Harrisonburg & Rockingham County Real Estate Market Report ...

JANUARY 2017 Harrisonburg & Rockingham County Real Estate Market Report An analysis of real estate activity through December 31, 2016 provided courtesy of Scott P. Rogers, Funkhouser Real Estate Group

Extensively Renovated, Expansive (5 - 6 Bedroom) Home on 1.54 Acres . . . . . . . . . . . . . . . . 5448JesseBennettWay.com

[1] MARKET SUMMARY

HOME SALES REPORT Harrisonburg & Rockingham County # Home Sales

January 11, 2017

2013

2014

2015

2016

% Change ('15 - '16)

94

96

84

94

11.90%

Year-To-Date (Jan-Dec)

1,067

1,081

1,126

1,309

16.25%

Last 12 Months (Jan-Dec)

1,067

1,081

1,126

1,309

16.25%

December

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Median Sales Price

7/28/2008 3:10:30

2013

2014

2015

2016

% Change ('15 - '16)

December

$169,500

$178,250

$178,000

$199,900

12.30%


$175,000

$178,000

$185,000

$192,500

4.05%


$175,000

$178,000

$185,000

$192,500

4.05%

2013

2014

2015

2016

% Change ('15 - '16)

December

41

65

46

65

41.30%


66

66

54

52

-3.70%


66

66

54

52

-3.70%

Median Days on Market

Home sales increased 12% in December 2016 to add to the overall excitement of the year and we now, finally have a full year of data to work with -- and my oh my, what a year it was in the Harrisonburg and Rockingham County residential real estate market! With all of the data in, we find that there were 16.25% more home sales

in 2016 than in 2015 -- rising to an annual pace of 1,309 home sales. The median price rose 4.05% during 2016 to $192,500 -- as compared to $185,000 one year ago. Homes are also selling slightly more quickly -- with a median of 52 days on the market in 2016 as compared to 54 days on the market in 2015.

Published on January 11, 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 - 12/31/2017.

[1] MARKET SUMMARY

HOME SALES REPORT :: BY AREA City of Harrisonburg

Rockingham County

# Home Sales

2015

2016

% Change

2015

2016

% Change

December

36

28

-22.22%

48

66

37.50%


380

440

15.79%

746

869

16.49%

. Rockingham County

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City of Harrisonburg

7/28/2008 3:10:30

Median Sales Price

2015

2016

% Change

2015

2016

% Change

November

$152,700

$176,750

15.75%

$213,725

$204,000

-4.55%


$166,500

$166,750

0.15%

$194,900

$202,000

3.64%

City of Harrisonburg

Rockingham County

Median Days on Market

2015

2016

% Change

2015

2016

% Change

November

50

52

4.00%

34

68

100.00%


53

35

-33.96%

56

62

10.71%

Looking back at 2016, home sales increased ever so slightly more in the County (+16.49%) than in the City (+15.79%) while at the same time, median prices have risen more in the County (+3.64%) than in the City (-0.15%) during that same timeframe. Homes are selling much faster in the City (median of 35 days) as compared to the

County (median of 62 days). Perhaps the larger number of buyers who purchased in the County (869) as compared to the City (440) combined with slightly faster sales growth in the County to create that larger increase in median sales price in the County over the past year?


[2] RECENT TRENDS Harrisonburg & Rockingham County

Month-By-Month Home Sales History 175 2013

158

2014

150

2015

133

Single Family, Townhome & Condo Sales

2016

134

125

104 101

100

85 75

50

December 2016 94 Home Sales

151

67

72 68

56 49

53

JAN

FEB

49

68

72

110

107 104

93

111

125 118 114 108

128

126

116 106

100

111 logo.indd 1

97

112

113

105

97 94 93

97 93

83

81

79

71

7/28/2008 3:10:30

84

68 64

58

25

0

MAR

APR

MAY

JUN

The graph above shows the month-by-month breakdown of home sales in Harrisonburg and Rockingham County with a red line for 2016 and a blue line for 2015. After a slow and somewhat disappointing month of October home sales (97) home sales shot up to 113 in November, which far exceeds the number of

JUL

AUG

SEP

OCT

NOV

DEC

sales seen in each of the past three months of November. The 94 home sales seen in December 2016 also exceeded the amount (84) seen in December of last year, which closes out a strong year of home sales during 2016.



