Harrisonburg & Rockingham County Real Estate Market Report ...

NOVEMBER 2015 Harrisonburg & Rockingham County Real Estate Market Report An analysis of real estate activity through October 31, 2015 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

November 10, 2015

2012

2013

2014

2015

% Change ('14 - '15)

October

79

93

112

104

-7.14%

Year-To-Date (Jan-Oct)

743

910

914

960

5.03%

Median Sales Price

2012

2013

2014

2015

% Change ('14 - '15)

October

$171,667

$145,000

$189,950

$182,750

-3.79%


$175,000

$175,000

$178,500

$186,000

4.20%

Average Sales Price

2012

2013

2014

2015

% Change ('14 - '15)

October

$207,720

$172,040

$205,586

$205,573

-0.01%


$195,738

$198,429

$200,898

$208,919

3.99%

2012

2013

2014

2015

% Change ('14 - '15)

October

89

73

64

63

-1.56%


90

67

65

56

-13.85%

Median Days on Market

Home sales in October 2015 slowed down a bit (-7%) compared to last October -but set a relatively fast pace for October compared to 2012 and 2013. Despite the slightly slower sales in October, the total number of home sales in 2015 is still 5% higher during the first ten months of the year than the number of home sales seen

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in the first ten months of last year. Furthermore, median sales prices are a good bit above (+4%) last year -- and average sales prices (+4%) have also increased yearover-year. Finally, it is taking 14% less time to sell a home this year (median of 56 days) as compared to last year when the median was 65 days on the market.

Published on November 10, 2015 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 01/01/2000 - 10/31/2015.

[1] MARKET SUMMARY

HOME SALES REPORT :: BY AREA City of Harrisonburg

Rockingham County

# Home Sales

2014

2015

% Change

2014

2015

% Change

October

39

34

-12.82%

73

70

-4.11%

Year-To-Date

302

315

4.30%

612

645

5.39%

. Rockingham County

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City of Harrisonburg

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Median Sales Price

2014

2015

% Change

2014

2015

% Change

October

$170,000

$168,000

-1.18%

$204,000

$191,000

-6.37%

Year-To-Date

$170,000

$166,000

-2.35%

$185,000

$195,000

5.41%

City of Harrisonburg

Rockingham County

Median Days on Market

2014

2015

% Change

2014

2015

% Change

October

66

57

-13.64%

62

63

1.61%

Year-To-Date

57

53

-7.02%

71

59

-16.90%

As is consistently the trend, the majority of the home sales are in Rockingham County. That said, when looking at 2015 YTD, we are seeing an increase in both Rockingham County home sales (+5.39%) and City of Harrisonburg home sales (+4.3%). Prices, however, are increasing in the County (+5.41%) while they are declining slightly in

the City (-2.35%). Finally, homes are selling slightly more quickly in the City (53 days) than in the County (59 days), though both of those metrics are falling. The County wins the “most improved locality” award, with a larger improvement in pace and price of sales, as well as time on the market.


[2] RECENT TRENDS Harrisonburg & Rockingham County

Month-By-Month Home Sales History 150

2012 2013 2014

134

130

125

Single Family, Townhome & Condo Sales

118 110

110

107

104 92

90

81

72 68

70

56

50

104

49 49

72 71 67

111

108

100

97

2015

126 116 111 106

95

104 97 logo.indd 1

92 83

80

74

112

93

96

97

93

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79

72

68

64

58

61

October 2015 104 Home Sales

53

46

41 30

10 JAN

FEB

MAR

APR

MAY

JUN

Monthly home sales have been anything but predictable in 2015, with many summer months (May, June, August) showing stronger sales than any other similar month in recent years -- and with a new all time monthly high (134 sales) in June 2015. That said, the past two months (September and October) have shown slower

JUL

AUG

SEP

OCT

NOV

DEC

monthly sales as compared to the same months in 2014. November will be a telling month as to how the entire year will fill out, as home sales plummeted in November during 2013 and 2014. Certainly, we will somehow see more than 68 home sales in November, right??



