February 2017 - HarrisonburgHousingMarket.com

FEBRUARY 2017 Harrisonburg & Rockingham County Real Estate Market Report An analysis of real estate activity through January 31, 2017. provided courtesy of Scott P. Rogers, Funkhouser Real Estate Group

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[1] MARKET SUMMARY

HOME SALES REPORT Harrisonburg & Rockingham County # Home Sales

February 9, 2017

2014

2015

2016

2017

% Change ('16 - '17)

January

55

49

67

65

-2.99%

Year-To-Date (Jan)

55

49

67

65

-2.99%

1,073

1,075

1,144

1,309

14.42%

Last 12 Months (Feb-Jan)

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Median Sales Price

7/28/2008 3:10:30

2014

2015

2016

2017

% Change ('16 - '17)

January

$155,000

$195,000

$194,000

$182,500

-5.93%

Year-To-Date (Jan)

$155,000

$195,000

$194,000

$182,500

-5.93%


$175,000

$179,900

$185,000

$192,000

3.78%

2014

2015

2016

2017

% Change ('16 - '17)

January

57

81

77

48

-37.66%

Year-To-Date (Jan)

57

81

77

48

-37.66%


64

66

55

48

-12.73%

Median Days on Market

We just closed out a very strong year of home sales in Harrisonburg and Rockingham County and are now looking at just one month of data for 2017. As such, throughout this report, I will be reflecting on January 2017 data, as well as data for the past 12 months -- February 2016 through January 2017. As shown above, January 2017

home sales were at about the same place (-3%) as they were last year -- and we are now seeing a 14% year-over-year increase in home sales when viewed from a 12 month perspective. During that same (12 month) timeframe, home prices have increased 3.78%, and median days on market has declined by 13%.

Published on February 9, 2017 by Scott P. Rogers, Associate Broker, Funkhouser Real Estate Group, based on data from the Harrisonburg-Rockingham Association of REALTORS (R) MLS for the period of 01/01/2000 - 01/31/2017.

[1] MARKET SUMMARY

HOME SALES REPORT :: BY AREA City of Harrisonburg

Rockingham County

# Home Sales

2016

2017

% Change

2016

2017

% Change

January

27

28

3.70%

40

37

-7.50%


389

441

13.37%

755

868

14.97%

. Rockingham County

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City of Harrisonburg

7/28/2008 3:10:30

Median Sales Price

2016

2017

% Change

2016

2017

% Change

January

$168,000

$173,750

3.42%

$214,000

$192,000

-10.28%


$166,500

$166,000

-0.30%

$194,900

$201,000

3.13%

City of Harrisonburg

Rockingham County

Median Days on Market

2016

2017

% Change

2016

2017

% Change

January

88

51

-42.05%

76

48

-36.84%


53

34

-35.85%

58

58

0.00%

Home sales stayed relatively stable in January 2017 between the City and County -- with a 3.7% increase in the City and a 7.5% decrease in the County. Looking at a longer timeframe (the past 12 months) we see that both areas of our local market (City and County) have seen a healthy increase in sales -- with a 13.37% increase in

the City and a 14.97% increase in the County. During the same timeframe, home prices have increased 3.13% in the County while they have stayed relatively level (-0.30%) in the City. All that said, homes are selling more quickly in the City than in the County based on sales in the past 12 months.


[2] RECENT TRENDS Harrisonburg & Rockingham County

Month-By-Month Home Sales History 175 2014 158

2015

150

151

2016

Single Family, Townhome & Condo Sales

2017

133

134 125

125

January 2017 65 Home Sales

100

85 75

67

65 56 50

49

68

72

53

58

FEB

MAR

68

101

110 107

111

128

126

114

108

106

111 logo.indd 1

97

93

112 105

113

7/28/2008 3:10:30

97

97

81

95

79

84

68

25

0

JAN

APR

MAY

JUN

January 2017 looks as we’d expect it to look -- with 65 home sales. This comes in slightly under the pace of January sales last year -- but well above the prior two years. If last year is any indication, we are likely to see a similar amount of sales in February 2017 -- perhaps 65 to 70 sales. Then, we will start to see a moderate

JUL

AUG

SEP

OCT

NOV

DEC

uptick in March, before things really get moving in April, May and June. I am always hesitant to predict too much about the coming year when we have only seen January home sales, as this is a much slower time of year, and is often not instructive as to what the following months of home sales will look like.



