Harrisonburg & Rockingham County Real Estate Market Report ...

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

Four Bedroom Home with Garage, Apartment, Unfinished Basement . . . . . . . . . . . . . . . . . 10966PortRepublicRoad.com

[1] MARKET SUMMARY

HOME SALES REPORT Harrisonburg & Rockingham County

September 13, 2017

# Home Sales

2014

2015

2016

2017

% Change ('16 - '17)

August

106

126

158

116

-26.58%

Year-To-Date (Jan-Aug)

693

761

879

851

-3.19%

1,025

1,148

1,244

1,285

3.30%

Last 12 Months (Sep-Aug)

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Median Sales Price

7/28/2008 3:10:30

2014

2015

2016

2017

% Change ('16 - '17)

August

$176,950

$182,500

$185,750

$204,250

9.96%


$176,500

$187,200

$190,000

$197,000

3.68%


$174,900

$185,000

$186,000

$196,500

5.65%

2014

2015

2016

2017

% Change ('16 - '17)

August

63

55

38

36

-5.26%


65

58

51

32

-37.25%


64

60

51

42

-17.65%

Median Days on Market

Home sales in Harrisonburg and Rockingham County slowed down considerably in August 2017 as compared to last August. Only 116 homes sold last month, as compared to 158 during the same month last year. Of note, if we removed August 2016, last month’s home sales are certainly much more in line with August home

sales in 2014 and 2015. This slow month of August has put us behind for the year, with 2017-YTD home sales 3.19% behind the pace of sales in 2016. Despite slower sales, the median sales price has increased by 3.68% to $197,000 and the median days on market has decreased by 37.25% to 32 days.

Published on September 13, 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 - 08/31/2017.

[1] MARKET SUMMARY

HOME SALES REPORT :: BY AREA City of Harrisonburg

Rockingham County

# Home Sales

2016

2017

% Change

2016

2017

% Change

August

61

37

-39.34%

97

79

-18.56%


432

426

-1.39%

812

859

5.79%

. Rockingham County

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City of Harrisonburg

7/28/2008 3:10:30

Median Sales Price

2016

2017

% Change

2016

2017

% Change

August

$160,000

$183,000

14.38%

$199,900

$227,550

13.83%


$169,900

$167,500

-1.41%

$197,250

$213,000

7.98%

City of Harrisonburg

Rockingham County

Median Days on Market

2016

2017

% Change

2016

2017

% Change

August

21

30

42.86%

56

43

-23.21%


38

29

-23.68%

56

48

-14.29%

Nearly twice as many homes sell in Rockingham County each year as compared to the City of Harrisonburg -- but while the (annual) pace of sales sales is increasing in the County (+5.79%) it is slowing down (-1.39%) in the City. Furthermore, while the median sales price is on the rise in the County (+7.98% to $213,000) the median

sales price has actually declined slightly (-1.41% to $167,500) in the City. Also of note, and in some ways running somewhat counter to our other two trends, City homes tend to sell much more quickly, with a median of 28 days on the market, as compared to a median of 51 days on the market in Rockingham County.


[2] RECENT TRENDS Harrisonburg & Rockingham County

Month-By-Month Home Sales History 175 2014 158

2015

150

149

2016

138

2017

Single Family, Townhome & Condo Sales

152

133

134 125 117

125

101

100

93 85

75

69 67

56 50

49

69 68

72

53

58

FEB

MAR

68

110 107

111

115

108

129

126 116 106

111 logo.indd 1

97

100 93

112 105

113

7/28/2008 3:10:30

97

97

81

95

79

84

68

August 2017 116 Home Sales

25

0

JAN

APR

MAY

JUN

What a difference a year makes! Last year we saw 158 home sales in August -- the highest month of home sales in many years -- perhaps the highest month of home sales EVER in Harrisonburg and Rockingham County. This year -- only 116 home sales in August. As shown above, this is a much more typical level for August home

JUL

AUG

SEP

OCT

NOV

DEC

sales, but it does result in our annual pace of home sales slowing down quite a bit in 2017 as compared to 2016. So, moving forward, what are we to expect. I would anticipate around 105 to 115 home sales in September 2017 based on previous September sales, and the number of contracts signed in August.



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 1,041 962 857 760 634

1,313

DEC

1,218

NOV

1,105

OCT

1,008

SEP

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879

851

721

735

606

618

454

480

321

331

526 392 282

192 121 49

248 167 109 46

189 117 49

220

231

135 67

138 69

2013

2014

2015

2016

2017

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

AUG

7/28/2008 3:10:30

JUL JUN MAY APR MAR FEB JAN

August, it seemed that we would see more home sales in 2017 than in 2016 -- but we have now, suddenly, fallen behind. The next two months of sales will be critical if we stand any chance of catching back up with the annual pace of sales in 2016.