Monthly Cumulative Residential Sales 1100 1000 900

910

800

817

700 600 500 400 300 200 100 0

668 615 557 493 438 313 239

685 623 542

743 664 592

734 618

497

500

383

400

400

299

308

462

226

228

152 102 47

146 79 40

154 87 41

2010

2011

2012

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 is evident, there have been more home sales in the first ten months of 2015 than in the first ten months of any other year in the previous five years. The largest year-

296 192

920

960 856

SEP AUG JUL

808 759 697

JUN

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633 591 466 355 248

525 391

MAY APR MAR FEB JAN

281 189 117

49

167 109 56

2013

2014

2015

121

OCT

49

over-year recovery seems to have occured between 2012 and 2013 -- but we are certainly seeing a larger increase in home sales this year (2014 to 2015) than we saw last year (2013 to 2014). At this pace of sales, we will clearly see another year of 1,000+ home sales in Harrisonburg and Rockingham County.



Time-Adjusted Home Sales Trends :: All Homes # Home Sales, Median Sales Price in each 12 Month Period

$200,000 $186,000

$185,000

$185,000

$185,000

$185,000

$185,000

$180,000

$179,000

$179,900

$179,700

$178,000

$176,500

$177,000

$174,700

$174,321

$173,000

$175,000

$174,900

$176,500

$175,000

$175,000

$175,000

$175,000

$175,200

$174,800

$175,000

$175,000

$175,000

$175,000

$172,700

$172,100

$175,000

$172,375

$172,375

$172,000

$171,708

2,000

$173,000

2,500

$190,000

$180,000

$170,000

Relatively Stable Annualized Median Sales Price

1,133

1,125

1,147

1,144

1,127

1,121

1,118

1,107

$160,000

1,093

1,078

1,081

1,077

1,058

1,030

1,040

1,033

1,022

1,042

1,019

1,074

1,055

1,067

1,067

1,035

1,053

1,042

1,021

1,000

992

968

938

934

908

900

924

890

1,000

1,085

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1,500

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$150,000

$140,000

$130,000

$120,000

500

$110,000

0 Oct-12

Oct-13

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

Oct-14

$100,000 Oct-15

the past eighteen months we have seen relatively consistent increases in the annual pace of home sales, which has now risen to 1,125 sales/year. And after many years of median sales prices hovering between $173K and $175K, we have seen steady increases in median pices over the past 12 months up to their current $185,000.


[3] LONG TERM TRENDS Harrisonburg & Rockingham County

Home Sales & Price Trends Single Family Homes & Townhomes

$250,000

1,800

+8%

+14%

1,153

1,071 +29%

600

n/a

+4%

$127,700

+6%

$122,900

$116,000

800

$122,588

+17%

829

$149,000

1,000

+14%

$169,900

1,200

-3%

1,248

-6%

+1%

+2%

-23%

+2%

1,067

+2%

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1,085

+19%

967 -10%

870 -8%

799

+4%

832

+8%

$186,000

-13%

$178,000

-5%

$175,000

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%

$200,000

$150,000

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960

900

$100,000

400

$50,000

200

$0

0 2000

2001

2002

2003

2004

2005

2006

2007

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 (2014) marks the fourth (!) year in a row when we have seen an increase

2008

2009

2010

2011

2012

2013

2014

2015

(+2%) in the pace of sales in our local market, which was also accompanied by a 2% increase in the median sales price. We have now seen increases in the median sales price for three years in a row, though they have been small (+1%, +2%, +2%) increases thus far.



Home Sales & Price Trends Single Family Homes

1,400

1,000

+16%

+16%

$147,000

+8%

+2%

+8%

$136,000

$122,850

674 600

851

880

+29%

$133,239

800

-2%

+3%

-1%

$200,000

-2%

$190,000

+6%

$192,000

-6%

909

$225,000

$175,000 -12%

$170,000

868

-11% +24%

-4%

$195,000

1,024 n/a 1,025

$184,000

-6%

+8%

$195,000

-4%

$203,000

-1%

$215,000

$223,575

1,200

$226,800

$210,000

$275,000

813

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798

+1%

819

+21%

-15%

678 -11%

602

-1%

595

+10%

653

+3%

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707

672

$125,000

$75,000 400

$25,000

200

0

-$25,000 2000

2001

2002

2003

2004

2005

2006

2007

The single family home market in Harrisonburg and Rockingham County told two two different stories last year, depending on whether we were evaluating the price or pace of home sales. This past year (2014) marked the fourth year of an increasing pace of home sales with a 1% year-over-year increase to a pace of 819 home sales

2008

2009

2010

2011

2012

2013

2014

2015

during the year. Over the past year, however, the median sales price of single family homes dropped an additional 1% to $190,000 -- which follows the previous year’s 2% decline as compared to 2012 levels. Thus far in 2015 we seem to be headed in a better direction, given the YTD median sales price of $200,000.



