Harrisonburg & Rockingham County Real Estate Market Report ...

FEBRUARY 2016 Harrisonburg & Rockingham County Real Estate Market Report An analysis of real estate activity through January 31, 2016 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 10, 2016

2013

2014

2015

2016

% Change ('15 - '16)

January

49

53

49

67

36.73%

Year-To-Date (Jan)

49

53

49

67

36.73%

Last 12 Months (Feb-Jan)

908

1,069

1,074

1,143

6.42%

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Median Sales Price

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2013

2014

2015

2016

% Change ('15 - '16)

January

$155,001

$156,000

$195,000

$194,000

-0.51%

Year-To-Date (Jan)

$155,001

$156,000

$195,000

$194,000

-0.51%


$172,000

$175,000

$179,900

$185,000

2.83%

Median Days on Market

2013

2014

2015

2016

% Change ('15 - '16)

January

134

56

81

77

-4.94%

Year-To-Date (Jan)

134

56

81

77

-4.94%


89

64

66

55

-16.67%

Home sales were brisk in January 2016, with 67 closed sales -- as compared to 49, 53 and 49 during the previous three months of January. This marks a 37% year-overyear increase in January home sales -- and contributes to the 6.4% year-over-year increase we have seen in annualized home sales. Median sales prices are also on

the rise -- with a 2.83% year-over-year increase in the annualized median sales price -- even though the median sales price in January happened to decline by 0.51% as compared to last January. Homes sold more quickly in January (median of 77 days on the market) as compared to last January (median of 81 days).

Published on February 10, 2016 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 - 01/31/2016.

[1] MARKET SUMMARY

HOME SALES REPORT :: BY AREA City of Harrisonburg

Rockingham County

# Home Sales

2015

2016

% Change

2015

2016

% Change

January

18

27

50.00%

31

40

29.03%

Year-To-Date

18

27

50.00%

31

40

29.03%

. Rockingham County

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City of Harrisonburg

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Median Sales Price

2015

2016

% Change

2015

2016

% Change

January

$194,500

$168,000

-13.62%

$206,000

$214,000

3.88%

Year-To-Date

$194,500

$168,000

-13.62%

$206,000

$214,000

3.88%

City of Harrisonburg

Rockingham County

Median Days on Market

2015

2016

% Change

2015

2016

% Change

January

172

88

-48.84%

71

76

7.04%

Year-To-Date

172

88

-48.84%

71

76

7.04%

As you consider the data in this chart, bear in mind that this only reflects one month of data, and as such, the small sample size can distort overall market trends. As such, let’s ignore the trends completely (this month) and note that there are more homes selling in the County (40) than the City (27) and at much higher prices in the

County (median of $214K) as compared to the City ($168K) and more speedily in the County (median of 76 days on the market) as compared to the City (median of 88 days). When we ge tto next month’s report we will look a bit more closely at the trends over time.


[2] RECENT TRENDS Harrisonburg & Rockingham County

Month-By-Month Home Sales History 150

2013 2014 2015

134

130

Single Family, Townhome & Condo Sales

January 2016 67 Home Sales

125 118 110

110

104

111

104 107

108

2016

126

116 111 106

105

100

97

93

90

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72 67

68

56 50

49 49

53

97 93

93

7/28/2008 3:10:30

84

83

81 70

112

79

72

71

68 64

58

30

10 JAN

FEB

MAR

APR

MAY

JUN

Monthly home sales were 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. Then, September, October and December showed slower monthly sales as compared to

JUL

AUG

SEP

OCT

NOV

DEC

the same months in 2014. We are starting the year off well in 2016, with the highest month of January sales in recent history - and it seems reasonable to think that we will see another strong month of sales in February, though January’s one significant snowfall may affect that trend.



Monthly Cumulative Residential Sales 1200 1100

1,067

1,085

974

988

900

910

920

832

839

817

747 685

743

1000 900 800 700 600

623

497

500

383

400

400

299

308

226

228

146 79 40

154 87 41

2011

2012

400

462

200 100 0

734 618

542

DEC

1,041

NOV

962

OCT

857

SEP

808

AUG

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592

500

300

664

1,125

296 192

697 591 466 355 248

760

JUL

634

JUN

526

MAY

392

APR

282

MAR

189

121 49

167 109 46

117 49

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. As is evident, there were more home sales in 2015 than in any other year in the prior four years. The largest year-over-year recovery seems to have occured between

7/28/2008 3:10:30

FEB JAN

2012 and 2013 -- but we also saw a larger increase in home sales last year (2014 to 2015) than we saw the previous year (2013 to 2014). The total of 1,125 home sales seen in 2015 is a high bar that I hope our market will be able to reach and potentially exceed in 2016.