Monthly Cumulative Residential Sales 1400 1300 1200 1100

1,067

1000 900 800 700 600

832 747 685 623

0

910

920

839

817

808

743 664

734

500

383

400

400

299

308

226 146 79 40

228 154 87 41

296

2011

2012

462

100

900

497

400

200

988

592

542

300

974

618

500

1,085

697 591 466 355

192 121 49

248 167 109 46

2013

2014

This colorful graph offers another way to look at the overall sales trends for the past few years in the Harrisonburg and Rockingham County housing market. As shown above, our local housing market experienced small incremental growth between 2013 and 2015 before seeing a sharp uptick in home sales last year in 2016. Thus

1,125 1,041 962 857 760 634

1,309

DEC

1,215

NOV

1,102

OCT

1,005

SEP AUG

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877

JUL

719

JUN

605

MAY

526 392 282 189 117 49 2015

7/28/2008 3:10:30

454

APR

321

MAR

220

FEB

135 67

65

2016

2017

JAN

far, even with just one month of data to work with, it appears we could have a similar year in store for our local housing market. We will know quite a bit more as we move through February and March, to see if we are keeping on pace with the robust sales seen last year.



$192,000

$190,000

$190,000

$186,250

$185,750

$185,000

$186,000

$185,000

$186,500

$186,000

$185,000

$185,000

$185,000

$185,000

$186,000

$185,000

$185,000

$185,000

$185,000

$180,000

$179,000

$179,900

$179,700

$178,000

$177,000

$176,500

$174,321

$174,700

$173,000

$175,000

$174,900

$176,500

$175,000

$175,000

2,000

$175,000

2,500

$189,000

# Home Sales, Median Sales Price in each 12 Month Period

$192,500

Time-Adjusted Home Sales Trends :: All Homes $200,000

$190,000

$180,000

$170,000

Stable 1,308

1,310

1,299

1,273

1,265

1,242

1,210

1,204

1,187

1,164

1,143

1,143

1,138

1,125

1,127

1,148

1,134

1,128

1,145

1,122

1,119

1,107

1,093

1,078

1,085

1,081

1,077

1,058

1,040

1,030

1,033

1,022

1,019

1,055

1,042

1,074

1,156

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1,500

$160,000

7/28/2008 3:10:30

$150,000

$140,000

1,000

$130,000

$120,000

500

$110,000

0 Jan-14

Jan-15

This graph shows a rolling 12 months of the number of home sales in the Harrisonburg and Rockingham County area, as well as the median price of the homes that sold during these time frames. Each data point shows one year’s worth of home sales, which eliminates the volatility of evaluating sales figures on a monthly basis. Over

Jan-16

$100,000 Jan-17

the past three years we have seen relatively consistent increases in the annual pace of home sales, which has now risen to more than 1,300 sales/year. And after many years of median sales prices hovering between $173K and $175K, they finally made their way up to $185,000 by summer 2015 and have now risen above $190,000.


[3] LONG TERM TRENDS Harrisonburg & Rockingham County

Home Sales & Price Trends Single Family Homes & Townhomes

$250,000

1,800

+14%

1,000 +4%

$127,700

800

$122,588

+17%

1,248

-6%

+1%

+2%

$192,500

$185,000

+4%

+4%

1,067

+2%

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1,085

$200,000

1,309 +17%

-23%

967

+2%

$178,000

-13%

-3%

$175,000

-5%

1,122 +3%

$182,500

$169,900

+14%

1,153

$149,000

1,200

n/a

$172,375

+15%

$192,983

1,324

+1%

$169,900

1,400

$179,900

1,438

+14%

$185,000

-14%

1,507

$195,000

1,600

$195,100

1,669 +11%

+19% -10%

870

-8%

799

+4%

832

+8%

$150,000

7/28/2008 3:10:30

900

$100,000

600

400

$50,000

200 65 0

2002

2003

2004

2005

2006

2007

2008

2009

This graph provides an overall indicator of the state of our housing market, showing both the number of homes being sold each year since 2000 (yellow bars) as well as changes in the median sales price during the same time period (blue line). This past year (2016) marks the sixth (!) year in a row when we have seen an increase

2010

2011

2012

2013

2014

2015

2016

2017

$0

(+17%) in the pace of sales in our local market, which was also accompanied by a 4% increase in the median sales price. This 17% increase in the pace of sales far exceeded the increases seen in the prior two years (2%, 3%) and likely contributed to the additional 4% increase in the median sales price.