Home Sales & Price Trends Duplexes, Townhomes & Condos

-9%

529

$103,100

444

+47%

302

300

+14%

$118,500

+9%

+5%

+3%

$160,000

$140,000

450 $120,000

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-36%

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$100,000

289 -7%

268

+49%

228

-24%

204

203

200

-6%

-15%

+10%

$108,200

+6%

$94,600

+9%

$89,000

400

483

$134,950

500

+11%

$151,500

-3%

$151,750

+19%

$137,250

-4%

$132,750

$166,635

+2%

$140,500

+33%

+2%

$180,000

$154,250

-18%

$159,545

600

$163,800

644

$160,850

700

+31%

-12%

+11%

254

+5%

266

253

$80,000

$60,000

+27%

179

155 $40,000 100 $20,000

0

$0 2000

2001

2002

2003

2004

2005

2006

2007

After six years of rapid declines in the pace of townhouse sales in Harrisonburg and Rockingham County, the pace of sales finally rebounded in 2012 with a 27% increase in the pace of sales. This increase continued in 2013, with an 11% increase in the pace of sales, which was accompanied by a 3% increase in the median sales price

2008

2009

2010

2011

2012

2013

2014

2015

of these properties. This past year (2014) marked an additional increase (+5%) in the pace of these sales (duplexes, townhomes, condos) and an even larger increase (+11%) in the median price of these sales. Thus far in 2015, the median sales price of duplexes, townhomes and condos has remained relatively stable.



Market Balance between Buyers and Sellers 1000 900

884 883 880 881 883 889 893 899 906 915 921 927 932 932 931 929 924 913 904 893 881 870 860 849 839 831 822 813 801 791 780 770 757 744 730 718 705 694 686 679 674 664 656 646 641 637 635 632 631 628 624 622 617 618 622 625 628 630 631 633 633 635 635 634 633 631 627 625 622 616 612 607 608

Assuming Six Months of Housing Supply is a Balanced Market

SELLERS

800 700

Huge Over Supply = Buyer's Market

600

400 300

7/28/2008 3:10:30

Approaching a Balanced Market 388 409 409 413 413 409 425 423 438 417 410 401 394 381 379 376 368 374 372 370 352 365 373 386 389 389 397 397 401 403 401 406 407 416 422 416 425 444 432 436 447 447 462 472 477 486 496 503 509 492 507 510 502 496 482 484 491 495 491 504 515 518 521 518 527 535 543 547 560 554 565 560 558

500

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BUYERS

200 100

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 many sellers are in the market

Oct-15

Aug-15

Jun-15

Apr-15

Feb-15

Dec-14

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Oct-13

Aug-13

Jun-13

Apr-13

Feb-13

Dec-12

Oct-12

Aug-12

Jun-12

Apr-12

Feb-12

Dec-11

Oct-11

Aug-11

Jun-11

Apr-11

Feb-11

Dec-10

Oct-10

Aug-10

Jun-10

Apr-10

Feb-10

Dec-09

Oct-09

0

(active listings) at any given time. As you can see, our market had an extreme imbalance several years ago, with more sellers in the market than were needed based on the buyers in the market. Over the past four years we have been seeing a steady increase in buyers in the market and a decline in sellers in the market.