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

$200,000 $185,000

$185,000

$185,000

$186,000

$185,000

$185,000

$185,000

$185,000

$185,000

$180,000

$179,900

$179,000

$179,700

$178,000

$176,500

$177,000

$174,700

$174,321

$174,900

$173,000

$175,000

$176,500

$175,000

$175,000

$175,000

$175,000

$175,200

$174,800

$175,000

$175,000

$175,000

$175,000

$172,100

$172,700

$175,000

$172,375

2,000

$172,000

2,500

$190,000

$180,000

Stable

$170,000

Stable Annualized Median Sales Price

1,143

1,138

1,125

1,134

1,127

1,148

1,145

1,128

$160,000 1,122

1,119

1,093

1,078

1,085

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

1,000

1,107

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1,500

7/28/2008 3:10:30

$150,000

$140,000

$130,000

$120,000

500

$110,000

0 Jan-13

Jan-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

Jan-15

$100,000 Jan-16

the past 21 months we have seen relatively consistent increases in the annual pace of home sales, which has now risen to 1,143 sales/year. And after many years of median sales prices hovering between $173K and $175K, we have seen steady increases over the past 18 months up to their current level of $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 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%

-23% logo.indd 1

967

1,067

870

-8%

799

+4%

832

+8%

+4%

1,085

$194,000

$200,000

1,122

+3%

+2%

+19% -10%

+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%

$150,000

7/28/2008 3:10:30

900

$100,000

600

400

$50,000

200 67 $0

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 (2015) marks the fifth (!) year in a row when we have seen an increase (+3%) in

2009

2010

2011

2012

2013

2014

2015

2016

the pace of sales in our local market, which was also accompanied by a 4% increase in the median sales price. We have now seen increases in the median sales price for four years in a row, though they were small (+1%, +2%, +2%) increases up until 2015 when we saw a 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%

$216,500

$200,000

$190,000

-2%

$192,000

+6%

909

$225,000

$175,000 -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

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798

813

+1%

819

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 48 0

-$25,000 2001

2002

2003

2004

2005

2006

2007

2008

The single family home market in Harrisonburg and Rockingham County told two two different stories last year (2015), depending on whether we were evaluating the price or pace of home sales. This past year (2015) marked the third year in a row with between 810 and 820 home sales -- so, virtually no change in the pace of

2009

2010

2011

2012

2013

2014

2015

2016

home sales. Over the past year, however, the median sales price of single family homes increased by 5% to $200,000 -- which is the first time we have seen a $200K or higher median sales price since 2005-2009. It is encouraging that sales prices are increasing even without substantial increases in the number of home sales.



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

$140,000

$120,000

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-36%

289

7/28/2008 3:10:30

$100,000 304 -7%

+49%

268 228

-24%

200

+3%

$160,000

450

$134,950

500

n/c

+11%

$152,000

-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

+14%

$80,000

$60,000

+27%

$40,000 100 $20,000 19 0

$0 2001

2002

2003

2004

2005

2006

2007

2008

After six years of rapid declines in the pace of townhouse sales in Harrisonburg and Rockingham County, the pace of sales has been rebounding since 2012. The 304 sales seen in 2015 marked the highest level of sales seen anytime between 2008 and 2015. Despite the continuing increase in the sale of townhouses (and duplexes

2009

2010

2011

2012

2013

2014

2015

2016

and condominiums) we did not see any further market recovery in 2015 when it comes to price. The median sales price of these properties was again $151,750 -the exact same median sales price we saw in 2014.



