Harrisonburg & Rockingham County Real Estate Market Report ...

NOVEMBER 2016 Harrisonburg & Rockingham County Real Estate Market Report An analysis of real estate activity through October 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

November 11, 2016

2013

2014

2015

2016

% Change ('15 - '16)

October

93

112

105

94

-10.48%

Year-To-Date (Jan-Oct)

909

917

963

1,099

14.12%

Last 12 Months (Nov-Oct)

1067

1,075

1,127

1,262

11.98%

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Median Sales Price

7/28/2008 3:10:30

2013

2014

2015

2016

% Change ('15 - '16)

October

$145,000

$189,950

$182,000

$191,200

5.05%


$175,000

$178,000

$186,000

$192,000

3.23%


$175,000

$177,000

$185,000

$190,000

2.70%

2013

2014

2015

2016

% Change ('15 - '16)

October

73

64

65

59

-9.23%


67

66

57

52

-8.77%


68

63

59

51

-13.56%

Median Days on Market

Home sales slowed a bit (-10.48%) in October 2016 in Harrisonburg and Rockingham County as compared to last October. This slight decline did not, however, wipe out the significantly higher pace of home sales we have seen thus far in 2016. There have been a total of 1,099 home sales in the first ten months of 2016 as compared to

only 963 home sales during the same timeframe last year. The median price of these home sales is also improving -- showing a 3.23% year-over-year improvement from $186,000 in 2015 to $192,000 in 2016. Finally, homes are selling (13.56%) more quickly this year -- at a median pace of 51 days on the market.

Published on October 11, 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 of 01/01/2000 - 09/30/2016.

[1] MARKET SUMMARY

HOME SALES REPORT :: BY AREA City of Harrisonburg

Rockingham County

# Home Sales

2015

2016

% Change

2015

2016

% Change

October

35

30

-14.29%

70

64

-8.57%

Year-To-Date

317

374

17.98%

646

725

12.23%

. Rockingham County

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City of Harrisonburg

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Median Sales Price

2015

2016

% Change

2015

2016

% Change

October

$167,000

$145,500

-12.87%

$191,000

$214,250

12.17%

Year-To-Date

$165,000

$168,000

1.82%

$195,000

$200,000

2.56%

City of Harrisonburg

Rockingham County

Median Days on Market

2015

2016

% Change

2015

2016

% Change

October

66

42

-36.36%

63

77

22.22%

Year-To-Date

53

35

-33.96%

59

63

6.78%

Home sales have increased slightly more in the City (+18%) than in the County (+12%) when looking at the first ten months of the year -- though median prices have risen more in the County (+2.56%) than in the City (+1.82%) during that same timeframe. Homes are selling much faster in the City (median of 35 days) as compared to the

County (median of 63 days). While the majority of home buyers purchase in the County (725 vs. 374 so far this year), as stated, we are seeing the number of buyers in the City increase more quickly than that pace is changing in the County.


[2] RECENT TRENDS Harrisonburg & Rockingham County

Month-By-Month Home Sales History 175 2013

158

2014

150

151

2015

133

Single Family, Townhome & Condo Sales

2016

134

125

104 101

100

85 75

50

67

72 68

56 49

53

JAN

FEB

49

68

72

110

107 104

93

111

125 118 114 108

116 106

100

111 logo.indd 1

97

October 2016 94 Home Sales

81

128

126

112 105

7/28/2008 3:10:30

97 93

94 93

83

79

71

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. As you can see, the 94 home sales seen in October 2016 does not stand out from the pack -- it is a smaller number of October sales than seen in either of

JUL

AUG

SEP

OCT

NOV

DEC

the past two months of October. However, do not forget, we saw (mind-boggling) record months of home sales in August and September that were far and above the same months in previous years. As such, it is not totally surprising that home sales slowed a bit in October. I expect them to rise again in November.



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

500

542

400

462

300 200 100 0

664

734 618

497

500

400

299

308

226

228

146 79 40

154 87 41

2011

2012

1,041 962 857 760

1,099 1,005 877

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592

383

808

1,125

400 296 192

697 591 466 355 248

634

605

526 392 282 189

121 49

167 109 46

117 49

2013

2014

2015

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

719

454 321 220 135 67

DEC NOV OCT SEP AUG

7/28/2008 3:10:30

JUL JUN MAY APR MAR FEB JAN

2016

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). Given the pace of sales in 2016 thus far, it seems clear that we will easily soar past last year’s total of 1,125 home sales -- perhaps as far as to 1,250 home sales this year?? Or even 1,300?



