There is a slowly growing area just north of Harrisonburg that you may not have heard of or visited, but there are a variety of factors that may make it a growth area over the next several to many years.



A strategic plan has been created for this North Valley Pike corridor, that suggests turning an existing section of Route 11 into a main street area, with most through traffic diverted to a new road.  For an overview with lots of helpful links, read the post on hburgnews.



A research and technology park has been established amidst this corridor on 365 acres, owned and operated by Rockingham County. 



SRI International has established a 25-acre campus in the above-referenced research and technology park, and opened the Center for Advanced Drug Research, which is a "state-of-the-art research facility for conducting systems biology research in the areas of biodefense and neglected diseases."



An attractive subdivision of single family homes is being developed in this corridor area (I am marketing this subdivision) with prices starting in the low $200,000's. 



A new elementary school was recently built on Smithland Road, not too far from this North Valley Pike corridor.  This has created new traffic flow patterns, bringing greater awareness to the north side of Harrisonburg.

While most development has taken place just southeast of Harrisonburg in the recent past, the area just north of Harrisonburg will be a key area to watch over the next 3 to 20 years.

For each of the past four years, fewer and fewer home buyers have purchased homes in Harrisonburg and Rockingham County.  The annual rate of home sales has declined from 1,669 in 2005 down to 816 in 2009 – a decline of more than 50%.   Even though the first five months of 2010 indicate that sales activity may finally be starting to increase again, it is still a buyer's market.  There are far more sellers needing, hoping or wanting to sell than there are buyers who need, hope or want to buy.

In many senses, this is great news for buyers – there are fewer buyers to compete with, and more houses to choose from.  Add to that the amazingly low interest rates and you'll see why today's home buyer is excited to be in the market to buy.  But despite this excitement, most buyers want to make sure they are making a wise investment.  In years past, just about any home would do – when the overall market was increasing by 15% to 20% per year, just about any home would see great appreciation.  Now, however, prices are holding relatively stable, so it becomes more important which house a buyer chooses.  As you look at which particular house you choose, one perspective to consider is how you'll do when you re-sell the house you are buying.

Some homes currently for sale need updating – hardwood floors to be refinished, a roof to be replaced, wallpaper to be removed, or a driveway to be re-surfaced.  These homes that are need of some updates can be a good opportunity for buyers – if the seller is pricing based on these imminent costs.  An even better opportunity, however, is a home where brand new value can be added through your improvements.  If you sand and stain the hardwood floors, you will have added value through improving the look and ambiance of the home – but you had hardwood floors before your work, and you still do.  If you replace the roof, you will have added value through lower roof maintenance for the next buyer – but you had a roof before your work, and you still do.  As you look at homes as a buyer you should not only look for updates that you might choose to or need to make, but also totally new areas where you can create space to add value.  Homes with unfinished bonus rooms or unfinished basements offer lots of potential for adding brand new value.  The layout of some homes invites the addition of a deck or screened porch – both of which add brand new value – or perhaps an existing porch can be converted into a sunroom.  When you're just refinishing the existing spaces, you usually aren't changing the functional space offered to the next buyer – but if there is an easy way to add more functional spaces, this can offer you many options during your time of homeownership, and when you re-sell.

A second perspective to consider when buying in a buyer's market is the "timeless value" or quality found in a home you are considering.  Look for appropriately sized rooms, the types of rooms that you use on a daily basis, and the quality of construction and craftsmanship that means your home will still look great in 5, 10 or 15 years.  In this case, it's not just about buying the biggest house, or the house with the biggest yard.  Some 2,000 square foot homes have layouts that won't fit most people's lifestyles, where an 1,800 square foot home down the street might be perfectly designed for comfortable daily use.  In her very well read book, The Not So Big House, Sarah Susanka encourages us to think differently about the layout of a house:

"It's time for a different kind of house.  A house that is more than square footage; a house that is Not So Big, where each room is used every day.  A house with a floorplan inspired by our informal lifestyle instead of the way our grandparents lived.  A house for the future that embraces a few well-work concepts from the past.  A house that expresses our values and our personalities.  It's time for the Not So Big House."

Saranka points out that it's not all about quantity in a house, but about quality – quality in design and materials.

Finally, it is very important to consider location and neighborhood, when buying a home in a buyer's market.  A home can be beautiful, well designed, and desirable to all – but if it is located on a busy road, or in the far corner of the county, or on a street where most homes are old and poorly maintained, the future value of the home suddenly changes.  Buying an older home, or one that needs work, can be a much better opportunity for you, as you have more control over the changes to the value of your home.  You'll likely never reduce the traffic count on the road in front of your house, you'll never make city and employment growth stretch all the way out to your corner of the county, and you won't spend your free time fixing up the other ten houses on your block.  

With many more homes for sale than buyers to buy them, and with amazingly low interest rates, and with fewer buyers to compete with when negotiating a deal with a seller, it can be a very exciting time to buy a home.  When you do so, it is important to consider how well the home will fit your needs, but it is also wise to consider how the home you are considering will fare when you need to sell in 5, 10 or 15 years down the road.

I had heard from several of my clients this week that interest rates were VERY low --- but I didn't know they were the lowest EVER!  Current rates are the lowest on record, according to BankRate.com and others. 

Of note, I two of my clients locked in this week at 4.375% and 4.5% --- wow!

How do these incredibly low interest rates affect you?

• If you have an interest rate above 5.5%, it might be worthwhile considering a refinance.
• If you are buying anytime in the next six months, now may be a considerably more favorable time to buy rather than later.

Let's examine how an increase in rates (as compared to a current 4.5% rate) would affect a monthly payment. 