Home Sales & Price Trends Single Family Homes

1,400

1,000

800 $147,000

$136,000

-1%

+5%

+7%

$227,450

$214,000

$200,000

$190,000

-2%

$192,000

+6%

$225,000

978

909

$175,000

+20% -12%

+16% +8%

600

+24%

880 $170,000

851

-6%

-11%

+16% +3%

-4%

$195,000

1,024 n/a 1,025

$184,000

-6%

$195,000

-4%

$203,000

-1%

$215,000

+8%

$223,575

1,200

$226,800

$210,000

$275,000

813

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798

819

n/c

818

7/28/2008 3:10:30

+21%

-15%

678

+1%

-11%

602

-1%

595

+10%

653

+3%

672

$125,000

$75,000 400

$25,000

200 40 0

2002

2003

2004

2005

2006

2007

2008

2009

The single family home market in Harrisonburg and Rockingham County improved significantly between 2015 and 2016. After three years of relatively little change in the number of single family home sales (813, 819, 818) we saw a sudden and dramatic increase to 978 home sales. Looking back, there have only been two

2010

2011

2012

2013

2014

2015

2016

2017

-$25,000

years (2004, 2005) when more single family homes were sold in Harrisonburg and Rockingham County. This 20% increase in the pace of single family home sales was accompanied by a 7% increase in the median sales price.



Home Sales & Price Trends Duplexes, Townhomes & Condos

529

444

$103,100

+47%

300

+14%

302

$118,500

+5%

-6%

-15%

+10%

$108,200

400

+9%

483

+3%

n/c

-1%

$158,000

$180,000

$160,000

$140,000

450

$134,950

500

+11%

$149,500

-9%

$151,750

-3%

$151,750

+19%

$137,250

-4%

$132,750

$166,635

+2%

$140,500

+33%

+2%

$154,250

-18%

$159,545

600

$163,800

644

$160,850

700

$120,000

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-36%

289

304 -7%

268 228

-24%

204

200

-12%

+11%

254

+5%

266

+9%

7/28/2008 3:10:30

$100,000

331

+14%

$80,000

+27%

$60,000

179

$40,000 100 $20,000 25 0

2002

2003

2004

2005

2006

2007

2008

2009

After six years (2005-2011) of rapid declines in the pace of townhouse sales in Harrisonburg and Rockingham County, the pace of sales has been rebounding since 2012. The 331 sales seen in 2016 marked the highest level of sales seen anytime between 2008 and 2016. Despite the continuing increase in the sale of townhouses

2010

2011

2012

2013

2014

2015

2016

2017

$0

(and duplexes and condominiums) we did not see any further market recovery in 2015 when it comes to price, and in fact, the median sales price of these properties dropped slightly to $149,500 -- down 1% from the median sales price of $151,750 in both 2014 and 2015.



Market Balance between Buyers and Sellers 1000 900

929 924 913 904 893 881 870 860 849 839 831 822 813 801 791 780 770 757 744 730 718 705 694 686 679 674 664 656 646 641 637 635 632 631 628 624 622 617 618 622 625 628 630 631 633 633 635 635 634 633 631 627 625 622 616 612 607 608 609 611 610 610 609 606 599 592 603 619 635 631 648 654 653

Assuming Six Months of Housing Supply is a Balanced Market

SELLERS

700 600 500 400 300

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Large Over Supply = Buyer's Market

7/28/2008 3:10:30

A Relatively Balanced Market

376 368 374 372 370 352 365 373 386 389 389 397 397 401 403 401 406 407 416 422 416 425 444 432 436 447 447 462 472 477 486 496 503 509 492 507 510 502 496 482 484 491 495 491 504 515 518 521 518 527 535 543 547 560 554 565 560 559 565 560 570 570 577 581 593 600 584 578 569 556 542 530 516

800

BUYERS

200 100

It happened! It really happened! Most housing market analysts consider six months of inventory (active listings) to be an indicator of a balanced market (between buyers and sellers). The “BUYERS” trend line above is illustrating how many buyers are buying in a six month period. The “SELLERS” trend line above is illustrating how

Jan-17

Nov-16

Sep-16

Jul-16

May-16

Mar-16

Jan-16

Nov-15

Sep-15

Jul-15

Mar-15

May-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

Nov-13

Sep-13

Jul-13

Mar-13

May-13

Jan-13

Nov-12

Sep-12

Jul-12

May-12

Mar-12

Jan-12

Nov-11

Sep-11

Jul-11

Mar-11

May-11

Jan-11

0

many sellers are in the market (active listings) at any given time. Over the past four years we have seen a steady increase in buyers and a declining number of sellers. And finally, in June 2016, these two trajectories crossed! There are more buyers buying in a six month period than there are homes for sale!



Median Price vs. Price Per SF (Single Family Homes) Median Price

Price/SF $350,000

140

$129

$127

$127 $117

$116

120

$113 $101

$97

100

$87

$227K

$81

$210K

80

$103

$105

$106

$215K

$203K

$136K

$250,000

$214K $195K

$184K

$195K

$192K $190K

$170K 60

$108

$114

$113

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$224K

$300,000

Median Price Per SF

$225K

$200,000

$200K

Median Sales Price

$150,000

$147K $100,000

40

$50,000

20

0

7/28/2008 3:10:30

2002

2003

2004

2005

2006

2007

2008

2009

In addition to monitoring home values by overall median sales prices in our market, it can be insightful to examine the median price per square foot of homes that are selling. The graph above shows the median price per square foot of all single family homes sold over the past 10+ years. The value trend captured by this graph is quite

2010

2011

2012

2013

2014

2015

2016

2017

$0

similar to the trend shown in the single family home median sales price during the same time, which validates that assumed set of changes in home values. Over the past year (2015 to 2016) we have seen increases in both the median sales price as well as the median price per square foot of single family homes.



