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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Price Points: estimating housing payments... |
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I often have conversations with people considering their first home purchase who want to first get an idea of how much they would have to pay for housing on a monthly basis. I have devised an Excel mortgage calculator that I can use to give them a rough idea, or I recommend that they call a lender to get pre-approved. | |
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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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The time-value of an interest free $7500 loan to first-time home buyers |
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Over the past few weeks I have been explaining to many first time home buyers that if they buy a home before July 1, 2009 they can take advantage of a $7,500 tax credit. Some, though, have been less than enthused because the full $7,500 tax credit has to be repaid over 15 years. Yes, that's right --- even though you will pay $7,500 less in taxes for the tax year in which you make your first home purchase, you do have to repay these tax savings in years three through seventeen. I thought I'd take a look at the value of what is essentially an interest free $7,500 loan. For this analysis, I am examining the aggregate savings from not paying interest on the $7,500, using a current interest rate of 6%.  As you can see --- over the course of the 17 years, you save a total of $4,050. Thus --- even though you are paying back the $7,500 tax credit, it is still at a significant ($4,050) savings. | |
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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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Looking for foreclosures opportunities in Harrisonburg & Rockingham County? |
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Over the past nine months I have posted quite a few foreclosures opportunities on this blog, HarrisonburgHousingToday.com. Yet during this time I have realized that not all of my blog readers are interested in hearing about houses that are coming up for foreclosure. Thus, I have created HarrisonburgForeclosures.com.  On HarrisonburgForeclosures.com you will find information and news about the foreclosure process, as well as updated information on properties that will be foreclosed upon in the near future. I will not be posting all foreclosure properties, but rather those where a reasonable opportunity exists for purchasing at a savings. If you are interested in knowing about foreclosures in the Harrisonburg area, you can subscribe to HarrisonburgForeclosures.com here. | |
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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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"First Time" Home Buyers --- Act Now! |
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 If you haven't owned a home in the last three years, you have a unique opportunity if you buy a home in the next 11 months (before July 1, 2009).The new Housing Bill signed into law by the President this week provides a $7,500 tax credit to first time home buyers (anyone who hasn't owned a home in the past three years) with income up to $75,000 for single people and up to $150,000 for married couples. When do I get the money? A $7,500 credit will be applied to your income taxes for the year in which you close on your new home. This doesn't reduce your taxable income by $7,500 (a tax deduction) --- it reduces the taxes that you pay by $7,500 (a tax credit). I've heard I have to give the money back? Yes --- the $7,500 must be paid back over 15 years, starting two years after you take the tax credit. This is an additional tax liability of $500 per year for those 15 years. So if I have to pay it back, why is this tax credit so exciting? In essence, you are being provided with a $7,500 interest-free loan. This can be the needed advantage for first time buyers to know that they can make a home purchase work for them. The $7,500 will certainly make up for what you paid for closings costs (in most loan programs) and even part of your down payment. If you have more questions, check out this list of frequently asked questions. | |
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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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Introducing . . . HarrisonburgHousingToday.com |
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 You may have noticed a new masthead on my blog --- HarrisonburgHousingToday.com. For those who might wonder, I made this change to more accurately represent the information presented on my blog. It's the end of an era, I suppose, as for the first nine months of this blog, it was known as... "Coffee With Scott :: Scott P. Rogers' Caffeinated Real Estate Blog"  I decided that my blog's old identity suggested that this source of local real estate information was all about Scott. In reality, it's about keeping you informed with the latest market updates, analysis and commentary about real estate in Harrisonburg and Rockingham County. One final coffee-related note --- as previously mentioned on my blog --- if you're interested in discussing any of the topics on this blog, or the details of your specific real estate situation, I am more than willing to treat you to a cup of coffee (or tea) at your favorite coffeeshop. Call, e-mail, or text me, and we'll set a day and time.... Call > 540.578.0102 E-mail > scott@cbfunkhouser.com Text > 540.578.0102 | |
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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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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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High gas costs are keeping (some) buyers closer to Harrisonburg. |
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 Back in April 2008, I asked the question of whether high gas costs should affect buyer behavior. I'm back to report that gas costs indeed seem to be affecting where people are willing to live. Over the past two weeks, I have had three separate buyer clients who have decided not to pursue a home (or homes) in a particular neighborhood or town because of the distance it would put them from their place of employment. All three work in Harrisonburg, and have decided to primarily look at properties located in the City. | |
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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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Foreclosure Sale --- 101 years old --- $52k of possible equity! |
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 The property pictured to the right (506 Virginia Avenue) was purchased 18 months ago (January 2007) for $185,000. The first mortgage, with an original loan amount of $148,000 is scheduled to be foreclosed upon on Wednesday, July 30, 2008 at 11:00 a.m.The house was built in 1907, and offers 2,514 finished square feet, 3 bedrooms, and 1 full bathroom. The property is currently assessed at $200,700 --- thus (potentially) offering a $52,700 equity opportunity. Do you have questions about this foreclosure sale, or about the foreclosure process in general? Feel free to ask (scott@cbfunkhouser.com, 540-578-0102). Or review the notice in the Daily News Record. | |
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Can I search for homes on your blog? |
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 I have had several people ask me this lately --- people who are planning to move to the Shenandoah Valley, and have been reading my blog to better understand the local real estate market. These two blog readers asked whether they could search for properties for sale on my blog.Can you? You bet! From my blog, you can click on the "Searching" tab on the top menu bar. (Or, since you're reading this post, you can click on the search image to the right). My hope is that you'll find that searching for homes in Harrisonburg and Rockingham County has never been easier. We give you quite a few search options: sdfs
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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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Scott Rogers
Coldwell Banker
Funkhouser Realtors
540-578-0102
scott@cbfunkhouser.com
Licensed in the
Commonwealth of Virginia
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