Harrisonburg & Rockingham County Real Estate Market Report ...

SEPTEMBER 2018 Harrisonburg & Rockingham County Real Estate Market Report An analysis of real estate activity through August 31, 2018 provided courtesy of Scott P. Rogers, Funkhouser Real Estate Group

Four Bedroom Colonial on Large Lot in Lakewood Estates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1285CumberlandDrive.com

[1] MARKET SUMMARY

HOME SALES REPORT Harrisonburg & Rockingham County

August 2018

# Home Sales

2015

2016

2017

2018

% Change ('17 - '18)

August

126

158

120

114

-5.00%

Year-To-Date (Jan - Aug)

761

879

856

897

4.79%

1,148

1,244

1,290

1,303

1.01%

Last 12 Months (Sep - Aug)

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Median Sales Price

7/28/2008 3:10:30

2015

2016

2017

2018

% Change ('17 - '18)

August

$182,500

$185,750

$203,200

$205,500

1.13%


$187,200

$190,000

$196,500

$214,900

9.36%


$185,000

$186,000

$196,350

$210,000

6.95%

2015

2016

2017

2018

% Change ('17 - '18)

August

55

38

37

13

-64.86%


59

51

32

21

-34.38%


61

51

42

26

-38.10%

Median Days on Market

Home sales slowed slightly in August with a 5% decline in August 2018 as compared to August 2017 -- though the year-to-date pace of home sales is still 4.79% higher than during the first eight months of last year. Median sales prices are also still on the rise -- with a 9.36% increase in the median sales price when comparing the first

eight months of this year to the first eight months of last year. The speed of home sales also continues to increase -- with a 34.38% decline in median days on market between last year and this year. So -- more sales, at higher prices, more quickly!

Published on September 10, 2018 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 - 08/31/2018.

[1] MARKET SUMMARY

HOME SALES REPORT :: BY AREA City of Harrisonburg

Rockingham County

# Home Sales

2017

2018

% Change

2017

2018

% Change

August

39

41

5.13%

81

73

-9.88%


428

447

4.44%

862

856

-0.70%

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7/28/2008 3:10:30

City of Harrisonburg

Rockingham County

Median Sales Price

2017

2018

% Change

2017

2018

% Change

August

$183,000

$201,000

9.84%

$220,000

$210,000

-4.55%


$167,500

$193,000

15.22%

$212,385

$219,500

3.35%

City of Harrisonburg

Rockingham County

Median Days on Market

2017

2018

% Change

2017

2018

% Change

August

34

11

-67.65%

43

15

-65.12%


29

13

-55.17%

48

35

-27.08%

Each year, twice as many (+/-) homes sell in the County as compared to the City, and looking at the past 12 months (and comparing it to the previous 12 months) we see that pattern yet again with 447 City home sales compared to 856 County home sales. Over the past year, the pace of sales has increased 4% in the City, but declined 1% in

the County -- while the median sales price has increased in both areas. The median sales prices has increased quite a bit more in the City (+15%) than in the County (+3%) but the City median sales price ($193,000) remains quite a bit lower than in the County ($219,500).


[2] RECENT TRENDS Harrisonburg & Rockingham County

Month-By-Month Home Sales History 174

175 2015 2016 150

149

2017

Single Family, Townhome & Condo Sales

2018

133 130

158

152 138 134

130

125

105 100

100

94 81 75

50

69 67 63

117 115

110

119 114

108

101 100

129

126

113 logo.indd 1

105 97

93

105

98 97

85

69 68

72

FEB

MAR

7/28/2008 3:10:30

100

79

103 95 84

August 2018 114 Home Sales

68

49

25

0

JAN

APR

MAY

JUN

June’s 174 home sales were the third highest month of home sales EVER in Harrisonburg and Rockingham County, trailing only behind two exciting months (August 2005 = 183 sales, June 2006 = 192 sales) during the real estate boom. After such a wild month of home sales, sales continued to stay strong in July 2018 -- with

JUL

AUG

SEP

OCT

NOV

DEC

the best July in at least the past four years -- but August sales then slowed quite a bit, down to 114 home sales in August -- the slowest month of August seen in the past four years. We are likely to see a relatively similar (maybe slightly higher or lower) month of home sales in September.