Median Price Per Square Foot by Home Size Single Family Homes

0 - 1,499 SF

1,500 - 2,500 SF

2,500+ SF

150

140

$138

130

$127 $123

120

$126 logo.indd 1

$121 $117

$117

$115

$104 100

$106

$105

$104

$106

$101 $103 $96

$97

$114 $114

$108

$105

$115

$114

$111

$111

110

7/28/2008 3:10:30

$121

$105

$106

$101

$98

90

80

2008

2009

2010

2011

2012

Price per square foot of single family homes certainly varies for many reasons, including the age, location, lot size and structural characteristics of each home sold. However, there are some similarities in homes of a similar size. In looking at 2016 figures, this graph illustrates that the median price per square foot of larger homes

2013

2014

2015

2016

2017

(2500+ SF) is a good bit lower ($105/SF) than that of homes with less than 1500 SF ($126/SF). These values cannot be used as an absolute standard against which the value of any home can be measured, but they can provide some helpful guidance when trying to determine the value of a home.



Median List Price to Sales Price Ratio within the context of Home Sales Pace

2,000

1,750

97.8%

98.1%

99.1%

99.1%

98.9%

98.0%

98.0%

1,669

96.0%

96.0%

96.0%

97.0%

97.0%

97.0%

100.0%

1,438

1,324 1,250

98.0%

95.0%

1,507

1,500

97.0%

98.0%

1,309

1,248 1,153

90.0%

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1,067 967

1,000

870 799

832

1,085

7/28/2008 3:10:30

1,122

900

85.0%

750 80.0% 500 75.0%

250

65 0

2002

2003

2004

2005

2006

2007

2008

2009

This graph shows the average list price to sales price ratio (red line) over the past 15 years as compared to the overall pace of home sales. At the peak of the housing boom (2004-2006) sellers were able to obtain a median of 99% of their asking price --- up from a median of 97.7% in 2001 before the pace of home sales started

2010

2011

2012

2013

2014

2015

2016

2017

70.0%

escalating. Then, when the pace of home sales slowed (through 2010) we saw a decline in this metric to 96%, where we stayed for three years (2010, 2011, 2012). Sellers started selling for slightly more in 2013-2015 when they could obtain 97% of their list price, and this increased to 98% in 2016.



New Construction Single Family Home Sales Trends Number of Sales, Median Price Per Square Foot

200

186 200

180

$133

$141

$140

$136

$129

$128

$129

$130

150

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7/28/2008 3:10:30

109

$114

$105

80

$99

100

$137

121

120

$146

139

$144

140

137

$150

140

$165

158

160

84

60

41

40

100

82

45

51

54

47

50

38

20

3 0

2002

2003

2004

2005

2006

2007

2008

2009

New home builders experienced a steady decline in new home sales between 2006 and 2010 -- dropping 78% from a peak of 186 to 41 sales in a year. Even if we use a starting point of 2001 (before the housing boom) we still see a 70% drop between 2001 and 2010. The number of new home sales per year has not crept up much

2010

2011

2012

2013

2014

2015

2016

2017

0

since that time -- staying between 38 and 54 new home sales per year. This past year, however, was QUITE different. There were a total of 82 new home sales last year, exceeding the full year of sale seen for each of the past six years -- a welcome sign for new home builders!


[4] BUYER ACTIVITY Harrisonburg & Rockingham County

Buyers Per Month Commiting to Buy Properties 180

158

160 145 140

141

135

133 123

120 107 100

118

112

109 102

80

109

108

98

94

91

119

118

114

75

68

99

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86 77

130

128

126

76

7/28/2008 3:10:30

93

84

82 70

63

74 67

63

67

60

40

Annual Pace: 1,324 contracts 20

Annual Pace: 1,200 contracts

Annual Pace: 1,170 contracts

This graph clearly illustrates what a busy buying season it has been over the past year. We have seen an average of 111 contracts per month over the past year -- as compared to an average of only 98 contracts per month during the same timeframe in 2015. As we continue through 2017, it will be instructive to watch these contract

Jan-17

Dec-16

Nov-16

Oct-16

Sep-16

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Jan-16

Feb-16

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

Feb-15

Mar-15

Jan-15

Dec-14

Nov-14

Oct-14

Sep-14

Aug-14

Jul-14

Jun-14

May-14

Apr-14

Mar-14

Feb-14

Jan-14

0

figures to have an early look at what we might see in the way of home sales. Inventory levels are currently very low in several price ranges, which might limit the amount of contract activity we see in 2017. January 2017 contracts (all 67 of them) were slightly below the pace from last January when 74 contracts were signed.


