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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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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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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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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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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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July 2008 - Home Sales Down, Prices Up! |
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A few weeks ago I posted my Harrisonburg & Rockingham County July 2008 Real Estate Report. Below is a similar report issued by my company (Coldwell Banker Funkhouser Realtors). Slightly different analysis -- and definitely interesting to review. (click the image for a PDF) Generally speaking, home sales are down, but prices are up!  | |
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The effects of motivated, equity-laden home sellers |
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As I regularly mention, even though home sales are down in this area (the number of properties being sold) -- median and average prices are staying steady or increasing slightly. And yet, there is an interesting phenomenon going on that I have observed several times lately in different neighborhoods in Harrisonburg... | |
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Rockingham County single family home building activity slows |
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This is probably no surprise, but the number of single family homes being built each year has diminished for the past few years. The graph below shows the number of single family home building permits that have been issued for each of the past few years.  The 2008 figure is extrapolated from the January 2008 - June 2008 data showing 208 permits. This is likely a good thing for our market, as some price ranges still have a significant excess of housing supply. For example, 27 months of inventory exist in the $400k+ price range for the City of Harrisonburg and Rockingham County. Perhaps this gradual decrease in the number of new single family homes being built is what has allowed our market to continue to see (slow and steady) increases in price --- median sales prices are up 3.5% over last year. | |
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Go For The Gold: How to compete and win as a home buyer |
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Are all buyers created equal? Certainly not --- especially from a seller's perspective in our current market.  Here's how I would rank buyers, from the most exciting to sellers (#1) to the least (#9)...
The good news is that you can (sometimes) take steps to move up this list:
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Harrisonburg & Rockingham County July 2008 Real Estate Report |
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 While the pace of home sales continues to be low compared to 2007, home prices continue to increase at a modest rate. Both median and average home sales prices in July 2008 showed an increase over July 2007 by 2% and 4% respectively. When examining the year to date (1/1/2008-7/31/2008 versus 1/1/2007-7/31/2007), both median and average home sales prices in 2008 showed an increase over 2007 by 4% and <1% respectively. Despite a slower rate of home sales, buyers are committing to properties this year at a similar pace as in 2007. During July 2008, buyers ratified contracts on 94 properties, as opposed to 98 properties in July 2007 -- this is only a 4% year over year decline.  Following the seasonal trend of the past several years, July 2008 home sales were slower than in June 2007. In July 2008, 90 buyers closed on homes in Harrisonburg and Rockingham County, as opposed to the 109 home sales in June 2008. If seasonal trends of the past several years continue, August home sales will likely be slightly higher than July 2008 sales figures.  Absorption rates remained relatively unchanged over the past month. The number of months of supply of homes for sale in Harrisonburg and Rockingham County remained relatively unchanged as August 2008 begins, as compared to the start of July 2008. Lower price ranges continue to have show healthier inventory levels as related to buyer demand. | |
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Our perspective on real estate re-framed |
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During these hot days of summer, swimming or relaxing at the pool is a delightfully fun treat. But have you been to a water park?? Your fun is certain to be amplified --- with water slides, wave pools, hot tubs, a lazy river, and more. If you spent a month visiting the Water Park each day, and then had to return to a plain old public pool, it would certainly be somewhat disappointing.  How does this all relate to real estate? We spent five years at the water park, and for the past two years we've been back at our regular, plain old swimming pool. Some people are having a hard time being excited about it. After a few years of double-digit per-year appreciation many people began to consider that the norm. And if such an appreciation rate were to continue indefinitely, everyone that could possibly buy real estate should buy real estate. Creative financing programs kept up with the excitement of hopeful homeowners by enabling more and more people to buy homes during the real estate craze of 2003-2007. But now, in 2008, we find ourselves without double digit increases in the value of our home each year. According to the City of Harrisonburg, values of homes under $300,000 increased by 3- 6% between 2007 and 2008. In conversations with homeowners, most seem to feel that their home value is staying steady, some feel like it may be declining, and some feel confident that it is increasing. Regardless, within the recently past context of a 10%-20% gain per year, it's just not as exciting to buy or own real estate right now. But wait --- perhaps we are forgetting something! Certainly, the public swimming pool seems mundane after 30 days straight at a water park, but would that contrast really cause us to stop going to the public swimming pool altogether? To have such a disinterested attitude would be ignoring the fact that it is still a hot summer, and the public pool can be a refreshing and relaxing place to spend our time. Likewise, we shouldn't forget all of the benefits of owning real estate, even when we're not seeing 10+ percent appreciation. BUILDING LONG TERM WEALTH – Owning your home is, arguably, the best way to passively create long term wealth. For almost everyone, a portion of your monthly budget will be used to provide you with shelter. If you own your home, this unavoidable monthly housing expense will be paying down the principal balance of your mortgage, and will allow you to reap the benefits of appreciation over the long term. SHORT-TERM TAX SAVINGS – Even without waiting for the eventual payout when you sell your home, by owning a home you will save money on your taxes each year by deducting the interest you pay on your mortgage. STABILITY – Unless you enjoy the moving process, owning your own home also provides you with a sense of stability. You won't need to find another rental property if the owner decides to sell. You can also make improvements to your home that will benefit you (instead of your landlord) over the long term. Swimming (or going to the pool) isn't for everyone – some people don't know how to swim, are afraid of the water, or burn easily in the sun. Likewise, everyone shouldn't run out and buy a home – some people are transient based on their career, or are still building up a down payment. But as you consider whether buying a home might be right for you --- don't get discouraged by the fact that you may not see 18% appreciation in your first year of owning the home --- focus on the long term benefits of home ownership that have persisted through the decades. | |