Monthly Cumulative Residential Sales 1400 1300

1,313

1200

1,218

1100

1,067

1000

1,085

974

988

900

910

920

800

839

817

700

743

808

600

664

900

500 400 300 200 100 0

734

592

618

497

500

400

400

308

296

697 591 466 355

228 154 87 41

192 121 49

248 167 109 56

2012

2013

2014

1,125 1,041 962 857 760 634

1,105 1,008

282

1,261

NOV

1,158

OCT

1,058 960 logo.indd 1

879

855

721

736

SEP 897

AUG

783

JUL

606

619

653

454

481

479

321

332

349

526 392

DEC

JUN MAY

189 117 49

220

232

244

135 67

138 69

144 63

2015

2016

2017

2018

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 in 2016, and then a

7/28/2008 3:10:30

APR MAR FEB JAN

modest decline between 2016 and 2017. This graph also shows us a longer monthby-month history, so we can see that the 779 home sales seen in January-July 2018 is the highest total home sales seen in the first seven months of any year looking back all the way to 2012.



Time-Adjusted Home Sales Trends :: All Homes $210,000

$210,000

$206,000

$203,000

$200,000

$199,900

$199,882

$198,500

$198,250

$196,125

$196,500

$195,000

$194,500

$193,000

$192,700

$190,000

$192,000 $192,000

$192,000

$192,500

$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

1,600

$185,000

1,800

$190,000

2,000

$210,000

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

$210,000

$200,000

?

$190,000 logo.indd 1

$180,000

?

1,303

1,308

1,295

1,278

1,259

1,273

1,267

1,255

1,261

1,253

1,266

1,289

1,265

1,328

1,326

1,340

1,324

1,316 1,325

1,315

1,313

1,268

1,276

1,244

1,212

1,205

1,187

1,164

1,156

1,143

1,143

1,125

1,138

1,127

1,134

1,148

1,400

1,302

Stable

1,200

$220,000

7/28/2008 3:10:30

$170,000

$160,000

$150,000

$140,000

1,000

$130,000

800 Aug-15

Aug-16

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-17

$120,000 Aug-18

basis. Over the past three years we saw consistent increases in the annual pace of home sales up until May 2017, when the pace of sales started slowing down. The median sales price has been steadily increasing for a year and a half and has now been at or above $200,000 (and often rising quickly) for six straight months.


[3] LONG TERM TRENDS Harrisonburg & Rockingham County

Home Sales & Price Trends Single Family Homes & Townhomes

$250,000

+14%

1,200

1,000

800

$127,700

+17%

$149,000

+14%

-6%

1,248

+1%

+2%

1,067

1,085

+2%

+3%

$198,250

$192,500

$185,000

+4%

+4%

$200,000

1,309

-4% 1,260

+17%

-23%

967

+2%

$178,000

-13%

-3%

$175,000

-5%

$172,375

n/a

$169,900

+1%

$179,900

1,324

$169,900

1,400

$185,000

1,438

+14%

$195,000

-14%

1,507

$192,983

1,600

$195,100

1,669 +11%

$214,900

1,800

1,122

+3%

$150,000

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+19% -10%

870

-8%

799

+4%

832

+8%

900

7/28/2008 3:10:30

897

$100,000

600

400

$50,000

200

0

2003

2004

2005

2006

2007

2008

2009

2010

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). After six years in a row (2011-2016) of an increasing pace of home sales, we then saw a 4%

2011

2012

2013

2014

2015

2016

2017

2018

$0

decline in the pace of home sales in 2017. This was accompanied, however, by a 3% increase in the median sales prices, which continues the now six year (2012-2017) trend of increasing median sales prices, and we have now reached the highest annual median sales price ever seen in Harrisonburg and Rockingham County.