[5] INVENTORY LEVELS Harrisonburg & Rockingham County

Inventory Levels (end of month)

700

623 600

577 542 541

659 653 644 635 636 640

619 560

570

581 582

568

532 539

500

549

560 532 480 451 413

400

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7/28/2008 3:10:30

368

300

200

100

0

Overall sales activity is the combined effect of many would-be home buyers deciding to make an offer on a particular home -- and those decisions are not typically taken lightly. In contrast, changes in inventory levels are the effect of many homeowners deciding to list their home for sale -- which may be a significant decision, but it is not

always so. Some homes that are on the market have been listed for sale by sellers who are “testing the market” and as a result, inventory levels can shift more quickly than home sales trends. Inventory levels have been declining drastically over the past year -- and are now 31% lower than they were one year ago.



Inventory Levels by Property Type Single Family Homes

Townhomes, Duplexes, Condos

600

270

501 500

477

250

487 481 485 493

445

400

391

405

160 151

408

381

172 300

445

178

418

439 436 430

230

416

435 403

392 392

210

372 343

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182

318

174 166 157

190

282 154

151

147

152 150

200

147

143

139

150

133 125

129

130 110

95 86

0

This graph examines the differences in inventory levels over time when examining only single family homes as compared to attached dwellings (townhouses, duplexes, condos). The number of single family homes for sale has decreased by 28% over the past year, while the number of townhouses, duplexes and condos for sale has

170

152 151

108 108 100

7/28/2008 3:10:30

90 70

decreased by 43% over the past year. All we can hope is that these inventory levels will start to climb again as we enter the Spring market, as there are many buyers in our local market who are anxious to buy, but not finding many properties that they would like to purchase.



Inventory Levels by Property Location City of Harrisonburg

Rockingham County

600

500

461 438

400

382

478

477 454 449 448

449 408 406 405

396

417

429 434 425 401

419

398

372

368 logo.indd 1

345

7/28/2008 3:10:30

321 281

300

200

160

169

181 185

198

189 190 186 188

163 170

152

100

136 134

153 152 148 150 148 141 134

112 106

92

87

-31% YOY

-36% YOY

0

Trends in inventory level currently seem to, in many ways, transcend the City / County divide, but when looking only at inventory levels in the City, we see that there has been a relatively sizable decline (-36%) over the last year in the number of properties for sale, while in the County, there has been a slightly smaller (-31%)

decline in the number of homes for sale. Despite relatively similar comparative changes in inventory levels in the City of Harrisonburg and Rockingham County over the past year, inventory levels in the County seem much more turbulent through the year than they are in the City.


[6] DAYS ON MARKET Harrisonburg & Rockingham County

Days on Market Analysis of Sold Properties Residential Listings Sold in the Past 12 Months

> 1 year, 50, 4%

Harrisonburg & Rockingham County

Days on Market Analysis of Active Listings Active Residential Listings

> 1 year, 39, 11% < 30 days, 55, 15%

6 - 12 months, 206, 16%

30 - 59 days, 24, 6% logo.indd 1

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< 30 days, 509, 39% 6 - 12 months, 102, 28%

3 - 6 months, 225, 17%

60 - 89 days, 39, 11%

60 - 89 days, 117, 9%

3 - 6 months, 105, 29% 30 - 59 days, 202, 15%

Median Days On Market: 48

Median Days On Market: 131

Declining inventory levels are contributing to an overall decline in the time it takes to sell a home in Harrisonburg and Rockingham County. The current median “Days on Market” is 48 days for homes that have sold in the past year. Remarkably, 39% of homes that have sold in the past year have gone under contract within 30 days

of having hit the market. Combine that with those that went under contract during the second month on the market, and you’ll find that 54% of homes that sell go under contract within 60 days. The graph to the right, above, shows the length of time that each active listing has been on the market for sale.