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

1,125 1,041 962

1,309

DEC

1,215

NOV

1,102

OCT

1,005

SEP

877

AUG

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857 760 634

719 605

526 392 282

JUN MAY APR

321

MAR

192 121 49

189 117 49

135 67

2013

2014

2015

2016

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. While we saw a significant improvement in the number of annual home sales between 2012 and 2013, we then saw just slow and steady growth over the subsequent two years

JUL

454

248 167 109 46

220

7/28/2008 3:10:30

FEB JAN

(2014, 2015) -- but that all changed in 2016. Annual home sales finished out the year at 1,309 sales -- the highest (by far) that we have seen anytime in the past five years. In fact -- this marks a 57% increase in annual home sales when comparing 2011 to 2016. Now we must wonder -- can 2017 keep pace with 2016?



$190,000

$190,000

$186,250

$185,750

$185,000

$185,000

$186,500

$186,000

$186,000

$185,000

$185,000

$185,000

$185,000

$186,000

$185,000

$185,000

$185,000

$185,000

$180,000

$179,900

$179,000

$179,700

$178,000

$176,500

$177,000

$174,321

$174,700

$174,900

$173,000

$176,500

$175,000

$175,000

$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 1,309

1,299

1,265

1,273

1,242

1,210

1,204

1,187

1,164

1,156

1,143

1,125

1,138

1,127

1,134

1,148

1,128

1,145

1,122

1,119

1,107

1,093

1,085

1,078

1,081

1,077

1,058

1,030

1,040

1,033

1,022

1,019

1,055

1,042

1,074

1,067

1,143

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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 Dec-13

Dec-14

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

Dec-15

$100,000 Dec-16

the past 30 months 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 to $192,500.


[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 1,000

+4%

$127,700

n/a

$122,588

800

$122,900

+17%

$149,000

+14%

$169,900

1,200

1,248

-6%

+1%

+2%

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1,067

+2%

+19% -10%

870

-8%

799

+4%

832

+8%

+4%

$192,500

+4%

$200,000

1,309 +17%

-23%

967

+2%

$185,000

-13%

-3%

$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%

1,085

1,122

+3%

$150,000

7/28/2008 3:10:30

900

$100,000

600

400

$50,000

200

0

2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016

$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

1,000 851

800 $147,000

$136,000

+2%

+8%

-1%

+5%

+7%

$214,000

$200,000

$190,000

-2%

$192,000

+6%

$175,000

+20% logo.indd 1

798

813

+1%

819

$225,000

978

909 -12%

+16%

$133,239

600

+24%

880 $170,000

-2%

+3%

-6%

-11%

+16%

868

-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

n/c

818

7/28/2008 3:10:30

+21%

-15%

678

-11%

602

-1%

595

+10%

653

+3%

672

$125,000

$75,000 400

$25,000

200

0

2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016

-$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

+47%

302

300

+14%

+10% +5%

-6%

-15%

$118,500

+9%

444

$108,200

$103,100

+9%

$94,600

400

483

-1%

$160,000

$140,000

$120,000

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-36%

289

304 -7%

+49%

268 228

-24%

200

+3%

n/c

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%

$180,000

$154,250

-18%

$159,545

600

$163,800

644

$160,850

700

204

203

-12%

179

+11%

254

+5%

266

+9%

331

+14%

7/28/2008 3:10:30

$100,000

$80,000

$60,000

+27%

$40,000 100 $20,000

0

2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016

$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

931 929 924 913 904 893 881 870 860 849 839 831 822 813 801 791 780 770 757 744 730 718 705 694 686 679 674 664 656 646 641 637 635 632 631 628 624 622 617 618 622 625 628 630 631 633 633 635 635 634 633 631 627 625 622 616 612 607 608 609 611 610 610 609 606 599 600 603 619 635 631 648 654

Assuming Six Months of Housing Supply is a Balanced Market

SELLERS

700 600 500 400 300

Large Over Supply = Buyer's Market

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7/28/2008 3:10:30

A Relatively Balanced Market

379 376 368 374 372 370 352 365 373 386 389 389 397 397 401 403 401 406 407 416 422 416 425 444 432 436 447 447 462 472 477 486 496 503 509 492 507 510 502 496 482 484 491 495 491 504 515 518 521 518 527 535 543 547 560 554 565 560 559 565 560 570 570 577 581 593 592 584 578 569 556 542 530