Market Balance between Buyers and Sellers 1000 900

881 883 889 893 899 906 915 921 927 932 932 931 929 924 913 904 893 881 870 860 849 839 831 822 813 801 791 780 770 757 744 730 718 705 694 686 679 674 664 656 646 641 637 635 632 631 628 624 622 617 618 622 625 628 630 631 633 633 635 635 634 633 631 627 625 622 616 612 607 608 609 611 610

Assuming Six Months of Housing Supply is a Balanced Market

SELLERS

800 700

Huge Over Supply = Buyer's Market

600

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7/28/2008 3:10:30

500 400 300

413 413 409 425 423 438 417 410 401 394 381 379 376 368 374 372 370 352 365 373 386 389 389 397 397 401 403 401 406 407 416 422 416 425 444 432 436 447 447 462 472 477 486 496 503 509 492 507 510 502 496 482 484 491 495 491 504 515 518 521 518 527 535 543 547 560 554 565 560 559 565 560 570

Approaching a Balanced Market

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

Jan-16

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

Mar-14

May-14

Jan-14

Nov-13

Sep-13

Jul-13

May-13

Mar-13

Jan-13

Nov-12

Sep-12

Jul-12

Mar-12

May-12

Jan-12

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

Mar-10

Jan-10

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 $76

$227K

$81

Median Price Per SF

$113

$97

100

80

$127

$103

$105

$133K $136K

$111

$108

$250,000

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$224K

$210K

7/28/2008 3:10:30

$217K

$215K $203K

$195K

$184K

$195K

$192K $190K

$170K 60

$106

$200,000

$200K

Median Sales Price

$150,000

$147K $100,000

40

$50,000

20

$0

0 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

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. Over the past year (2014 to 2015) 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

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$117 $119

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$121

$121

$117

$115

$114

$111

$111

$110

$108

110

$104 $105

100

$106

$105

$104

$106 $108

$101 $103 $96

$97

$119

$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 2015 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 ($101/SF) than homes with less than 1500 SF ($121/ 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

100.0%

97.0%

96.0%

96.0%

96.0%

97.0%

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

900

870 799

7/28/2008 3:10:30

1,122

85.0%

832

750 80.0% 500 75.0%

250

67 0

70.0% 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 97.4% in 2000 before home sales started escalating. Of

2009

2010

2011

2012

2013

2014

2015

2016

note, last year we almost returned to that pre-boom level -- given the 97% average during 2015 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

$133

$140

150

$126

$136

$129

$128

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109

$114

$105

$99

80

$94

100

$129

121

120

$130

139

$137

140

137

$146

138

$150

140

$144

158

160

100

84

60

41

40

45

51

54

47

50

38

20

7 0

0 2001

2002

2003

2004

2005

2006

2007

2008

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

2009

2010

2011

2012

2013

2014

2015

2016

declined again in 2014 to 38 sales, but finally bounced back up to 54 sales last year -- the highest number seen since pre-2010. The median price per square foot has risen steadily over the past two years to its current level of $140/SF.


[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

107

103 96

118

112

109 102

108

98

94

91

91

118

114

86

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80

76

77

75

70

7/28/2008 3:10:30

82

76 70

68

63

74 67

56

60

40

Annual Pace: 1,200 contracts

20



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 (2016) is off to a solid start, with 74 contracts signed during January. This matches the pace of contract signing we saw last January, and indicates that we should likely see a similar

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

Nov-13

Oct-13

Sep-13

Aug-13

Jul-13

Jun-13

May-13

Apr-13

Mar-13

Feb-13

Jan-13

0

amount of closed sales in February and/or March of this year. Of note, the annual pace of contracts being signed has declined over the past year -- but the annual pace of closed sales has increased. This likely indicates that a higher proportion of signed contracts are successfully making it to settlement.


[5] INVENTORY LEVELS Harrisonburg & Rockingham County

Inventory Levels (end of month)

800

675 679

700

693

705

692 688 636

608 600

555 550

623

604

659 653 644 635 636 640

577

619 560

538 542 541

532

500 logo.indd 1

7/28/2008 3:10:30

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 small (2%) year over year decline.



Inventory Levels by Property Type Single Family Homes

Townhomes, Duplexes, Condos

600

260

520 500

529

549

539 535 527 501 478

460 423

477 445

440

412 382

400

487 481 485 493

391

240

445 408

405 381

392

220

0.25% Increase in Inventory logo.indd 1

7/28/2008 3:10:30

200 300

178

182

166

200

155 148

157

161

166

164 158

156

150 144

138

100

180

174

172

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). The number of single family homes for sale and the number of townhouses, duplexes and condos on the market for sale have both remained

160 151

157

154

151

147

0.66% Decline in Inventory

152

150

160

140

120

remarkably steady when comparing today’s inventory levels with inventory levels during the same timeframe one year ago. As is evident, inventory levels are much lower now in the Winter market -- and we are not likely to see significant increases until March or April.