[7] MARKET SEGMENTS Harrisonburg & Rockingham County

Home Sales by Price Range (Average of Past 12 Months)

$0 - $200k

$200k - $300k

$300k - $400k

$400k +

70

60

52

52

53

53

52

54

54

55

54

54

54

54

55

54

55

56

58

58

57

59

59

58

60

60

60

+9% YOY

50 logo.indd 1

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40

30

20

21

22

23

23

24

24

25

25

25

27

27

27

27

27

27

27

28

28

28

29

29

30

30

31

+14% YOY

20 10.3 10.3 10.3 10.5 10.8 10.7 10

0

4.2

4.3

4.5

4.5

5.1

4.8

9.6

4.8

9.5

5.0

8.7

8.2

7.8

5.2

5.4

5.4

7.4 5.4

The pace of home sales in Harrisonburg and Rockingham County varies significantly based on price range. The graph above shows the average number of home sales per month (given a 12-month average) as we have passed through the past two years. Home sales have increased in all price ranges over the past year, with the

7.7

5.4

8.3

5.5

8.4

5.7

8.3

5.9

8.5

5.3

9.3

9.6

12.8 12.4 11.5 12.3 10.3 11.3

5.6

6.1

6.1

6.3

6.3

6.1

6.2

6.0

+62% YOY +11% YOY

most significant (drastic!) increase being in the $300K - $400K price range (+62% year-over-year) with the other three price ranges (under $200K, $200K - $300K, $400K+) each seeing between a 9% and 14% year-over-year increase.



Inventory Levels by Price Range $0 - $200k

$200k - $300k

$300k - $400k

$400k +

350

316

321 300 299 302

287

300

272

311 313 314 283

265

261 264

274 256

250

248 234

229

221 217 202

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200

172

171

177

190

182 178

157

155

190 173 172 168

174

182

172

182

100 58 50

57

70 53 52

63

83

68 67

73

80

83 80

84 71

79 73

80 75

73

157 154 153 156

64

65 55

69

48

66 56

76 64

176 143

78 73

75

80

69

72

75 73

190

166

150

88

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82 75

77 72

71 64

136

64

141 127

117

62

60

48

50

61

-46% YOY -24% YOY

+25% YOY -28% YOY

0

Inventory levels shift up and down seasonally, but we are also seeing differences in year-over-year trajectories in each of the four price ranges outlined above. The lowest price range (under $200K) has seen the largest decline (-46%) in inventory levels over the past year -- with buyers in that price range now only having 141

options as compared to 261 one year ago. The $200K - $300K price range has seen a 24% decline in inventory, which is relatively similar to the 28% decline seen in the $300K-$400K price range. The only price range where inventory levels has increased is the $400K+ price range where inventory levels have climbed 25% YOY.



Months of Housing Supply by Price Range $0 - $200k 18 17 16

14

15 14

14

17

$200k - $300k

$300k - $400k

17 15

14

$400k +

Entire Market: 3.4 Months of Housing Supply 368 Active Listings 12-Month Average of 109 Sales/Month

15

14

12

13

12

12

10

6

4

6

5

8

5

5

7

8

8

6

8

6

6

8 8

6

9 9

8

8

6

7

7

7 5

6

6

6 6

6 5

2

11

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9 9

7

7

5

9

9

12 11

10

8

13

13 12

8

14

10 8

9 8

6 6

5

6

5

8

7

8

7

6 5

8

4

4

+13% YOY

6

6

6 5

6 5

4

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10

7

6

5

10

4

4

3

4 5 3

4

3

4

4 2

-55% YOY -33% YOY -50% YOY

0

With so many home sales (lots of buyers) and so few homes on the market (not so many sellers), there are low levels of supply in some price ranges our local real estate market. The graph above illustrates that while it would take 10 months to sell all of the homes currently for sale over $400K if the same number of buyers

bought each month as have been buying (on average) over the past 12 months -- it would only take two months (!!) to burn through the under $200K inventory. Many consider a six month supply to be a balance between buyers and sellers, and we are now seeing less than that in three of the four price ranges illustrated above.


[8] LOTS AND LAND Harrisonburg & Rockingham County

Lot Sales & Median Prices less than 1 acre

$120,000

450

$99,900

408 400

$100,000

$76,500

350

$54,500

$59,650

$53,950

$54,900

$56,500

$54,500

$55,000

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$60,000

Stability

Declin

111

100

e

85

83

75 58

64

62

84

63

78

$27,000

$36,900

150

$32,208

200

$56,600

247

$54,500

250

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$42,000

261

$80,000

$59,900

304 300

64

$40,000

$20,000

50

0

3 2002

2003

2004

2005

2006

2007

2008

2009

After some modest recovery in the pace of sales of lots of less than an acre over the past few years, there were fewer of these sales in 2016 (64) as compared to 2015 (78) and 2014 (84). That slowing pace of lot sales did not stop sellers in 2015 from being able to obtain higher prices for their building lots with a median sales price

2010

2011

2012

2013

2014

2015

2016

2017

$0

of $59,650 -- but that median price then declined during 2016 to only $54,500. Despite the lack of increase in lot sales, we are seeing quite a bit of stability in the median sales price, which has bounced around between $54,000 and $60,000 since 2008 and continuing through 2016.