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

Price/SF $350,000

140

$129

$127

$300,000

$117

$116

120

$101

$87 $73

$76

$227K $224K

$81

Median Price Per SF

$113

$97

100

80

$127

$210K

$103

$123K

$133K $136K

$109

$106

$250,000

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$215K $203K

$200,000

$195K

$184K

$195K $192K $190K

$170K 60

$105

$200K

Median Sales Price

$150,000

$147K $100,000

40

$50,000

20

$0

0 2000

2001

2002

2003

2004

2005

2006

2007

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

2008

2009

2010

2011

2012

2013

2014

2015

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. When focusing in on 2013 and 2014 data, we can see that the median sales price was started to shift downward, though the price per square foot was increasing.



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

$140

$138

130

$127 $123

120

$123

$123 $117

$122 $119

$122

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$121

$117

$115

$114

$111

$111

$108

110

$104 $105

100

$106

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$105

$107 $104

$101 $103 $96

$97

$101

$98

90

80 2006

2007

2008

2009

2010

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 2015 figures, this graph illustrates that the median price per square foot of larger homes

2011

2012

2013

2014

2015

(2500+ SF) is a good bit lower ($101/SF) than homes with less than 1500 SF ($122/ 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.



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

2,000

1,750

97.4%

97.7%

97.8%

98.1%

99.1%

99.1%

98.9%

98.0%

98.0%

1,669

100.0%

97.0%

96.0%

96.0%

96.0%

97.0%

97.0%

97.0% 95.0%

1,507

1,500

1,438 1,324 1,248

1,250

1,153

90.0%

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1,071

1,067 967

1,000

1,085 960

900

870

829

799

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85.0%

832

750 80.0% 500 75.0%

250

0

70.0% 2000

2001

2002

2003

2004

2005

2006

2007

This graph shows the average list price to sales price ratio (red line) over the past 12+ years as compared to the overall pace of home sales. At the peak of the housing boom (2004-2006) sellers were able to obtain an average of 99% of their asking price --- up from an average of 97.4% in 2000 before home sales started

2008

2009

2010

2011

2012

2013

2014

2015

escalating. Of note, last year we almost returned to that pre-boom level -- given the 97% average during 2014 compared to the 97% - 98% average in 2000 - 2002. As the market continues to recover, we may see this ratio increase a bit more.



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

200

186 200

180

$105

$139

$136

$129

$128

$129 logo.indd 1

150

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109

$114

$133 $87

80

$99

89 $94

100

$130

121

120

$146

139

$137

140

137

$150

138

140

$144

158

160

100

84

60

41

40

45

51

50

47

50

38

20

0

0 2000

2001

2002

2003

2004

2005

2006

2007

New home builders experienced a slight increase in the pace of new home sales between 2010 and 2012 -- after steady declines since 2005. These increases (41 to 45 to 51) in sales pace, however, still leave plenty of room for improvement. The number of new (single family) home sales declined again in 2013 to 47 sales, and

2008

2009

2010

2011

2012

2013

2014

2015

declined again in 2014 to 38 sales. The median price per square foot, however, now seems to have stabilized around $130/SF in 2013, increased in 2014 to $136/SF, and seems to be headed even higher in 2015. Given the 50 sales thus far in 2015, we are starting to see some recovery in new construction this year.


[4] BUYER ACTIVITY Harrisonburg & Rockingham County

Buyers Per Month Commiting to Buy Properties 160 145

143 140

135 126

123 114 116

120

107 100

96

93

90

107

103 96

91

109 102

108

98

94

91

118

114

86

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76

80

77

75

70

69

68

58

60

118

112

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82

76 63

56

40

20

Annual Pace: 1,199 contracts



The pace at which buyers are signing contracts to buy real estate is often an excellent indicator of the future sales performance of our local market. This year has been quite promising during many months of 2015, with strong increases in year-overyear buyer activity in the first four months of 2015. That trend of year-over-year

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

Mar-15

Feb-15

Jan-15

Dec-14

Oct-14

Nov-14

Sep-14

Aug-14

Jul-14

Jun-14

May-14

Apr-14

Mar-14

Feb-14

Jan-14

Dec-13

Nov-13

Oct-13

Sep-13

Aug-13

Jul-13

Jun-13

May-13

Apr-13

Mar-13

Feb-13

Jan-13

Dec-12

Nov-12

Oct-12

0

increases has not continued through the remainder of 2015, and we are seeing a slower pace of signed contracts (1,175 in the past 12 months) now than we were seeing a year ago (1,199 in the previous 12 months) despite year-over-year increases in sales. This likely means that more contracts are making it successfully to closing.