Time-Adjusted Home Sales Trends :: All Homes $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

$177,000

$176,500

$174,321

$174,700

$173,000

$174,900

$176,500

$175,000

$175,000

$175,000

$175,000

$175,000

$175,200

2,000

$174,800

2,500

$189,000

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

$200,000

$190,000

$180,000

$170,000

Stable Prices 1,273

1,262

1,242

1,210

1,204

1,187

1,164

1,156

1,143

1,143

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

1,058

1,040

1,030

1,033

1,022

1,019

1,055

1,042

1,074

1,067

1,035

1,067

1,125

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1,500

$160,000

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$150,000

$140,000

1,000

$130,000

$120,000

500

$110,000

0 Oct-13

Oct-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

Oct-15

$100,000 Oct-16

the past 24 months we have seen relatively consistent increases in the annual pace of home sales, which has now risen to just over 1,260 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 risent to $190,000.


[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%

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967

1,067

+2%

+19% -10%

870

-8%

799

+4%

832

+8%

+2%

+4%

1,085

1,122

+3%

$192,000

$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%

$200,000

1,099 $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 (2015) marks the fifth (!) year in a row when we have seen an increase (+3%) in

2009

2010

2011

2012

2013

2014

2015

2016

$0

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%

$214,000

$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

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 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

-$25,000

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

$160,000

$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%

n/c

450

$134,950

500

+11%

$149,000

-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%

281

$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 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

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. The median sales price of these properties was again $151,750 -- the exact same median sales price we saw in 2014. Thus far in 2016 we are seeing continued stability around a $150K +/- median sales price.



Market Balance between Buyers and Sellers 1000 900

932 932 931 929 924 913 904 893 881 870 860 849 839 831 822 813 801 791 780 770 757 744 730 718 705 694 686 679 674 664 656 646 641 637 635 632 631 628 624 622 617 618 622 625 628 630 631 633 633 635 635 634 633 631 627 625 622 616 612 607 608 609 611 610 610 609 606 599 592 603 619 635 629

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

394 381 379 376 368 374 372 370 352 365 373 386 389 389 397 397 401 403 401 406 407 416 422 416 425 444 432 436 447 447 462 472 477 486 496 503 509 492 507 510 502 496 482 484 491 495 491 504 515 518 521 518 527 535 543 547 560 554 565 560 559 565 560 570 570 577 581 593 600 584 578 569 556

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

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

Oct-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 (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

$127 logo.indd 1

$121 $117

$119

7/28/2008 3:10:30

$121

$117

$115

$114

$108

110

$104 $105

100

$106

$112

$111

$111

$105

$104

$106 $107

$101 $103 $96

$97

$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 ($107/SF) than that of homes with less than 1500 SF ($127/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%

100.0%

95.0%

1,507

1,500

97.0%

98.0%

1,438

1,324 1,248

1,250

1,153

90.0%

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1,071

1,067 967

1,000

870 799

832

1,085

1,122

7/28/2008 3:10:30

1,099

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. Of 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. And now, after several years hovering at 97%, this metric has shifted back up to 98% based on data from the first ten months of 2016.



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

200

186 200

180

$133

$142

$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

100

84 73

60

41

40

45

51

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 year, however, seems to be QUITE different. We have now seen 73 new home sales in only the first ten months of the 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

80

91

118

112

109 102

77

68

99

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86

75

70

109

108

98

94

91

119

118

114

130

128

126

76

7/28/2008 3:10:30

84

82 70

63

74 67

56

60

40

Annual Pace: 1,312 contracts 20

Annual Pace: 1,199 contracts

Annual Pace: 1,175 contracts

This graph clearly illustrates what a busy buying season it has been over the past eight months. We have seen an average of 127 contracts per month over the past seven months -- as compared to an average of only 107 contracts per month during the same timeframe in 2015. These strong contract numbers, clearly, are leading

Oct-16

Sep-16

Aug-16

Jul-16

Jun-16

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Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Oct-15

Nov-15

Sep-15

Aug-15

Jul-15

Jun-15

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Apr-15

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Feb-15

Jan-15

Dec-14

Nov-14

Oct-14

Sep-14

Aug-14

Jul-14

Jun-14

May-14

Apr-14

Mar-14

Feb-14

Jan-14

Dec-13

Nov-13

Oct-13

0

to the busy season of closings -- and we are likely to see yet another strong month of sales in November based on the uptick in contracts we see (above) in October 2016. We are likely to see contract activity start to decline as we continue through November and into December.