Price Distribution of Active Lot Inventory less than 1 acre

$100k + 19 listings 11%

$80k - $100k 29 listings 17%

$60k - $80k 38 listings 22%

$0 - $40k 34 listings 20%

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$40k - $60k 49 listings 29%

169 Active Lot Listings; Median List Price: $60,800

Despite the fact that only 64 lots (of less than an acre) sold in all of 2015, there are a remarkable 169 lots currently for sale. Some sanity exists in this listing market, however, as the median list price of lots for sale ($60,800) is not too much higher than the 2016 median sales price of $54,500. Given last year’s 64 lot sales, if no

other lots were listed for sale, it would take 2.6 years to sell all of the lots currently listed for sale. As you can see above, a significant portion of the lots currently listed for sale are priced above $60,000 --- thus many sellers have offering prices higher than recent (2011-2016) median sales prices.



Land Sales & Median Price Per Acre 1 acre or more

107

$12,500

$10,000

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$20,000

$15,171

$13,240

$14,981

$15,000

$15,964

$25,000

$9,932

$9,535

120

$8,333

140

$12,003

160

$15,000

$17,713

168

$13,957

180

$30,000

$20,833

$24,184

200

$15,000

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$10,000

100

87 77

76

80

$5,000

83 70 57

60

51

44 40

66

73 $0

58 49

-$5,000

28 -$10,000

20

7 0

2002

2003

2004

2005

2006

2007

2008

2009

Parcels of land larger than one acre in Harrisonburg or Rockingham County increased in pace during 2016 to 73 land sales -- marking the highest year of sales since 2007. That said, during that same timeframe, the median price per acre has fallen from $24,184 (in 2007) down to $10,000 (in 2016). Some aspects of this “median price

2010

2011

2012

2013

2014

2015

2016

2017

-$15,000

per acre” calculation are affected by which parcels actually sell in a given year, but it is clear that land prices have been trending slowly down over the past five or so years. We will likely need to see more buyer activity (demand) before we will see any meaningful increases in the median price per acre.



Price/Acre Distribution of Active Land Inventory 1 acre or more

$75k - $100k 4 listings 3%

$100k + 12 listings 8% $0 - $10k 48 listings 32%

$50k - $75k 10 listings 7%

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$30k - $50k 21 listings 14%

$20k - $30k 16 listings 11%

$10k - $20k 40 listings 26%

163 Active Land Listing; Median List Price: $19,172 / Acre

Despite the fact that only 73 parcels of land (of one acre or more) sold in all of 2016, there are a remarkable 163 parcels of land currently for sale. Furthermore, despite the fact that the median sales price of land is hovering around $10,000 per acre, the median list price of the 163 parcels for sale is currently $19,172 per acre. Given

last year’s 73 land sales, if no other land is listed for sale, it would take 2.2 years to sell all of the parcels of land currently listed for sale. As you can see above, the vast majority of land listed for sale is listed at median prices per acre well above the median sales price per acre.


[9] ECONOMIC INDICATORS Harrisonburg & Rockingham County

Home Sales vs. Trustee Sales Home Sales per HRAR MLS

Recorded Trustee Deeds

1,800 1,669 1,600

1,507 1,438

1,400

1,324

1,309

1,248 1,200 1,153 1,085

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1,122

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1,013

1,000

936 864

816

794

758

800

600

400 270 200 63 0

2002

75

2003

70 2004

86

2005

93

2006

97

2007

177

118

2008

223

252

222

163

139

136 65

2009

The graph above is a comparison of two imprecise measures -- but the comparison can still be helpful. The blue bars show the number of home sales recorded in the HRAR MLS -- this does not include private sales that did not involve a Realtor, nor new home sales directly from a builder. The red bars show the number of recorded

2010

2011

2012

2013

2014

2015

2016

13

2017

Trustee Deeds. Some foreclosed properties then show up again as REO properties. The foreclosure rate in our local market area is definitely trending downward, as there were 6.7 times as many home sales as foreclosures in 2014, 8.1 times as many home sales as foreclosures in 2015 and 9.6 times as many in 2016.


[9] ECONOMIC INDICATORS Average 30-Year Fixed Mortgage Interest Rate Source: Freddie Mac

6.00%

3.00% Jan-14

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Jan-15

4.19%

4.32%

4.03% 3.47%

3.42%

3.50%

3.43%

3.48%

3.48%

3.64%

3.71%

3.66%

3.62%

3.79%

4.01%

3.95%

3.76%

3.86%

3.84%

4.02%

3.98%

3.87%

3.68%

3.69%

3.80%

3.66%

4.00%

3.87%

3.98%

3.97%

4.20%

4.10%

4.12%

4.14%

4.12%

4.33%

4.40%

4.50%

4.37%

5.00%

4.32%

5.50%

Jan-16

Jan-17

7/28/2008 3:10:30

Harrisonburg-Rockingham MSA

Dec-14

As shown in the top graph above, for most of the past two years, home buyers have seen tremendously low interest rates -- almost always under 4%. With average mortgage rates now starting to increase, it seems unlikely (though not impossible) that we will see rates in the 3.X% range again anytime soon. The second graph