Home Sales & Price Trends Single Family Homes

1,400

1,000

+24%

880

+7%

978 +20%

813

798

819

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n/c

$230,000 $225,000

-9%

$175,000

890

818

7/28/2008 3:10:30

+21%

-15%

678

+1%

+5%

$224,600

$214,000

$200,000

+5%

909

$170,000

+16%

-1%

$190,000

-2%

$192,000

+6%

-12%

$147,000

600

-6%

-11%

+16%

800

-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

-11%

602

-1%

595

+10%

653

+3%

672

650

$125,000

$75,000 400

$25,000

200

0

2003

2004

2005

2006

2007

2008

2009

2010

The single family home market in Harrisonburg and Rockingham County improved significantly between 2015 and 2016 with a 20% increase in the number of homes sold and an accompanying 7% increase in the median price of those homes. Last year proved to be a bit of a different year -- with a 9% decline to only 890 homes

2011

2012

2013

2014

2015

2016

2017

2018

-$25,000

selling in the year -- though the median sales price continued to rise, from $214,000 up 5% to $224,600. Now, in 2018, we are seeing further increases in that median sales price and we have surpassed the past peak of $226,800 seen in 2006.



Home Sales & Price Trends Duplexes, Townhomes & Condos

483

+9%

444

+14%

$108,200

300

$118,500

+10%

400

-6%

-15%

+3%

$167,000

$159,800

+7%

$180,000

$160,000

$140,000

450

$134,950

500

-1%

$149,500

529

+11%

n/c

$151,750

-9%

$151,750

-3%

$137,250

-4%

$132,750

$166,635

+2%

$140,500

+33%

+2%

$154,250

-18% +19%

$159,545

600

$163,800

644

$160,850

700

$120,000

logo.indd 1

-36%

+12%

289

304 -7%

370 $100,000

331

+14%

268 -24%

204

200

+9%

228 -12%

+11%

254

+5%

7/28/2008 3:10:30

266

247

+27%

$80,000

$60,000

179

$40,000 100 $20,000

0

2003

2004

2005

2006

2007

2008

2009

2010

Townhouse (and duplexes and condo) sales are on a roll! Last year marked the sixth year in a row that we have seen an increase in the number of these sales in Harrisonburg and Rockingham County, with 370 sales -- up 12% from the prior year. In even better news, the median sales price of these townhouses, duplexes and

2011

2012

2013

2014

2015

2016

2017

2018

$0

condominiums has risen 7% over the past year from $149,500 up to $159,800. We still have not returned to the peak median sales price seen in this property category between 2006 and 2008, and we are likely never (or not for a long while) to see a return to over 600 of these sales per year, as was seen in 2005.



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

900

730 422 718 416 705 425 694 444 686 432 679 436 674 447 664 447 656 462 646 472 641 477 637 486 635 496 632 503 631 509 628 492 624 507 622 510 617 502 618 496 622 482 625 484 628 491 630 495 631 491 633 504 633 515 635 518 635 521 634 518 633 527 631 535 627 543 625 547 622 560 616 554 612 565 607 560 608 559 609 565 611 560 610 570 610 570 609 577 606 581 599 593 592 600 584 603 578 619 569 635 556 631 542 648 530 655 516 656 505 656 491 661 476 660 461 668 446 663 435 664 423 645 411 633 401 633 390 627 379 631 372 628 363 634 356 637 349 639 345 630 341 648 335 654 330 652

800

SELLERS

700

600

BUYERS

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Balanced Market

Over Supply = Buyer's Market

500

400

7/28/2008 3:10:30

Strong Seller's Market

BUYERS

SELLERS

300

200

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-18

Jun-18

Apr-18

Feb-18

Dec-17

Oct-17

Aug-17

Jun-17

Apr-17

Feb-17

Oct-16

Dec-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

100

(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 are now many more buyers buying in a six month period than there are homes for sale -- though the buing pace is leveling off.