[5] INVENTORY LEVELS Harrisonburg & Rockingham County

Inventory Levels (end of month)

700

636 600

623

604

659 653 644 635 636 640

577 538 542 541

619 560

570 532 539

500

400

581 582

568

549

560 532 480

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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 25% down from a year ago.



Inventory Levels by Property Type Single Family Homes

Townhomes, Duplexes, Condos

600 250

501 500

478

477 445

440 382

400

487 481 485 493

391

230

445 408

405 381

418

430

439 436

416

435 403

392 392

210

372 logo.indd 1

172

300

158

164 156

160 151

178

7/28/2008 3:10:30

190

182 174 166 157

170

154

151

200

147

152 150

147

152 151 143

139

150

133 125

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 25% over the past year, while the number of townhouses, duplexes and condos for sale has

129

130

108

110

90

decreased by 27% over the past year. As is evident, inventory levels are much lower in the Winter market, and we are likely to see further declines in inventory levels over the next few months as we continue into the winter real estate market.



Inventory Levels by Property Location City of Harrisonburg

Rockingham County

600

500

454

461 438

432 388 382

400

478

477 454 449 448

449 408 406 405

396

417

429 434 425 401

419

398

372

368 logo.indd 1

-23% YOY

7/28/2008 3:10:30

300

200

182

172

150

160

169

181 185

198

189 190 186 188

100

163 170

152

136 134

153 152 148 150 148 141 134

112

-31% 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 (-31%) over the last year in the number of properties for sale, while in the County, there has been a slightly smaller (-23%)

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

> 1 year, 55, 4%

Harrisonburg & Rockingham County

Days on Market Analysis of Active Listings Active Residential Listings

> 1 year, 57, 12% < 30 days, 84, 17%

6 - 12 months, 198, 16%

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< 30 days, 482, 38%

7/28/2008 3:10:30

6 - 12 months, 87, 18% 30 - 59 days, 58, 12%

3 - 6 months, 209, 16%

60 - 89 days, 62, 13% 3 - 6 months, 132, 28%

60 - 89 days, 121, 10% 30 - 59 days, 197, 16%

Median Days On Market: 51

Median Days On Market: 113

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 51 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 54% of homes that sell go under contract within 60 days. The graph to the right, above, shows the length of time that each active listing has been on the market for sale.


[7] MARKET SEGMENTS Harrisonburg & Rockingham County

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

$0 - $200k

$200k - $300k

$300k - $400k

$400k +

70

60

52

52

53

52

52

53

53

52

54

54

55

54

54

54

54

55

54

55

56

58

58

57

59

59

58

+7% YOY

50 logo.indd 1

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40

30

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

28

29

29

27

27

27

27

27

28

28

8.4

8.3

8.5

9.3

9.6

11.5 10.3 11.3

7.7

8.3

5.6

6.1

6.1

+15% YOY

20

10

0

3.3

3.7

3.9

10.3 10.3 10.3 10.5 10.8 10.7

4.2

4.3

4.5

4.5

5.1

4.8

4.8

5.0

5.2

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

5.4

7.8

5.4

7.4

5.4

5.4

5.5

5.7

5.9

5.3

6.3

6.3

+41% YOY +15% YOY

most significant increases being in the $300K - $400K price range (+41% year-overyear) and $400K+ range (+15% year-over-year). The other two price ranges (under $200K, $200K - $300K) have seen a 7% and 15% increase, respectively.



Inventory Levels by Price Range $0 - $200k

$200k - $300k

$300k - $400k

$400k +

350

316 300

294 290

321 300 299 302

287

311 313 314 283

269 272 265

261 264

274 256

250

248 234

229

221 217 202

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200

188

180 158 155

172

171

177

190

182 178

157

190 173 172 168

174

182

172

182

50

83

71

88 71 63

57

58

54

57

70 53 52

63

83

83

84

68 67

73

80

80

71

79 73

80 75

73 64

65 55

69

48

66 56

76

143

64

78 73

75 69

80

75

72

73

-35% YOY

166

157 154 153 156

150

100

7/28/2008 3:10:30

82 75

77 72

71 64

-17% YOY

-11% YOY -15% 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 (-35%) in inventory levels over the past year -- while all other price are seeing a year-over-year decline

in inventory, but a decline that is less than 20%. All four price ranges are likely to see some further decreases in inventory levels over the next few months as we continue into the winter real estate market.