Time-Adjusted Home Sales Trends :: All Homes $193,000

$194,500

1,285

1,327

7/28/2008 3:10:30

1,325

1,339

1,323

1,324

1,316

1,315

1,313

1,302

1,276

1,244

1,212

1,205

1,187

1,164

1,156

1,143

1,143

1,125

1,138

1,127

1,148

1,134

1,128

1,145

1,122

1,119

1,107

1,093

1,085

1,078

1,081

1,077

1,268

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1,058

$200,000

$180,000

Stable

1,500

1,030

$192,700

$190,000

$192,000

$192,000

$192,000

$192,500

$190,000

$190,000

$189,000

$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

$177,000

$176,500

$174,321

2,000

$174,700

2,500

$196,500

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

$160,000

1,000 $140,000

500

0 Aug-14

$120,000

Aug-15

This graph shows a rolling 12 month trend line of the number of homes sold 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

Aug-16

$100,000 Aug-17

basis. Over the past three years we have seen relatively consistent increases in the annual pace of home sales, which (until last month) had risen to more than 1,300 sales/year -- and the median sales price has been steadily increasing for over a year from the $185K range to now be over $195,000.


[3] LONG TERM TRENDS Harrisonburg & Rockingham County

Home Sales & Price Trends Single Family Homes & Townhomes

$250,000

1,800

+14%

1,000 +4%

$127,700

800

$122,588

+17%

$169,900

+14%

1,153

$149,000

1,200

1,248

-6%

+1%

+2%

+4%

$197,000

$192,500

+4%

1,067

+2%

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1,309

1,085

1,122 +3%

$150,000

+19% -10%

870

-8%

799

+4%

832

+8%

$200,000

+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%

900

7/28/2008 3:10:30

851

$100,000

600

400

$50,000

200

0

2002

2003

2004

2005

2006

2007

2008

2009

This graph provides an overall indicator of the state of our housing market, showing both the number of homes being sold each year since 2002 (yellow bars) as well as changes in the median sales price during the same time period (blue line). This past year (2016) marks the sixth (!) year in a row when we have seen an increase

2010

2011

2012

2013

2014

2015

2016

2017

$0

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



Home Sales & Price Trends Single Family Homes

1,400

1,000

800 $147,000

$136,000

-1%

+5%

+7%

$224,000

$214,000

$200,000

$190,000

-2%

$192,000

+6%

$225,000

978

909

$175,000

+20% -12%

+16% +8%

600

+24%

880 $170,000

851

-6%

-11%

+16% +3%

-4%

$195,000

1,024 n/a 1,025

$184,000

-6%

$195,000

-4%

$203,000

-1%

$215,000

+8%

$223,575

1,200

$226,800

$210,000

$275,000

813

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798

819

n/c

818

7/28/2008 3:10:30

+21%

-15%

678

+1%

-11%

602

-1%

595

+10%

653

+3%

672

$125,000 597

$75,000 400

$25,000

200

0

2002

2003

2004

2005

2006

2007

2008

2009

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

2010

2011

2012

2013

2014

2015

2016

2017

-$25,000

years (2004, 2005) when more single family homes were sold in Harrisonburg and Rockingham County. This 20% increase in the pace of single family home sales was accompanied by a 7% increase in the median sales price. Median home sales prices seem to be poised to make another decent sized increase in 2017.



Home Sales & Price Trends Duplexes, Townhomes & Condos

529

444

$103,100

+47%

300

+14%

302

$118,500

+5%

-6%

-15%

+10%

$108,200

400

+9%

483

+3%

n/c

-1%

$159,000

$180,000

$160,000

$140,000

450

$134,950

500

+11%

$149,500

-9%

$151,750

-3%

$151,750

+19%

$137,250

-4%

$132,750

$166,635

+2%

$140,500

+33%

+2%

$154,250

-18%

$159,545

600

$163,800

644

$160,850

700

$120,000

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-36%

289

304 -7%

268 228

-24%

204

200

-12%

+11%

254

+5%

266

+9%

7/28/2008 3:10:30

$100,000

331

+14%

254

+27%

$80,000

$60,000

179

$40,000 100 $20,000

0

2002

2003

2004

2005

2006

2007

2008

2009

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

2010

2011

2012

2013

2014

2015

2016

2017

$0

(and duplexes and condominiums), we did not see any further market recovery in 2015 or 2016 when it comes to price, and in fact, the median sales price of these properties dropped slightly in 2016 to $149,500 -- down 1% from the median sales price of $151,750 in both 2014 and 2015.