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

Dec-16

Oct-16

Aug-16

Jun-16

Apr-16

Feb-16

Dec-15

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

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 $117

$116

120

$113 $101

$87 $76

$227K $224K

$81

$210K

$103

$105

$133K

$136K

$106

$113

$108

$250,000

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$215K

$203K

7/28/2008 3:10:30

$214K $195K

$184K

$195K $192K

$170K 60

$300,000

Median Price Per SF

$97

100

80

$127

$190K

Median Sales Price

$150,000

$147K $100,000

40

$50,000

20

0

$200,000

$200K

2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016

$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

$140 140

$138

130

$127 $123

$123

120

$126 logo.indd 1

$121 $117

$119

7/28/2008 3:10:30

$121

$117

$115 $111

$111

$108

110

$104 $105

100

$106

$115

$114

$105

$104

$106

$101 $103 $96

$97

$105 $101

$98

90

80

2007

2008

2009

2010

2011

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

2012

2013

2014

2015

2016

(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

97.7%

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%

1,438

1,324

1,309

1,248

1,250

100.0%

95.0%

1,507

1,500

97.0%

98.0%

1,153

90.0%

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1,071

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

0

2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016

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 has now 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

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150

7/28/2008 3:10:30

109

$114

$105

$99

80

$94

100

$129

121

120

$130

139

$137

140

137

$146

138

$150

140

$144

158

160

84

82

60

41

40

45

51

100

54

47

50

38

20

0

2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016

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

77

75

99

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86

68 60

109

108

98

94

91

119

118

114

130

128

126

76

7/28/2008 3:10:30

93

84

82 70

63

74

67

63

56

40

Annual Pace: 1,331 contracts 20

Annual Pace: 1,192 contracts

Annual Pace: 1,172 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. These strong contract numbers, clearly, are leading to the busy season of

Dec-16

Nov-16

Oct-16

Sep-16

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

Mar-15

Jan-15

Feb-15

Dec-14

Nov-14

Oct-14

Sep-14

Aug-14

Jul-14

Jun-14

May-14

Apr-14

Feb-14

Mar-14

Jan-14

Dec-13

0

closings -- and we are likely to see a relatively decent month of closings in January based on the November and December contract figures shown above. Contracts will likely start to slowly rise during January and February before really starting to jump in March 2017.


[5] INVENTORY LEVELS Harrisonburg & Rockingham County

Inventory Levels (end of month)

700

623 600

659 653 644 635 636 640

619

577 538 542 541

560

570

581 582

532 539

500

568

549

560 532 480 451 413

400

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7/28/2008 3:10:30

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 may 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 declining over the past year, to a current level that is 26% down from a 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

382

391

156

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

7/28/2008 3:10:30

170

154

151

147

200

152 150

147

152 151 143

139

150

133 125

129

130

108 108 100

110

95 90

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 22% over the past year, while the number of townhouses, duplexes and condos for sale has

70

decreased by 38% over the past year. As is evident, inventory levels are much lower in the Winter market, and we may see further declines in inventory levels over the next few months as we continue through the winter real estate market.



Inventory Levels by Property Location City of Harrisonburg

Rockingham County

600

500

461 438

400

388 382

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

321 300

200

150

160

169

181 185

198

189 190 186 188

163 170

100

152

136 134

153 152 148 150 148 141 134

112 106

92

-21% YOY

-39% 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 (-39%) over the last year in the number of properties for sale, while in the County, there has been a slightly smaller (-21%)

decline in the number of homes for sale. Despite relatively modest 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

< 30 days, 36, 9%

> 1 year, 54, 4% > 1 year, 57, 14% 6 - 12 months, 207, 16%

30 - 59 days, 50, 12% logo.indd 1

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< 30 days, 498, 38% 6 - 12 months, 102, 25%

3 - 6 months, 229, 18%

60 - 89 days, 56, 13%

60 - 89 days, 124, 9% 30 - 59 days, 197, 15%

3 - 6 months, 112, 27%

Median Days On Market: 52

Median Days On Market: 139

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 52 days for homes that have sold in the past year. Remarkably, 38% 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 53% 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

53

52

52

53

53

52

54

54

55

54

54

54

54

55

54

55

56

58

58

57

59

59

58

60

60

+11% YOY

50 logo.indd 1

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40

30

20

20

21

22

23

23

24

24

25

25

25

27

27

27

27

27

27

27

28

28

28

29

29

30

30

+13% YOY

20

10

0

9.8

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

9.6

4.8

9.5

5.0

8.7

8.2

5.2

5.4

7.8 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

7.4 5.4

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 11.5 12.3 10.3 11.3

5.6

6.1

6.1

6.3

6.3

6.1

6.2

+72% YOY +14% YOY

most significant (drastic!) increase being in the $300K - $400K price range (+72% year-over-year) with the other three price ranges (under $200K, $200K - $300K, $400K+) each seeing between a 11% 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

311 313 314 283

269 272 265

261 264

274 256

250

248 234

229

221 217 202

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200

158 155

172

171

177

190

182 178

157

190 173 172 168

174

182

172

182

88 57

50

54

58 57

70 53 52

63

68 67

73

83 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 69

80 72

75 73

190

166

150

100

7/28/2008 3:10:30

82 75

77 72

71 64

136

64

127

62

61 48

-38% YOY

-19% YOY

+13% YOY -26% 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 (-38%) in inventory levels over the past year -- with buyers in that price range now only having 176

options as compared to 283 one year ago. The $200K - $300K price range has seen a 19% decline in inventory, which is relatively similar to the 26% 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 13% YOY.