Dec-15

3.6%

3.8%

4.2%

4.0%

4.2%

4.4%

4.4% 3.2%

3.8%

4.1%

4.3%

3.50% 3.00% Dec-13

4.0%

3.9%

4.1%

4.0%

4.4%

5.0%

3.9%

4.00%

5.5%

5.4% 4.4%

5.0%

5.1%

4.8%

4.4%

4.8% 4.1%

5.0%

5.5%

Not Seasonally Adjusted

5.5%

5.6%

5.2% 4.1%

4.50%

4.9%

5.00%

4.4%

5.50%

4.7%

6.00%

5.3%

Unemployment Rate

Dec-16

above illustrates trends in the local unemployment rate -- which has shown a general downward trend over the past several years. A low local unemployment rate and relatively low mortgage interest rates continue to help our local housing market remain stable and start to grow in recent years.


[10] MEET THE ANALYST / REALTOR Scott P. Rogers, Associate Broker

Scott earned a B.A. (2000) and M.Ed. (2002) from James Madison University, providing him formal education in graphic design, management and counseling -- all of which he leverages on a daily basis to the benefit of his clients. Scott’s graphic design and web development background allows him to create and utilize high caliber technology and marketing solutions for his clients. Scott incorporates many innovative tools and technologies to serve his clients including: professional photography equipment, elevated photography equipment, property websites for each of his listings and Matterport 3D Showcase. He leads the local market in the adoption of new marketing techniques - for the latest, check out WalkThroughThisHome.com. In 2007, Scott began providing in-depth analysis and commentary on the local real estate market via his real estate blog, HarrisonburgHousingToday.com. Since that time, he created many other valuable online resources for the local community such as HarrisonburgHousingMarket.com, HarrisonburgInvestmentProperties.com, HarrisonburgApps.com, HarrisonburgAssessments.com, HarrisonburgPropertyTransfers.com, HarrisonburgTownhouses.com, BestDealsInHarrisonburg.com and many others. Scott is a member of the Shenandoah Valley Builders Association, serves on the Board of Directors for the Shenandoah Valley Children’s Choir and East Rockingham Recreation Association, and is the co-founder of TakeThemAMeal.com. Scott and his wife, Shaena, live in Rockingham County with their two children, Luke and Emily. In his free time, Scott enjoys spending time with his family, traveling, camping, playing volleyball and attending JMU sporting events.

Questions? Contact Scott anytime.... SCOTT P. ROGERS, Associate Broker 540-578-0102 (mobile) [email protected]

Everything You Need To Know About the Home Buying Process BuyingAHomeInHarrisonburg.com

Local Online Real Estate Resources

Scott P. Rogers, an Associate Broker with Funkhouser Real Estate Group, began his real estate career in 2003 and has been working hard ever since to provide exceptional service to his buyer and seller clients in Harrisonburg and Rockingham County. Scott provides detailed, professional and responsive service to all of his clients, whether they are buying their first home or have been through many housing transitions. Since 2010, Scott has been recognized each year by the Harrisonburg/ Rockingham Association of Realtors as being in the top 1% of all area Realtors.

Marketing Strategies for Successing Selling Your Home SellingAHomeInHarrisonburg.com Central Shenandoah Valley Property Search ScottPRogers.com Mobile Real Estate Apps HarrisonburgApps.com Monthly Real Estate Market Reports HarrisonburgHousingMarket.com Ongoing Housing Market Analysis & Commentary HarrisonburgHousingToday.com

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Analysis of Real Estate Investment Options in Harrisonburg HarrisonburgInvestmentProperties.com Comprehensive Data on Harrisonburg Townhouse Communities HarrisonburgTownhouses.com The Most Realistic, Immersive Way to Experience a Home Online WalkThroughThisHome.com Analysis of Property Assessments HarrisonburgAssessments.com Listings With Low List Prices Compared to Assessed Values BestDealsInHarrisonburg.com New Construction Homes For Sale HarrisonburgNewHomes.com Half Million (plus) Homes in Harrisonburg, Rockingham County HarrisonburgLuxuryHomes.com Most Recent Listings in Harrisonburg, Rockingham County NewListingsInHarrisonburg.com Trustee Sales in Harrisonburg & Rockingham County HarrisonburgForeclosures.com Property Transfers in Harrisonburg & Rockingham County HarrisonburgPropertyTransfers.com


7/28/2008 3:10:30