Market Balance between Buyers and Sellers Assuming Six Months of Housing Supply is a Balanced Market

1000

800

SELLERS

860 849 839 831 822 813 801 791 780 770 757 744 730 718 705 694 686 679 674 664 656 646 641 637 635 632 631 628 624 622 617 618 622 625 628 630 631 633 633 635 635 634 633 631 627 625 622 616 612 607 608 609 611 610 610 609 606 599 592 603 619 635 631 648 655 656 656 660 660 668 662 721 722

900

BUYERS

600 500 400 300

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Over Supply = Buyer's Market

7/28/2008 3:10:30

A Relatively Balanced Market

373 386 389 389 397 397 401 403 401 406 407 416 422 416 425 444 432 436 447 447 462 472 477 486 496 503 509 492 507 510 502 496 482 484 491 495 491 504 515 518 521 518 527 535 543 547 560 554 565 560 559 565 560 570 570 577 581 593 600 584 578 569 556 542 530 516 505 491 476 461 446 444 433

700

SELLERS

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

Aug-17

Jun-17

Apr-17

Feb-17

Dec-16

Oct-16

Aug-16

Jun-16

Apr-16

Feb-16

Oct-15

Dec-15

Aug-15

Jun-15

Apr-15

Feb-15

Dec-14

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Oct-13

Dec-13

Aug-13

Jun-13

Apr-13

Feb-13

Dec-12

Oct-12

Aug-12

Jun-12

Apr-12

Feb-12

Oct-11

Dec-11

Aug-11

0

(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. In June 2016, these two trajectories crossed, and there was no turning back. There are now many more buyers buying in a six month period than there are homes for sale!



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

Price/SF $350,000

$140

$129

$127

$127 $117

$116

$120

Median Price Per SF $113 $101

$97

$100

$87

$227K $224K

$81

$210K

$80

$103

$105

$106

$136K

$113

$250,000

$215K

$203K

7/28/2008 3:10:30

$214K $195K

$184K

$195K $192K $190K

$224K

$200,000

$200K

Median Sales Price

$150,000

$147K $100,000

$40

$50,000

$20

$0

$300,000

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$170K $60

$108

$118

2002

2003

2004

2005

2006

2007

2008

2009

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

2010

2011

2012

2013

2014

2015

2016

2017

$0

similar to the trend shown in the single family home median sales price during the same time, which validates that assumed set of changes in home values. Over the past year+ (2015 to 2016 to 2017) we have seen increases in both the median sales price as well as the median price per square foot of single family homes.



Median Price Per Square Foot by Home Size Single Family Homes

0 - 1,499 SF

1,500 - 2,500 SF

2,500+ SF

150

140

$138 $132

130

$127 $123

120

$126 logo.indd 1

$121 $117

$117

$115 $108 $104

$105

100

$106

$115

$114

$111

$111

110

7/28/2008 3:10:30

$121

$105

$104

$106 $108

$101 $103 $96

$97

$119

$105 $101

$98

90

80

2008

2009

2010

2011

2012

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

2013

2014

2015

2016

2017

(2500+ SF) is a good bit lower ($108/SF) than that of homes with less than 1500 SF ($132/SF). These values cannot be used as an absolute standard against which the value of any home can be measured, but they can provide some helpful guidance when trying to determine the value of a home.



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

2,000

1,750

97.8%

98.1%

99.1%

99.1%

98.9%

98.0%

98.0%

1,669

96.0%

96.0%

96.0%

97.0%

97.0%

97.0%

100.0%

1,438

1,324 1,250

98.0%

95.0%

1,507

1,500

97.0%

98.0%

1,309

1,248 1,153

90.0%

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1,067 967

1,000

870 799

832

1,085

7/28/2008 3:10:30

1,122

900

851

85.0%

750 80.0% 500 75.0%

250

0

2002

2003

2004

2005

2006

2007

2008

2009

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

2010

2011

2012

2013

2014

2015

2016

2017

70.0%

escalating. Then, when the pace of home sales slowed (through 2010) we saw a decline in this metric to 96%, where we stayed for three years (2010, 2011, 2012). Sellers started selling for slightly more in 2013-2015 when they could obtain 97% of their list price. This increased to 98% in 2016 and thus far is holding steady in 2017.