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 $210K

$80

$103

$105

$113

$215K

$203K

$214K $195K

$184K

$195K $192K $190K

$122

$225K

$230K $200,000

$150,000

$100,000

$40

$50,000

$20

$0

7/28/2008 3:10:30

$200K

Median Sales Price

$147K

$300,000

$250,000

logo.indd 1

$170K $60

$106

$108

$118

2003

2004

2005

2006

2007

2008

2009

2010

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

2011

2012

2013

2014

2015

2016

2017

2018

$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 several years (2015 to 2016 to 2017) we have seen increases in 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

$145

140

$132 130

$127

$126 logo.indd 1

120

$117

$115

$104 100

$106

$115

$114

$108

$105

$119

$121

$111

$111 110

7/28/2008 3:10:30

$121

$121

$105

$104

$106

$101 $103 $96

$97

$105

$107

$109

$101

$98

90

80

2009

2010

2011

2012

2013

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 2018 figures, this graph illustrates that the median price per square foot of larger homes

2014

2015

2016

2017

2018

(2500+ SF) is a good bit lower ($109/SF) than that of homes with less than 1500 SF ($145/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

98.1%

99.1%

1,750

99.1%

98.9%

98.0%

98.0%

1,669

96.0%

96.0%

96.0%

97.0%

97.0%

97.0%

98.0%

99.0%

100.0%

95.0%

1,507

1,500

97.0%

98.0%

1,438

1,324

1,309

1,248

1,250

1,260

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

897

85.0%

750 80.0% 500 75.0%

250

0

2003

2004

2005

2006

2007

2008

2009

2010

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

2011

2012

2013

2014

2015

2016

2017

2018

70.0%

escalating. Then, when the pace of home sales slowed (through 2010) this metric dropped to 96%, where it stayed for three years. Sellers started selling for slightly more in 2013-2015 when they could obtain 97% of their list price. This increased to 98% in 2016, held steady in 2017, and has returned to 99% in 2018.



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

200

186 200

180

80

$149

$149

$141

$140

$136

$129

$128

$129

150

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7/28/2008 3:10:30

109

$114

$105

100

$130

$146

$150

121 $133

120

139

$137

140

140

$144

158

160

84

82

100

77 62

60

41

40

45

51

54

47

50

38

20

0

2003

2004

2005

2006

2007

2008

2009

2010

New home builders experienced a steady decline in new home sales between 2005 and 2010 -- dropping 78% from a peak of 186 to 41 sales in a year. Even if we use a starting point of 2001 (not shown above; before the housing boom) we still find a 70% drop between 2001 and 2010. The number of new home sales per year has

2011

2012

2013

2014

2015

2016

2017

2018

0

not crept up much since that time -- staying between 38 and 54 new home sales per year. The past two years, however, were QUITE different. There were a total of 82 new home sales in 2016 and 77 more in 2017 -- a welcome sign for new home builders as we make our way through 2018.


[4] BUYER ACTIVITY Harrisonburg & Rockingham County

Buyers Per Month Commiting to Buy Properties 180

171 158

160

141

140

133

140

137

130

128

133 132

128 128

124

119

120

111

109

108 99

100 86

97

93

70

109

7/28/2008 3:10:30

87

85

79

74 67

63

119

logo.indd 1

87

84

82

80

112

90

69

67

60

40

20

Annual Pace: 1,301 contracts



Strong contract activity is typically an indicator of strong months of sales to come. And -- wow! Never -- in the past three years and maybe much further into the past -- have seen this many buyers (and, necessarily, sellers) sign contracts as we saw in May 2018. There were 171 contracts signed in May -- which lead to a very strong

Jul-18

Aug-18

Jun-18

May-18

Apr-18

Mar-18

Feb-18

Jan-18

Dec-17

Nov-17

Oct-17

Sep-17

Aug-17

Jul-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

Oct-15

Nov-15

Sep-15

Aug-15

0

month of home sales in June 2018. June, July and August contract numbers were notably slower, though in line with the same months over the past few years. We seem to be in the midst of a slow and steady seasonal slow down in contract activity which is normal for this time of the year.


[5] INVENTORY LEVELS Harrisonburg & Rockingham County

Inventory Levels (end of month)

600

560 532 500

480 451 413

400

402 400

411

418 394 393

368

409

396 356 logo.indd 1

320 325

322 300

280 279

346 347 345 343

7/28/2008 3:10:30

295

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 on the market could be sellers who are just “testing the market” and thus, inventory levels can vary than home sales. Inventory levels have been declining significantly over the past year -- and are now 16% lower than they were one year ago and 39% lower than they were two years ago.