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

$200k - $300k

$300k - $400k

$400k +

25

21 20 17

15

17

14

14

14

15

17

Entire Market: 5.4 Months of Housing Supply 560 Active Listings 12-Month Average of 103 Sales/Month

17 15

14

15

13

12

10

9

9

8

9 7 5

6

6

6

5

8 6

5

8

5

5

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13

14

14

7 7

5

8 6

6

8

8 6

8 8

6

9

8 7

8 6

7

9

7

7 5

6

6

9

9

6

6 5

12 11

10 9 9

6

13 12

12 10

7/28/2008 3:10:30

6 5

8

6 5

9 8

6 5

8

8

8

6 7 5

4

7

4

6 4

7

6

4

6

6 4

6

5 3

-23% YOY

-39% YOY -27% YOY -40% 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 11 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 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

Stability

85

83

75 58

$40,000

64

62

63

2010

2011

2012

84

78 51

50

2001

2002

2003

2004

2005

2006

$60,000

Growth

111

100

0

7/28/2008 3:10:30

$54,000

$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

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

2013

2014

2015

2016

$20,000

$0

$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 increases to 100+ sales per year in the coming years. Of note, the pace of these sales thus far this year is not looking promising.



Price Distribution of Active Lot Inventory less than 1 acre

$100k + 15 listings 10%

$80k - $100k 18 listings 12%

$0 - $40k 34 listings 23%

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$60k - $80k 31 listings 21% $40k - $60k 47 listings 32%

145 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 145 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 1.8 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 (2011-2015) median sales prices.



Land Sales & Median Price Per Acre 1 acre or more

107

$10,223

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$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 58

57

49 -$5,000

28 -$10,000

20

0

$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

2009

2010

2011

2012

2013

2014

2015

2016

-$15,000

over one acre seen anytime in the past six years. At this point, we seem poised to see a similar (or slightly smaller) number of these sales in 2016, and median price per acre is likely to drop back down again to the $10K - $12K range.



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

$75k - $100k 4 listings 2%

$100k + 16 listings 9%

$50k - $75k 11 listings 6%

$0 - $10k 49 listings 27%

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$30k - $50k 29 listings 16%

$20k - $30k 26 listings 14%

$10k - $20k 48 listings 26%

183 Active Land Listing; Median List Price: $18,935 / Acre

Despite the fact that only 66 parcels of land (of one acre or more) sold in all of 2015, there are a remarkable 183 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 183 parcels for sale is currently $18,935 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 1,153

1,200 1,071

1,085

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1,122

1,099

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

177

2009

2010

223

2011

252

2012

222

2013

163

2014

139

2015

117

2016

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 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%

3.00% Oct-13

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Oct-14

Oct-15

3.47%

3.43%

3.50%

3.42%

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%

3.69%

3.68%

3.80%

3.66%

4.00%

3.87%

3.97%

3.98%

4.20%

4.12%

4.10%

4.14%

4.12%

4.33%

4.40%

4.37%

4.48%

4.32%

4.50%

4.10%

5.00%

4.29%

5.50%

Oct-16

7/28/2008 3:10:30

Harrisonburg-Rockingham MSA

4.0%

4.2%

4.4%

4.4% 3.8%

4.1%

4.0%

4.3%

3.2%

3.50% 3.00% Sep-13

3.9%

4.1%

4.00%

3.9%

4.0%

4.4%

5.0%

5.5%

5.4%

5.1%

5.0%

4.8%

4.4%

4.1%

4.4%

4.8%

5.0%

5.5%

5.5%

5.6%

5.3%

5.2%

4.9%

4.7%

Not Seasonally Adjusted

4.1%

4.50%

4.4%

5.00%

4.7%

5.50%

5.0%

6.00%

5.3%

Unemployment Rate

Sep-14

As shown in the top graph above, home buyers have seen steadily (though slowly) declining mortgage interest rates over the past several years to current levels that are the lowest we have EVER seen. The second graph above illustrates trends in the local unemployment rate -- which has shown a general downward trend over the

Sep-15

Sep-16

past several years, and dropped to its lowest level (3.2%) in April 2016 that we have seen in many years. 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 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