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

200

186 200

180

$133

$147

$141

$140

$136

$129

$128

$129

150

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7/28/2008 3:10:30

109

$114

$105

80

$99

100

$130

121

120

$146

139

$137

140

137

$150

140

$144

158

160

84

60

41

40

100

82

45

51

54

47

43

38

50

20

0

2002

2003

2004

2005

2006

2007

2008

2009

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

2010

2011

2012

2013

2014

2015

2016

2017

0

since that time -- staying between 38 and 54 new home sales per year. This past year, however, was QUITE different. There were a total of 82 new home sales last year, exceeding the full year of sale seen for each of the past six years -- a welcome sign for new home builders! It is unclear whether 2017 will match that 2016 pace.


[4] BUYER ACTIVITY Harrisonburg & Rockingham County

Buyers Per Month Commiting to Buy Properties 180

158

160

141

140

133

123

118 109 102

100

99

77

97

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86 80

111

109

108

98

94

133 132

119

118

114

137

130

128

126

120

140

76

93

87

84

82 70

63

7/28/2008 3:10:30

74 67

63

67

60

40

Annual Pace: 1,272 contracts

20



Strong contract activity is typically an indicator of strong months of sales to come. After several strong months in a row in March, April, May and June of 2017 -contract activity fell off a good bit in July 2017. Buyers (and sellers) only signed 97 contracts in July 2017, which marks an 18% decline from last July. August contracts

Jul-17

Aug-17

Jun-17

May-17

Apr-17

Mar-17

Feb-17

Jan-17

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

Feb-15

Jan-15

Dec-14

Oct-14

Nov-14

Sep-14

Aug-14

0

certainly rebounded a bit (from 97 in July up to 111 in August) but did not hit the high seen last August (130) and thus we are likely to see a slower Fall season of home sales. Contract activity should continue into September and October in the 90 - 100 contract per month range.


[5] INVENTORY LEVELS Harrisonburg & Rockingham County

Inventory Levels (end of month)

700

635 636 640 600

619 560

570 532 539

581 582

568

549

500

560 532 480 451 413

400

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368

418 409 402 400 411 394 393

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 effect of many homeowners deciding to list their home for sale -- which may be a significant decision, but it is not

always so. Some homes that are on the market have been listed for sale by sellers who are “testing the market” and as a result, inventory levels can shift more quickly than home sales trends. Inventory levels have been declining drastically over the past year -- and are now 27% lower than they were one year ago.



Inventory Levels by Property Type Single Family Homes

Townhomes, Duplexes, Condos 300

500

481 485

493 445 408

400

418

430

439 436

416

392 392

250

435 403

22% Decline in Inventory

372 343

174 300

154 151 147

318 152 151 152 150 147

143

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311 312

327 327 325 320

341

200

7/28/2008 3:10:30

282 139

133

200

100

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

150

125 129 108 108 95

86

94

88

98 84

74

68


100

69 50

0

decreased by a startling 45% over the past year! All we can hope is that these inventory levels will start to climb again (??) as we continue through the Fall market, as there are many buyers in our local market who are anxious to buy, but not finding many properties that they would like to purchase.



Inventory Levels by Property Location City of Harrisonburg

Rockingham County

600

477

500

449 448

449 408 406 405

417

429 434 425 401

400

419

398


368 345

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322 322 313 314 312 313 314

321 281

300

200

7/28/2008 3:10:30

186 188

163 170

152

153 152 148 150 148 141 134 136 134

100

38% Decline in Inventory 112 106

92

87

92

86

89

89

104 80

88

0

Inventory levels have shifted much more dramatically in the City of Harrisonburg over the past two years as compared to in Rockingham County. We have seen nearly a 38% decline in the number of homes for sale in the City of Harrisonburg when comparing today to two years ago -- while inventory levels have only declined

by 23% in Rockingham County during that same timeframe. If finding a home to buy is difficult right now, it is even more difficult if you are looking in the City of Harrisonburg. Fewer and fewer homes are available to purchase.