Inventory Levels by Property Type Single Family Homes

Townhomes, Duplexes, Condos

500 450

435 403

400

372 343

350

318

311 312

327 327 325 320

341

329 290

282

300

25% YOY Decline in Inventory

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266

266 234 230

250

239 244 238

7/28/2008 3:10:30

257 257 257

200 150 100

125 129

108 108

25% YOY Increase in Inventory 95

86

94

88

84

98 74

68

50

69 72

66

76 56

46

49

87

80

90

88

86

56

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

actually increased by 25% over the past year. We saw inventory levels increase a bit through the Spring and Summer, which did provide buyers with more options -- but we are likely to see these inventory levels decline again now headed into the Fall.



Inventory Levels by Property Location City of Harrisonburg 450

Rockingham County

419 398

400

368 345

350

321

300

313 314

322

312 313 314

322 316

281

24% YOY Decline in Inventory

277 logo.indd 1

246

250

225 216 221

236

257 251 245 246 243

7/28/2008 3:10:30

200

150

141

112 106 100

10% YOY Increase in Inventory

134 92

87

92

86

89

89

104 80

88

85

79

76

64

58

70

84

82

89

96

100

97

50

0

Inventory levels have been falling in both the City and County over the past two years, with a 24% decline seen in the County and a 10% deline in the City. Of note -- while there are approximately twice as many home sales in the County than in the City -- there are more than three times as many homes for sale in the County

than in the City. As such, the low inventory is much more of an issue in the City right now if we look at both sellers (supply) and buyers (demand). This is likely leading to the faster increases in median sales price in the City, and the lower median days on market 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 41 6 - 12 months 3% 111 9%

Harrisonburg & Rockingham County

Days on Market Analysis of Active Listings Active Residential Listings

> 1 year, 18, 5% < 30 days 75 22%

6 - 12 months 41 12%

3 - 6 months 168 13%

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60 - 89 days 111 8%

< 30 days 676 52%

30 - 59 days 196 15%

7/28/2008 3:10:30

30 - 59 days 55 16%

3 - 6 months 108 32%

60 - 89 days 45 13%

Median Days On Market: 26

Median Days On Market: 86

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 26 days for homes that have sold in the past year. Remarkably, 52% 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 67% 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

59

59

58

60

60

60

60

60

60

60

59

59 56

55

55

54

54

53

53

53

52

50

50

49

49

49

-12% YOY

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7/28/2008 3:10:30

40

30

37

28

29

29

30

31

31

31

32

31

33

32

33

33

32

33

33

33

32

32

33

34

37

38

34

+14% YOY

20 13.7 14.0 13.9 12.8 12.4 12.3 12.0 12.3 12.5 12.0 12.4 12.3 12.7 13.1 13.2 13.3 13.0 11.5 12.3 11.4 11.8 11.8 12.2 11.3 10.3 10 6.1

6.3

6.3

6.1

6.2

6.0

6.1

6.4

6.2

6.6

6.8

6.5

6.8

6.6

6.5

6.3

6.6

6.8

7.1

7.3

7.5

8.0

8.4

9.0

8.6

+14% YOY +27% 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 been declining over the past year in the “under $200K” category

-- though likely because of limited inventory, and fewer properties existing in this range based on increasing home values. We have seen year-over-year increases in all other price ranges -- with the most significant comparative increase in the pace of home sales being in those properties over $400K in value.



Inventory Levels by Price Range $0 - $200k

$200k - $300k

$300k - $400k

$400k +

250

221

217 202

200

190

182

176 166

150

143

136

141

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147 137

127 117 116 114

137 133 133 136 130 131 132 125 124 121 107

100 82 75 50

77 72

71 64

64 61

62 48

60 50

73 66

75 74

82

85

71

69

99 82 76

84 65

86 69

81

116 113 108 98 79

63

63 53

98 87

92 85

58

60

48 37

42

7/28/2008 3:10:30

99 86 64 46

117 116 110 113 109 108 108 113 109 108 98 92

-9% YOY -17% YOY

61 61

-29% YOY -12% YOY

61 58

61 58

68

66

53

52

65 61

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. There have been declines in the inventory levels of all price ranges shown above -- though the largest declines in inventory over the past year have been in the $400K+ range

where inventory levels have declined 29%. The relatively small (9%) decline in inventory levels in the under $200K price range is likely because we are bottoming out as to how low those inventory levels can possibly go.