Inventory Levels by Property Location City of Harrisonburg

Rockingham County

600

483 488 480 481 474 479

500

388 382

383 384

478

477 454 449 448

438

432

423 400

461

454

449 408 406

396 372

+6% YOY

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300

200

172 166

185

201 200

210 217 212 207 182

172 150

160

169

181 185

198

189 190 186 188

163 170

152

136

-15% 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 only been a relatively sizable decline (-15%) over the last year in the number of properties for sale. In the County, however, there has been a smaller increase (+6%)

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, 50, 9%

> 1 year, 78, 7%

< 30 days, 65, 12%

30 - 59 days, 28, 5%

6 - 12 months, 145, 13%

< 30 days, 419, 37%

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60 - 89 days, 61, 11%

6 - 12 months, 150, 28% 3 - 6 months, 206, 18%

3 - 6 months, 188, 35% 60 - 89 days, 119, 10%

30 - 59 days, 176, 15%

Median Days On Market: 55

Median Days On Market: 139

Despite high inventory levels, and low numbers of buyers in the market, the homes that are actually selling are selling rather quickly. In fact, over 1 out of 3 homes (37%) 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 (52%) 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

51

51

50

50

48

48

49

50

50

51

52

52

53

52

52

53

53

52

54

54

55

54

54

54

54

55

+6% YOY

40 logo.indd 1

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30

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

27

27

27

7.8

7.4

7.7

5.4

5.4

5.4

+34% YOY

20

10

0

6.7

6.4

6.7

6.5

7.0

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

3.3

3.7

3.9

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

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

-26% YOY +30% YOY

for in the $300K - $400K price range, where we have seen a 26% decline in home sales. The most significant increase seen over the past 12 months has been in the $200K - $300K price range, where we have seen a 34% increase in home sales, though the $400K+ price range follows close behind with a 30% increase.



Inventory Levels by Price Range $0 - $200k

$200k - $300k

$300k - $400k

$400k +

350

308 300

287 274

301

309

321

312

319

316 294 290

285

321 300 299 302

287

311 313 314 283

269 272 265

261

250

200

172

180

190 192

201 203

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188

177

7/28/2008 3:10:30

182 178

157

173 172 168

157 154

134 135

75

74

59

67

105

102

97

87 81

50

172

171 158 155

107 100

190

180

155 150

88

93

92

95

90 89

89

88

83 71

77

-4% YOY

71

63

70 57 54

58 57

53 52

63

83

83

84

68 67

73

80

80

71

79 73

80 75

73 64

65 55

69

48

-1% YOY

+19% YOY -16% 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 mid-upper price range ($300K - $400K) has seen the largest upward adjustment (+19%) in inventory levels over the past year, while the highest price range ($400K+)

has seen the larges (-16%) in the number of homes for sale. All four price ranges may see inventory levels decline further over the next two months as we continue through the Winter market.



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

$200k - $300k

$300k - $400k

$400k +

30

25

25

25

24

23

24

22

21

20

20

17

16 15 15

14 11

15 13

6 6

14

6 5

7

6

8

8

9

6

9

10

6

14

15

7/28/2008 3:10:30

17 15

14

15

9

9

6

6

6

8

8

6

5

6 5

8

-26% YOY 12

10

7

6

14

17

12

10

6

17

11

9

6

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14 12

12

10

5

Entire Market: 5.6 Months of Housing Supply 532 Active Listings 12-Month Average of 95 Sales/Month

7

5

7

5

5

8

8

6

8

6

6

8

9 7

8

8

7

6

6

5

8

7 6

9

7 6

9

6 6

10 9 9

9

6

6

5

+51% YOY -24% YOY +3% YOY

5

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 nine 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 over the past year.


[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

$59,650

$53,950

$54,900

$56,500

$54,500

$55,000

$56,600

$60,000

Stability 111

100

85

$40,000

Growth 83

75 58

64

62

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$42,500

$36,900

$32,208

150

201

$30,500

200

247

$54,500

250

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$42,000

261

$80,000

$59,900

304 300

84

63

78

$20,000

50

4 0

$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 2015 (78) as compared to 2014 (84). That slower pace of lot sales did not stop sellers from being able to obtain higher prices for their building lots, as the median sales price increased from

2009

2010

2011

2012

2013

2014

2015

2016

$53,950 to $59,650. This is nearly tied for the highest median sales price seen anytime since 2008. While we are unlikely to return to seeing 250 or more lot sales in a single year, hopefully we will see increase back up to 100 or 125 sales in the coming years.