[6] DAYS ON MARKET Harrisonburg & Rockingham County

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

> 1 year, 56, 4%

Harrisonburg & Rockingham County

Days on Market Analysis of Active Listings Active Residential Listings

> 1 year, 41, 10% < 30 days, 75, 18%

6 - 12 months, 149, 12%

3 - 6 months, 229, 18%

6 - 12 months, 67, 16%

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7/28/2008 3:10:30

< 30 days, 562, 44% 30 - 59 days, 89, 22%

3 - 6 months, 100, 24% 60 - 89 days, 118, 9%

60 - 89 days, 39, 10% 30 - 59 days, 171, 13%

Median Days On Market: 42

Median Days On Market: 90

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 42 days for homes that have sold in the past year. Remarkably, 44% 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 57% 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

55

54

54

54

54

55

54

55

56

58

58

57

59

59

58

60

60

60

60

60

60

60

59

59

58

+2% YOY

50 logo.indd 1

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40

30

25

25

25

27

27

27

27

27

27

27

28

28

28

29

29

30

31

31

31

32

31

33

32

33

33

+20% YOY

20

10

9.5

5.0

8.7

8.2

5.2

5.4

7.8

5.4

7.4 5.4

7.7

8.3

8.4

8.3

8.5

9.3

9.6

12.8 12.4 12.3 12.0 12.3 12.5 12.0 12.4 12.6 11.5 12.3 10.3 11.3

5.4

5.5

5.7

5.9

5.3

5.6

6.1

6.1

6.3

6.3

6.1

6.2

6.0

6.1

6.4

6.2

6.6

6.8

6.8

6.8

+32% YOY +11% YOY

0

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

most significant increase being in the $300K - $400K price range (+32% year-overyear), though the $200K - $300K price range has also seen significant increases in sales pace, with a 20% increase.



Inventory Levels by Price Range $0 - $200k

$200k - $300k

$300k - $400k

$400k +

350

302

311 313 314

300

283 261 264

274 256

250

200

248 234

178

190 173 172 168

174

229

221 217 202

182

172

182

157 154 153 156

50

84

71

79 73

80 75

73 64

65

55

69

48

66

56

76

64

176 143

78 73

75 69

80 72

75 73

82 75

77 72

7/28/2008 3:10:30

190

166

150

100

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71 64

136

64

141 127

62

147

117 116 114

73 60 66

61 48

137 133 133 136 137 130

75

125 107 99 82 85 82

74

71

69

76

132

124

84

86

65

69

-24% YOY -46% YOY +15% YOY -5% YOY

50

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 an astonishing 46% decline in inventory levels over the past year -- which is followed by a 24% decline in the $200K - $300K

price range. The only price range that is actually seeing a year over year increase in inventory levels is the $400K+ price range, where there are 15% more houses on the market today as compared to one year ago.



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

15

15 13

14 13

13 12

10

9

9 9

8

7

7 5

6

6

6 6

12

9

6 5

9 8

8

6 6

6

8

7

8

7

6

8

5

5

4

4

4

2

10

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12

13

+3% YOY

11

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10

6

6

4

6

6

6

5

12

7

6 5

13

12 11

10

9

7

7

13

11 10

4

14

12

12

$400k +

Entire Market: 3.9 Months of Housing Supply 433 Active Listings 12-Month Average of 111 Sales/Month

14

6

$300k - $400k

17

16

8

$200k - $300k

4

6

6

6 6

5

5 3

5 3

4

4

4

4

4

4

2

2

2

3

4

2

4

2

4

2

5

5

4

4

2

2

-28% YOY -37% YOY -47% 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 in our local real estate market. The graph above illustrates that while it would take 13 months to sell all of the homes currently for sale over $400K if the same number of buyers

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

150

$32,208

200

$54,500

$58,000

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$59,650

$53,950

$54,900

$56,500

$54,500

$55,000

$56,600

247

$54,500

250

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$42,000

261

$80,000

$59,900

304 300

Stability

$40,000

Decl

111

100

$60,000

ine

85

83

75 58

64

62

63

2010

2011

2012

84

78

64

59

2016

2017

$20,000

50

0

2002

2003

2004

2005

2006

2007

2008

2009

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

2013

2014

2015

$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 -- and it seems nearly certain that we will see an overall increase in these lot sales in 2017 based on the 59 sales seen thus far in 2017.