[5] INVENTORY LEVELS Harrisonburg & Rockingham County

Inventory Levels (end of month)

800

675 679

700

705

692 688 636

635 600

693

608

584 529

555 550

623

604

659 653 644 635 636 640

577 538 542 541

500 logo.indd 1

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400

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 combined effect of many homeowners deciding to list their home for sale -- which be a big, significant,

weighty 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 relatively stable over the past year, with a tiny 1% year over year increase.



Inventory Levels by Property Type Single Family Homes

Townhomes, Duplexes, Condos

600

260

520 500

529

549

539 535 527 501

490

478

460

451 402

423

477

240

445

440

412 382

400

487 481 485 493

391

220

405 381 logo.indd 1

7/28/2008 3:10:30

200 300

178

182 180

172 166

200

155 148

145

157

161

150 144

138

100

133 127

132

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). Of interest, the number of single family homes for sale has increased slightly by 3% from this same time of year last year -- while the number of townhouses,

166

164 158

156

160 151

157

154

151

160

147 140

120

duplexes and condos on the market for sale has decreased by 7%. As is evident, inventory levels are now starting to decline as we enter into the Fall market -- and we will likely see further decreases over the next few months, particularly in single family home inventory.



Inventory Levels by Property Location City of Harrisonburg

Rockingham County

600

483 488 480 481 474 479

500

441 400

367

438

432

423

407

461

454

388 382

383 384

478

477 454 449 448

+5% YOY

396 372 logo.indd 1

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300

200

194

177

172 166 162

185

201 200

210 217 212 207 182

172 150

160

169

181 185

198

189 190 186 188 163

-10% YOY 100

0

Trends in inventory level currently seem to, for the most part, transcend the City / County divide. When looking only at inventory levels in the City, we see that there has been a moderate decline (-10%) over the last year in the number of properties for sale. In the County, however, ther has been a slight increase (+5%) in the number

of homes for sale. Despite relatively small 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 than 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

Harrisonburg & Rockingham County

Days on Market Analysis of Active Listings Active Residential Listings

> 1 year, 81, 7% > 1 year, 77, 12% < 30 days, 123, 19% 6 - 12 months, 141, 13% 6 - 12 months, 104, 16% < 30 days, 407, 36%

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30 - 59 days, 85, 14%

3 - 6 months, 214, 19%

60 - 89 days, 72, 11% 3 - 6 months, 179, 28% 60 - 89 days, 113, 10%

30 - 59 days, 168, 15%

Median Days On Market: 58

Median Days On Market: 109

Despite high inventory levels, and low numbers of buyers in the market, the homes that are actually selling are selling rather quickly. In fact, approximately 1 out of 3 homes (36%) that sells goes under contract less than 30 days after being listed for sale. Include with that those that go under contract in the next 60 days (15%) and

we find that more than half of homes (51%) that sell go under contract within the first 60 days of first coming on the market. This is not, however accounting for the many homes that never sell -- that linger on the market, or are eventually taken off the market.


[7] MARKET SEGMENTS Harrisonburg & Rockingham County

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

$0 - $200k

$200k - $300k

$300k - $400k

$400k +

60

52 49

50

51

51

51

50

48

48

49

50

50

51

52

52

53

52

52

53

53

52

54

54

55

54

54

+5% YOY

40 logo.indd 1

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30

22

22

23

23

22

22

22

22

21

21

21

20

21

21

20

9.8

9.8

9.8

20

21

22

23

23

24

24

25

25

25

9.6

9.5

8.7

8.2

+20% YOY

20

10

0

6.7

6.8

6.8

6.7

6.4

6.7

6.5

7.0

4.2

4.1

4.3

4.3

4.4

4.1

4.1

3.8

7.3

7.9

8.0

4.0

3.8

3.7

9.3

3.3

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 two years, except

3.3

3.7

3.9

10.3 10.3 10.3 10.5 10.8 10.7

4.2

4.3

4.5

4.5

5.1

4.8

4.8

5.0

5.2

5.4

-16% YOY +62% YOY

for in the $300K - $400K price range, were we have seen a 16% decline in home sales. The most significant increase seen over the past 12 months has been in the $400K+ price range, where we have seen a 62% increase in home sales.