Price Distribution of Active Lot Inventory less than 1 acre

$100k + 11 listings 7% $80k - $100k 14 listings 10%

$0 - $40k 28 listings 19%

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$60k - $80k 38 listings 26% $40k - $60k 56 listings 38%

147 Active Lot Listings; Median List Price: $55,000

Despite the fact that only 78 lots (of less than an acre) sold in all of 2015, there are a remarkable 147 lots currently for sale. Some sanity exists in this listing market, however, as the median list price of lots for sale ($55,000) is actually a bit lower than the 2015 median sales price of $59,650. Given last year’s 78 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 (2011-2015) median sales prices.



Land Sales & Median Price Per Acre 1 acre or more

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107

$20,000

$15,171

$13,240

$14,981

$15,000

$15,964

$25,000

$15,000

$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

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$10,000

100

87 77

76

80

$5,000

83 70 57

60

51

44

42 40

66

$0

58 49

-$5,000

28 -$10,000

20

2 -$15,000

0 2001

2002

2003

2004

2005

2006

2007

2008

Parcels of land larger than one acre in Harrisonburg or Rockingham County peaked in 2013 at 70 sales, declined in 2014 to only 58 sales, but popped back up to 66 sales during 2015. The median price per acre of these lots with over 1 acre also jumped back up in 2015 to $15,171. This is the highest price per acre for land of over one

2009

2010

2011

2012

2013

2014

2015

2016

acre seen anytime in the past six years. It seems possible that we will see further increases in the pace of these sales in 2015 as well as potentially in the median sales price of these lot / land sales. Ignore the yellow line skyrocketing off the graph in 2016 -- this is a high median price per acre based on a very small sample size.



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

$100k + 18 listings 10% $75k - $100k 4 listings 2%

$0 - $10k 37 listings 21%

$50k - $75k 17 listings 9% logo.indd 1

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$30k - $50k 26 listings 14% $10k - $20k 45 listings 25%

$20k - $30k 33 listings 18%

180 Active Land Listing; Median List Price: $22,153 / Acre

Despite the fact that only 66 parcels of land (of one acre or more) sold in all of 2015, there are a remarkable 180 parcels of land currently for sale. Furthermore, despite the fact that the median sales price of land is hovering around $15,000 per acre, the median list price of the 180 parcels for sale is currently $22,153 per acre. Given

last year’s 66 land sales, if no other land is listed for sale, it would take 2.7 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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1,122

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1,013

1,000

936 864

816

794

758

800

600

400 270 200 91

63

75

70

86

93

118

97

177

223

252

222

163

139 67

0 2001

2002

2003

2004

2005

2006

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

2009

2010

2011

2012

2013

2014

2015

10

2016

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, 6.7 times as many home sales as foreclosures in 2014, and 8.1 times as many in 2015.


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

6.00%

3.50%

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Jan-14

Jan-15

3.79%

4.01%

3.95%

3.76%

3.86%

3.84%

3.98%

4.02%

3.87%

3.69%

3.68%

3.80%

3.66%

3.97%

3.98%

4.20%

4.10%

4.14%

4.12%

4.12%

4.33%

4.40%

4.37%

4.32%

4.48%

4.29%

4.10%

4.32%

4.51%

3.00% Jan-13

3.87%

3.40%

3.57%

3.51%

4.00%

3.53%

4.50%

3.81%

5.00%

4.31%

4.46%

5.50%

Jan-16

7/28/2008 3:10:30

Harrisonburg-Rockingham MSA

3.9%

4.1%

4.0%

4.4%

5.0%

5.5%

5.4%

5.0% 4.4%

3.9%

4.00%

5.1%

4.8%

4.4%

4.1%

4.8%

5.0%

5.5%

5.5%

5.6%

5.3% 4.1%

5.2%

4.9%

4.7%

4.7%

5.3%

5.0%

5.3%

5.9%

6.1%

5.7%

Not Seasonally Adjusted

4.4%

4.50%

4.6%

5.00%

4.9%

5.50%

5.4%

6.00%

5.1%

6.50%

5.6%

Unemployment Rate

3.50% 3.00% Dec-12

Dec-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 eight months. The current average rate of 3.79% is among the lowest rates we have seen in the past several years. The second graph above illustrates

Dec-14

Dec-15

trends in the local unemployment rate -- which has shown a general downward trend over the past four years, declining from 5.1% (in 2012) to 3.9% (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