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$7500 interest-free loans, and other perks of the housing bill |
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The president is expected to sign a new housing bill today (July 29, 2008) that may have significant implications for current and hopeful homeowners. Here are a few highlights:
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The tables have turned --- SELLERS are now making offers! |
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 Here's an interesting phenomenon --- in most real estate transactions, the buyer makes the first move, by submitting an offer to purchase a house.In stark contrast to this (time-proven?) norm, I have recently had several Sellers make an offer to sell. More specifically, when it became known that a buyer was seriously considering the purchase of the seller's home, the seller proactively either:
If you are a seller, considering such a strategy, I would advise you to consider that:
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Are we in this alone? How is the rest of Virginia doing? |
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 For many sellers, this is a challenging real estate market. For buyers, of course, it can be a wonderful time (lots of selection, lots of negotiating power). But back to the sellers --- you might wonder if we're in this alone, or if other parts of Virginia are seeing similar trends and conditions as we see here in Harrisonburg and Rockingham County. It's o.k. to take a peek --- here's what you'll find: Almost everyone, including Harrisonburg, is seeing a decline in the number of homes being sold. Of the 21 markets being measured, only 3 saw an increase in sales --- though Harrisonburg's 23% decline was worse than the overall decline of 13% across the state. Most areas are seeing median price declines, but not Harrisonburg! Out of the 19 markets being measured, 12 showed a decrease in median sales price. Harrisonburg showed no change (increase or decrease). A large majority of areas are seeing average price declines, including Harrisonburg! Out of the 22 markets being measured, 18 showed a decrease in average sales price, including Harrisonburg's 6% decline. The stats above are pulled from the Virginia Association of Realtors' 2nd Quarter home sales report. You can review the entire report, or the stats supporting the report. Please do note that this report is based on 2008 second quarter stats, as compared to 2007 second quarter stats. | |
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Selling Building Lots via Auction |
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Stone Spring Manor is a newly developed subdivision in the City of Harrisonburg featuring 19 building lots. Prior to July 2008, seven of these building lots had sold, several of them having homes built on them. The lot sales included sales prices between $58,000 and $79,800. The home sales included sales prices between $262,000 and $292,000. Yesterday (7/16/08), the remaining 12 building lots were to be sold at auction. The auction generated a quite a bit of interest, with close to 30 or 35 people present. Much of the draw was likely a curiosity of the price at which these lots would sell. So, how did it go down?  The plat above and the chart below show the order in which the six lots sold at auction, and their prices. Lot Sale #1 Lot 14 $46,000 Lot Sale #2 Lot 15 $38,000 Lot Sale #3 Lot 16 $39,000 Lot Sale #4 Lot 3 $34,000 Lot Sale #5 Lot 11 $33,000 Lot Sale #6 Lot 9 $38,000 The remaining lots are for sale with asking prices between $46,500 and $64,400. | |
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At the close of the first half of 2008, here's another look at the Harrisonburg housing market. |
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Here is a quick overview of the current state of the Harrisonburg and Rockingham County housing market:
Click on the chart for a printable PDF, or click here for some additional analysis of the Harrisonburg housing market in the first half of 2008. | |
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Housing supply remains steady in Harrisonburg and Rockingham County (except those high-priced homes!) |
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This past week, I overheard someone at the grocery story telling their friend "Can you believe how many homes are coming on the market? I don't know when they'll all sell!?!" Many seem to share this sentiment. You might find it interesting, then, that housing supply is actually remaining rather steady (compared to demand) in all but the highest price range. Click on the graph below for a printable PDF, and read below the graph for more information on how I calculate these values.  The number of houses on the market at any given time is only relevant within the context of how many people are buying. If 100 houses are for sale and 100 houses are being bought each month, we have a very different market condition than if only 10 houses are being bought each month. Thus, to compare housing supply and demand in Harrisonburg and Rockingham County, I use the following process: 1. Calculate the average number of sales per month over the past 12 months. 2. Calculate the number of houses currently for sale. 3. Divide the number of houses for sale by the average sales rate per month to find out how many months it would take to sell the current inventory. The numbers you see in the graph show the results of these calculations. Let me know if you have any questions, or suggestions for additional analysis. | |
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What are the SIZES of new construction single family homes being sold in Harrisonburg and Rockingham County? |
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Over the past 18 months (January 1, 2007 through June 30, 2008) 138 single family homes have been built and sold in Harrisonburg and Rockingham County, as reflected in the HRAR MLS. The sizes of new construction homes that are selling might be of interest to home buyers, home sellers, builders and developers...  Click on the graph above for a printable PDF. | |
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What are the PRICES of new construction single family homes being sold in Harrisonburg and Rockingham County? |
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Over the past 18 months (January 1, 2007 through June 30, 2008) 138 single family homes have been built and sold in Harrisonburg and Rockingham County, as reflected in the HRAR MLS. | |
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Scott Rogers
Coldwell Banker
Funkhouser Realtors
540-578-0102
scott@cbfunkhouser.com
Licensed in the
Commonwealth of Virginia