Put another way --- if you were buying a new townhome this week, could it be helpful to have an extra $1,600 in your pocket?  Or an extra $2,700 in your pocket?  Buying now, with low rates, can save you that much (annually) as compared to your costs if rates start to increase.

There are a LOT of homes on the market in the $300k - $400k price range, and I have recently been showing a lot of them to buyers.  I will then have follow up calls from the Realtors representing the sellers, wondering how things went.  Some of the houses are priced more competitively than others, and those sellers (and their Realtors) are often confused and frustrated when my buyer clients aren't ready to make an offer on their home.

Why aren't buyers necessarily jumping at the "best-priced" house on the block?  The main conclusion I have come to is that the layout of the house seems to be a significant trump card above all other factors. 

• A house can offer a compelling cost per square foot, be in immaculate condition, on a beautiful lot --- but if a family spends lots of time preparing for and enjoying family meals --- and the house has a small kitchen and small dining room --- the house probably won't work.
• A couple looking for a three bedroom house can find one in a great neighborhood, with many compelling features, but if the main living spaces are chopped up, and the couple wants an open and airy feel -- no go.
• A house might be priced at the lowest possible price in a neighborhood, and might boast more square footage than all of the neighboring homes --- but if the prospective buyers are looking for privacy in the backyard --- and the house is on a bare lot with no trees and an immediate view of all close neighbors --- the buyers will keep on looking.

The good news here is that even though there are a LOT of homes on the market, YOUR home might offer the perfect layout for a home buyer that has been waiting in the wings patiently viewing each new listing as it comes on the market.

The bad news is that if the layout or floor plan of your house is unpalatable to most buyers, your home may languish on the market.

Back in 2002-2006, just about any home would sell (regardless of the layout) because there were very few choices in homes.  Now that buyers have so many choices, they are often quite specific in wanting a layout in a home that works well for their day to day needs.

Click here to view my full June 2010 Harrisonburg & Rockingham County Real Estate Market Report.

Exciting Fact #1 --- May 2010 home sales declined 5% as compared to May 2009, but year-to-date sales (January through May) are up 10% over last January through May.




Exciting Fact #2 --- After three and a half years of steadily declining home sales (quantity, not prices), we have now seen stabilization or increases in home sales for over six months.




Not-So-Exciting Fact #3 --- Sales volume has declined sharply for four years now (red line), and median home values have declined gradually for two years (green line).  Despite early positive indicators for the past several months, we're not out of the woods yet.




Other tidbits that you'll discover in my June 2010 Harrisonburg & Rockingham County Real Estate Market Report include:

• Average days on market is down in May 2010.
• Inventory levels have hit a new high.
• Land sales (1+ acres) are soooo slow this year.

Click the image below to read the full report...

Lots of people who are renting have thought about buying . . . and lots of people who are thinking of buying wonder whether they should keep renting.  Here's a highly interactive calculator to help you compare your options, thanks to the New York Times.



Using this online calculator, you can enter in all sorts of variables including all of your up front and ongoing costs for buying as well as renting.  The resulting graph shows you how long it would take for it to have been worthwhile to have bought instead of renting.

The illustration above is with a $160,000 townhome purchase, compared to renting the same townhome for $950 per month.  With a 5% interest rate on a 97.5% mortgage, it would take four years to be worthwhile to buy --- if home values were increasing at 1% per year.  In the first three years, your annual costs would be higher for having bought.  Starting in the fourth year, your annual costs would be LOWER for having bought.

Longer term normalized price increases per year range from 3% to 4%.  With 3% per year increases in home values, you start having annual savings each year after only two years.

If you are wondering whether you should rent or buy a home, feel free to use this handy calculator, or schedule a time to meet with me and I can help you explore the pros and cons of each option.

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



Mixed indicators this month . . .

• Home sales declined 18% from 57 sales in March 2009 to 47 sales in March.
• The median sales price decreased 5% from $211k in March 2009 to $200k in March 2010.
• The average sales price increased 3% from $237k in March 2009 to $245k in March 2010.

As can be seen below, March sales were the first month this year where the sales pace was not equal to or greater than last year.  We'll need strong April sales to catch back up to the 2009 sales pace.



Also of note, we have seen a steady increase in Inventory over the past several months.  Lots of options for buyers --- lots of competition for sellers!




Don't delay -- get all of the exciting (and not as exciting) details and beautiful charts by downloading the full April 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.
• 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.

 

Explain this....



The number of properties viewed online (on our company site and all of our company's agent sites) has increased dramatically over the past year.  Thus, it seems that more buyers are hunting for homes.

But when we compare the number of closings in the first 28 days of last March and this March, we see a rather significant decline.

What is going on here?

• Will the last three days of March this year be much more exciting (in terms of closings) than the last three days of March 2009?
• Are a smaller percentage of potential buyers deciding to actually buy as compared to last year?
  
• Are our web sites simply more popular than they were last year, and a higher percentage of buyers are using our sites now?

What are your theories?

If you are considering the purchase of a new home in Harrisonburg or Rockingham County, you may want to check out HarrisonburgNewHomes.com, where you'll find an overview of many of the new communities being built in our area. 



I represent the builders of each of these communities, and am assisting them with the marketing of the new single family homes, duplexes and townhomes.  For more information about any of these neighborhoods, feel free to contact me or one of the other Realtors also marketing these communities:

• Scott Rogers, 540-578-0102, scott@HarrisonburgHousingToday.com
• Suzanne Trow, 540-383-7173, suzanne@cbfunkhouser.com
• Carey Keyes, 540-476-1988, carey@cbfunkhouser.com
• Jennifer Chapman, 540-746-4774, jennifer@cbfunkhouser.com
  

 

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 . . . .

  .