Inventory Levels by Price Range $0 - $200k

$200k - $300k

$300k - $400k

$400k +

350

317 300

308 287

285

274

301

309

321

312

319

316 294 290

285

321 300 299 302

287

311 313

-6% YOY

269 272 265

253 250

200

172

169 155

50

79 70

77

188

77

60

7/28/2008 3:10:30

190

180

172

171

177

182 178

173 172

157

-9% YOY

134 135

75

59

105

102

87 74 81

67

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158 155

107 100

201 203

155 139

150

180

190 192

67

88

93

92

97 95

90

89

83

89 77

71

88 71 57 63

54

58 57

70

68

63

67

53 52

73

83

83

80

80

84

71

79

80

73

75

+13% YOY -10% 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 a relatively small downward adjustment (-6%) in inventory levels over the past year, while the highest price range ($400K+)

has actually seen a slight increase (+13%) in the number of homes for sale. All four price ranges are likely to see inventory levels continue to decline over the next few months as we move into and through the Fall market.



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

$200k - $300k

$300k - $400k

$400k +

30

25

25

25

24

23

24

22 20

20 17

15

12

11

14

14

11

11

15 13

6

7

6

6

5

14

6

6

6

5

6

17 14

11

7

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8

8

9

9 10

6

6

6

6

15

17

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17 15

14

15

-31% YOY

12

10

9

9

10 9

6

14

14

12

12

10

8

17

16

16

15

5

21

6

7

6

6

8

8

8

6

6

5

7

5

5

5

5

7

9

8

8

8

6

8

8

8

7

6

6

6

6

5

8

7

9

7

7

6

6

+8% YOY -23% YOY +1% YOY

0

With so many homes on the market (lots of sellers) and so few home sales (not so many buyers), there are very high levels of supply in most price ranges our local real estate market. The graph above illustrates that it would take 15 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. Many experts consider a six month supply to be a balance between buyers and sellers, and in the past 12 months we have only consistently seen that balance in the under $200K price range.


[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

$36,900

$30,500

$26,000

165

$32,208

$58,900

$53,950

$54,900

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$56,500

$54,500

$56,600

$55,000

201

200

150

247

$54,500

250

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$42,000

261

$80,000

$59,900

304 300

Stability 111

100

85

$40,000

Growth

83

75 58

64

62

63

2010

2011

2012

$60,000

84

71

$20,000

50

0

$0 2000

2001

2002

2003

2004

2005

2006

2007

While the pace of sales of lots that are smaller than an acre have plummeted since 2004 (-85% between 2004 and 2010), they may finally be increasing again, as we have seen approximately 80 sales per year for the past two years, after four years in a row of approximately 60 lot sales per year. The median sales price of these

2008

2009

2013

2014

2015

lots under one acre also appears to be stabilizing between $55,000 and $60,000. If these trends continue, we may see as many as 85 lot sales in 2015, and we may start to see the median price of lots increase again, perhaps approaching $60,000 this year.



Price Distribution of Active Lot Inventory less than 1 acre

$100k + 11 listings 7% $80k - $100k 19 listings 12%

$0 - $40k 32 listings 20%

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$60k - $80k 38 listings 24% $40k - $60k 58 listings 37%

158 Active Lot Listings; Median List Price: $54,925

Despite the fact that only 84 lots (of less than an acre) sold in all of 2014, there are a remarkable 158 lots currently for sale. Some sanity exists in this listing market, however, as the median list price of lots for sale ($54,925) is relatively close to the 2014 median sales price of $53,950. Given last year’s 84 lot sales, if no other lots

were listed for sale, it would take 1.9 years to sell all of the lots currently listed for sale. As you can see above, more than nearly one half of the lots currently listed for sale are priced above $60,000 --- thus many sellers have offering prices higher than recent (2011-2014) median sales prices.