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

14

15 14

14

14

17

$200k - $300k

$300k - $400k

17 15

14

Entire Market: 3.8 Months of Housing Supply 413 Active Listings 12-Month Average of 109 Sales/Month

15 13

12

$400k +

14

12

10

8

8 7

8 6

6

4

6

5

6

5

5

5

8

8

8

8

8

5

6

6

6

9 9

8

5

7 7 6

6

6 6

2

6 5

11

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9 9

7

7

7

6

9

9

12 11

10

8

13

13

12

12

8

14

10 8

9 8

6 6

5

6 5

8

7

8

6

6 6

5 4

4

-1% YOY

6

6 5

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7

7

6 5

8

10

4

4

4

3

5

4

5 4

3

3

-57% YOY -29% YOY -44% 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 three 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 that (or less) 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

$36,900

$32,208

150

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$54,500

$59,650

$53,950

$54,900

$56,500

$54,500

$56,600

$55,000

201

$30,500

200

247

$54,500

250

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$42,000

261

$80,000

$59,900

304 300

Stability

$40,000

Declin

111

100

$60,000

e

85

83

75 58

64

62

63

2010

2011

2012

84

78

64

$20,000

50

0

2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2013

2014

2015

2016

$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 + 17 listings 12%

$80k - $100k 18 listings 13%

$60k - $80k 32 listings 23%

$0 - $40k 28 listings 20%

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$40k - $60k 47 listings 33%

142 Active Lot Listings; Median List Price: $58,500

Despite the fact that only 64 lots (of less than an acre) sold in all of 2015, there are a remarkable 142 lots currently for sale. Some sanity exists in this listing market, however, as the median list price of lots for sale ($58,500) 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 2.2 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

$10,000

logo.indd 1

$20,000

$15,171

$13,240

$14,981

$15,000

$15,964

$25,000

$9,932

$9,535

$8,333

120

$8,245

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

42 40

66

73 $0

58 49

-$5,000

28 -$10,000

20

0

2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016

-$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%

$50k - $75k 10 listings 7%

$0 - $10k 48 listings 32% logo.indd 1

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$30k - $50k 21 listings 14%

$20k - $30k 16 listings 11% $10k - $20k 40 listings 26%

151 Active Land Listing; Median List Price: $17,220 / Acre

Despite the fact that only 73 parcels of land (of one acre or more) sold in all of 2016, there are a remarkable 151 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 151 parcels for sale is currently $17,220 per acre. Given

last year’s 73 land sales, if no other land is listed for sale, it would take 2.1 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 1,153

1,200 1,071

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

0

91

2001

63 2002

75

2003

70 2004

86

2005

93

2006

118

97

2007

2008

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

177

2009

2010

223

2011

252

2012

222

2013

163

2014

139

2015

136

2016

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% Dec-13

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Dec-14

4.32%

4.03% 3.47%

3.42%

3.50%

3.43%

3.48%

3.48%

3.64%

3.66%

3.71%

3.62%

3.79%

4.01%

3.95%

3.76%

3.86%

3.84%

3.98%

4.02%

3.87%

3.68%

3.69%

3.80%

3.66%

4.00%

3.87%

3.97%

4.20%

3.98%

4.10%

4.12%

4.14%

4.12%

4.33%

4.40%

4.37%

4.50%

4.32%

5.00%

4.48%

5.50%

Dec-15

Dec-16

7/28/2008 3:10:30

Harrisonburg-Rockingham MSA

3.8%

4.2%

4.2%

4.0%

4.4%

4.4% 3.8%

4.1%

4.0%

3.2%

3.50% 3.00% Nov-13

4.3%

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%

4.1%

5.0%

5.5%

5.5%

5.6%

Not Seasonally Adjusted

4.8%

4.9%

5.2% 4.1%

4.50%

4.7%

5.00%

4.4%

5.50%

4.7%

6.00%

5.3%

Unemployment Rate

Nov-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 that we will see rates in the 3.X% range again anytime soon. The second graph above illustrates trends in

Nov-15

Nov-16

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