockingham County hasn't taken a nose dive like has happened in many other markets.  As you can see below, modest (normal?) growth in values occurred between 2000 and 2003, unbelievable (and unsustainable) growth in values occurred between 2003 and 2006, and prices became stagnant between 2006 and 2009.



That being said, since we haven't seen consistent growth in home values since 2006, there are some homeowners who are unable to sell their house (after costs) for as much as they bought it. 

Conventional wisdom pre-2003 said that you should only buy a house if you knew you'd be living in it for 5 or more years.  You see, with the principal balance of the mortgage declining SO SLOWLY at the start of a 30-year mortgage, it would take a full five years to have paid down the mortgage enough to cover the costs of selling.

As you might imagine from the graph above (or from talking to your friends), some people bought in 2003, 2004 or 2005, and then sold a year later at a tidy profit.  The market was going up so quickly that they could sell one year later with no financial detriment because of the high rate of appreciation.

Let's take a look at how our market has performed over the past decade by imagining that someone has to sell three years after they buy.



As per the chart above, a homeowner buying 2000 or 2001 would have been experienced a good sized gain.



The gain is starting to be more and more unbelievable at this point.  Buying in 2003 and selling in 2006 would have resulted in a whopping $53,000 gain, or roughly $18,000 per year.



While things are starting to slow down, we see here that someone could have bought as late as 2005 and been just fine, given that there was such a big jump in median home values between 2005 and 2006.



OOPS!  Wait a minute!  A $16,000 loss??  It's true --- if you bought in 2006 or anytime thereafter, and you want to sell your house, you'll need to prepare to do so at a loss, given the costs of selling.

The big question:  When will the median sales price start to stabilize?  When the supply of homes for sale starts decreasing more rapidly than it has, I believe we'll start to see the median price inch upwards again --- though not at the pace it did between 2003 and 2006!

Over the last few days I have had quite a few discussions with developers, builders, buyers, sellers, and other Realtors regarding the exciting change of pace our local real estate market experienced in November 2009.  To remind you of this astonishing news:

• November 2009 sales were 95% higher than November 2008.
  
  
• Home sales increased 30% between October 2009 and November 2009 -- a time period when we typically see a decline.
  
  
• November 2009 outperformed every other month of home sales in 2009 other than June and July.
  
  
• It looks as if 2009-Q4 will be the first quarter in four years with an increase in home sales as compared to the same quarter the prior year.

Read more here and here.

All of these are wonderful indicators, and we find yet another one at the top of this post, showing that while online property views (defined below) have been declining over the past few months, they are much higher than could be expected.  In fact, there were more properties viewed online in November 2009 than in March 2009. 

Wow!  We would typically expect that most buyers would be looking at properties online (and in person) at the start of the spring "buying season" -- but the graph above shows that there are still LOTS of buyers looking (at least online) at properties for sale.

Online property views is the sum of all property views on the Coldwell Banker Funkhouser Realtors network of web sites, including our company web site, and all agent web sites.

If you're building a home, what should you use as a driveway material?  There are a lot of options!

• Pavers, Brick or Stone
• Concrete, Stamped Concrete, or Exposed Aggregate
  
• Asphalt
• Gravel
• Dirt

Each has their own advantages and disadvantages, related to cost, appearance, durability, etc. 

Let's take a look at the most common types of driveways in Harrisonburg and Rockingham County.  The data source for this analysis is the Harrisonburg/Rockingham Association of Realtors MLS, so it's an inexact analysis, but can still provide some helpful insights. 



The chart above shows that the most common driveway material for single family homes in Harrisonburg and Rockingham County is gravel!  Beyond gravel drives, which are likely found mostly in the County, the most frequently occurring driveway is an asphalt driveway.  Let's take a closer look at driveways of single family homes in the City of Harrisonburg, to exclude the more "rustic" driveways found on homes further out in the County . . .



In the City of Harrisonburg, a full 1 in 5 driveways is still gravel, though asphalt driveways now lead the pack, with a full 10% greater market share than concrete driveways.



The graph above analyzes "expensive" homes --- those sold above $350k in the last year in Harrisonburg and Rockingham County.  Here we find an even more overwhelming share of asphalt driveways, though we also see an increase in the percentage of exposed aggregate driveways.



Perhaps most interesting is that when examining homes sold since Jan 1 2000, we find that most have had concrete driveways.  Is this perhaps the sign of a growing trend in our area, or the nation as a whole?


Notes:  In the last year, 570 single family homes sold in Harrisonburg and Rockingham County (per the HRAR MLS), and the analysis above is based on the 534 sales where driveway data was present and usable.