Price Distribution of Active Lot Inventory less than 1 acre

$100k + 33 listings 19%

$0 - $40k 37 listings 21%

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$80k - $100k 33 listings 19%

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$40k - $60k 40 listings 23%

$60k - $80k 34 listings 19%

177 Active Lot Listings; Median List Price: $69,900

Despite the fact that only 64 lots (of less than an acre) sold in all of 2016, there are a remarkable 177 lots currently for sale. Some sanity exists in this listing market, however, as the median list price of lots for sale ($69,900) 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 2.8 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

$15,986

$20,000

$15,000

$10,000

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$15,171

$13,240

$14,981

$15,000

$15,964

$25,000

$9,932

$9,535

120

$8,333

140

$12,003

160

$15,000

$17,713

168

$13,957

180

$30,000

$20,833

$24,184

200

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$10,000

100

87 77

76

80

$5,000

83 70 57

60

51

44 40

66

73 60

58 49

-$5,000

28 -$10,000

20

0

$0

2002

2003

2004

2005

2006

2007

2008

2009

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

2010

2011

2012

2013

2014

2015

2016

2017

-$15,000

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



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

$100k + 23 listings 10%

$75k - $100k 11 listings 5%

$0 - $10k 53 listings 24%

$50k - $75k 11 listings 5% logo.indd 1

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$30k - $50k 26 listings 12%

$20k - $30k 33 listings 15%

$10k - $20k 60 listings 28%

217 Active Land Listing; Median List Price: $19,222 / Acre

Despite the fact that only 73 parcels of land (of one acre or more) sold in all of 2016, there are a remarkable 217 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 217 parcels for sale is currently $19,222 per acre.

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

1,309

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

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1,122

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1,013

1,000

936 864

816

758

800

851

794

600

400 270 200 63 0

2002

75

2003

70 2004

86

2005

93

2006

97

2007

177

118

2008

2009

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

2010

223

2011

252

2012

222

2013

163

2014

139

2015

136

2016

87

2017

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


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

6.00%

3.00% Aug-14

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Aug-15

Aug-16

3.82%

3.92%

3.88%

3.95%

4.03%

4.14%

4.16%

4.19%

4.32%

4.03% 3.47%

3.42%

3.50%

3.43%

3.48%

3.48%

3.64%

3.66%

3.71%

3.79%

3.62%

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%

4.50%

4.10%

5.00%

3.98%

5.50%

Aug-17

7/28/2008 3:10:30

Harrisonburg-Rockingham MSA

Unemployment Rate

Jul-15

As shown in the top graph above, for most of the past three years, home buyers have seen tremendously low interest rates -- almost always under 4%. After jumping up above 4% in early 2017, interest rates have been steadly declining over the past eight months, and now are back below 4.0%. The second graph above illustrates

4.0%

4.2%

3.9% 3.3%

3.6%

3.7%

3.9%

3.6%

3.8%

4.2%

4.2%

Jul-16

4.0%

4.4%

4.4% 3.8%

4.1%

4.0%

3.2%

3.50% 3.00% Jul-14

4.3%

3.9%

4.1%

3.9%

4.00%

4.0%

4.4%

5.0%

5.5%

5.4% 4.4%

5.0%

5.1%

4.8%

4.4%

4.50%

4.1%

5.00%

5.0%

5.50%

4.8%

5.5%

6.00%

5.5%

Not Seasonally Adjusted

Jul-17

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


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

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

Everything You Need To Know About Buying a Home BuyingAHomeInHarrisonburg.com

Local Online Real Estate Resources

Scott P. Rogers, a professional, responsive, knowledgeable, friendly 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. 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. A native of Montgomery County, Maryland, 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, a quadcopter (drone), property websites for each of his listings, 3D Walk Through technology and Virtual Reality. 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, HarrisonburgAssessments.com, HarrisonburgPropertyTransfers.com, HarrisonburgTownhouses.com, BuyingAHomeInHarrisonburg.com, SellingAHomeInHarrisonburg.com and HarrisonburgRealEstateResources.com. Scott is a member of the Shenandoah Valley Builders Association, serves on the Board of Directors for the Shenandoah Valley Children’s Choir, is the co-founder of TakeThemAMeal.com and PerfectPotluck.com, serves as a Trustee for Asbury United Methodist Church and coaches middle school volleyball. 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, playing volleyball and attending JMU sporting events.

Marketing Strategies for Successing Selling Your Home SellingAHomeInHarrisonburg.com Central Shenandoah Valley Property Search ScottPRogers.com Monthly Real Estate Market Reports HarrisonburgHousingMarket.com Ongoing Housing Market Analysis & Commentary HarrisonburgHousingToday.com Analysis of Real Estate Investment Options in Harrisonburg HarrisonburgInvestmentProperties.com

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Comprehensive Data on Area Townhouse Communities HarrisonburgTownhouses.com The Most Realistic, Immersive Way to Experience a Home WalkThroughThisHome.com Analysis of Property Assessments HarrisonburgAssessments.com Listings With Low List Prices Compared to Assessed Values BestDealsInHarrisonburg.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