Land Sales & Median Price Per Acre 1 acre or more

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107

$14,267

$13,240

$14,981

$15,000

$15,964

$25,000

$9,932

$9,535

$8,333

$8,245

120

$8,234

140

$12,003

160

$15,000

$17,713

168

$13,957

180

$30,000

$20,833

$24,184

200

$20,000

$15,000

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$10,000

100

87 80

60

77

76

$5,000

83 70

58

57

51

44

42 40

58 49

56

$0

-$5,000

28 -$10,000

20

-$15,000

0 2000

2001

2002

2003

2004

2005

2006

2007

Parcels of land larger than one acre in Harrisonburg or Rockingham County peaked in 2013 at 70 sales, and then declined again 2014 to only 58 sales. The median price per acre of these lots with over 1 acre continued to fall in 2014, to a price of $9,932 per acre. This is far (far!) below the peak of $24,184 per acre that was seen back

2008

2009

2010

2011

2012

2013

2014

2015

in 2007. Looking at 2015, it seems that we are likely to see approximately 60 sales of this property type this year, and the median sales price per acre seems poised to increase this year as compared to 2014 -- and may bounce back up to 2009-2012 levels of median price per acre.



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

$100k + 18 listings 9% $50k - $100k 18 listings 9% $40k - $50k 10 listings 5%

$0 - $10k 46 listings 24%

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$30k - $40k 18 listings 9%

$20k - $30k 34 listings 18%

$10k - $20k 50 listings 26%

194 Active Land Listing; Median List Price: $20,232 / Acre

Despite the fact that only 58 parcels of land (of one acre or more) sold in all of 2014, there are a remarkable 194 parcels of land currently for sale. Furthermore, despite the fact that the median sales price of land is hovering around $10,000 - $12,000 per acre, the median list price of the 194 parcels for sale is currently $20,232 per

acre. Given last year’s 58 land sales, if no other land is listed for sale, it would take 3.3 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 1,248

1,200

1,153 1,071

1,085

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1,013

1,000

960

936 829

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864

816

794

758

800

600

400 270 200 56

91

63

75

70

86

97

93

118

177

223

252

222

163

123

0 2000

2001

2002

2003

2004

2005

2006

2007

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 (without a Realtor), nor new home sales directly from a builder. The red bars show the number of Trustee Deeds.

2008

2009

2010

2011

2012

2013

2014

2015

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 4.6 times as many home sales as foreclosures during 2013 and 6.7 times as many home sales as foreclosures in 2014.


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

6.00%

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Oct-13

Oct-14

3.76%

3.86%

3.84%

3.98%

4.02%

3.87%

3.68%

3.69%

3.80%

3.87%

3.97%

3.98%

4.20%

4.10%

4.12%

4.14%

4.12%

4.40%

4.33%

4.37%

4.32%

4.48%

4.29%

4.10%

4.32%

4.51%

3.00% Oct-12

3.66%

3.40%

3.57%

3.51%

3.53%

3.35%

3.50%

3.32%

4.00%

3.41%

4.50%

3.81%

5.00%

4.31%

4.46%

5.50%

Oct-15

7/28/2008 3:10:30

Harrisonburg-Rockingham MSA

4.0%

4.4%

5.5%

5.0%

5.4%

5.0%

5.1%

4.8%

4.4%

4.1%

4.4%

4.8%

5.0%

5.5%

5.5%

5.3% 4.1%

5.2%

4.9%

4.7%

4.4%

4.7%

5.3%

5.0%

5.3%

4.50%

5.6%

Not Seasonally Adjusted

5.9%

6.1%

5.7% 4.6%

5.6%

5.4%

4.9%

5.00%

5.1%

5.50%

5.2%

6.00%

5.3%

6.50%

5.5%

Unemployment Rate

4.00% 3.50% 3.00% Sep-12

Sep-13

As shown in the top graph above, home buyers have seen steadily (though slowly) declining mortgage interest rates over the past two years despite some increases over the past seven months. The current average rate of 3.76% is among the lowest rates we have seen in the past several years. The second graph above illustrates

Sep-14

Sep-15

trends in the local unemployment rate -- which has shown a general downward trend over the past four years, declining from 5.5% (in 2012) to 4% (in 2015). A low local unemployment rate and low mortgage interest rates continue to help our local housing market remain stable.


[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 Explore More Discovery Museum, 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