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

$200k - $300k

$300k - $400k

$400k +

16

14

13

13 12

12

11

13

12

12

11

13

13

Entire Market: 3.1 Months of Housing Supply 12-Month Average of 330 Active Listings 12-Month Average of 109 Sales/Month 12

12

11 10

10

10

10

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9 8

7/28/2008 3:10:30

8

8

9 8 7

4

6

6

5

5

4

4

6

6

6 6

2

9

7 6

6

9

3

4 5 3

4

3

6 6

5

6

5

2

4 2

4 2

4

2

4

2

4

2

4

2

4 2

-44% YOY

6

4

4

7

4 2

4

4 3

3 2

3 2

3 2

3

3 2

4

4

3 2

3

3

2

2

4

4

3

3

2

2

4

4

3

3

2

2

-22% YOY -27% YOY +4% 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 7 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 and if no new listings came on the market -- but 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.


[8] LOTS AND LAND Harrisonburg & Rockingham County

Lot Sales & Median Prices less than 1 acre

$120,000

450

$99,900

408 400

$100,000

150

100

85

$40,000

Stable-ish 75

83 58

64

62

63

2010

2011

2012

84

78

83 64

49

50

2003

2004

2005

2006

2007

7/28/2008 3:10:30

$60,000

Stability 111

0

$61,001

$58,000

$54,500

$59,650

$53,950

$54,900

$56,500

$54,500

$55,000

$59,900

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$42,000

$36,900

200

$54,500

247

$80,000

$56,600

304

300

250

$76,500

350

2008

2009

With the exception of 2016, we have seen between 78 and 84 lot sales of less than an acre for each of the past five years. This is a sharp decline from the 260 - 400 lot sales seen in 2002-2005, but it is an improvement over where things were (58-63 sales) between 2009 and 2012. From a value perspective, the sales prices of these

2013

2014

2015

2016

2017

2018

$20,000

$0

“less than an acre” lots have also been rather stable -- fluctuating no further than between $54K and $60K over the past ten years. That is, of course, after a meteoric rise and then fall to/from $100K. Given the trajectory of lot sales over the last few years, I expect we’ll see something similar in 2018.


[8] LOTS AND LAND Harrisonburg & Rockingham County

Land Sales & Median Price Per Acre 1 acre or more

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107

7/28/2008 3:10:30

77

76

88

83 70 57

60

51

44 40

66

$5,000

73 $0

58 49

47 -$5,000

28 -$10,000

20

0

$15,000

$10,000

100

80

$20,000

$12,915

$15,827 $10,000

$15,171

$13,240

$14,981

$15,000

$15,964

$25,000

$9,932

120

$9,535

140

$12,003

160

$15,000

$17,713

168

$13,957

180

$30,000

$20,833

$24,184

200

2003

2004

2005

2006

2007

2008

2009

2010

Parcels of land larger than one acre in Harrisonburg or Rockingham County increased in pace during 2017 to 88 land sales -- marking the highest year of sales since 2005. The median price per acre has also risen over the past year, from $10,000 to $15,827. That said, it was $15,171 two years ago -- so this is effectively not a net

2011

2012

2013

2014

2015

2016

2017

2018

-$15,000

increase in price per acre over the past two years. Of note -- some aspects of this “median price per acre” calculation are affected by which parcels actually sell in a given year. We saw an increase in buyer demand in 2017, which seems to have lead to a further increase in the median 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 1,085

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1,260

1,122

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1,013

1,000

936 816

800

897

864 794

758

600

400 270 200 75 0

2003

70 2004

86

2005

93

2006

97

2007

118

2008

177

223

252

222

163

139

136

134 55

2009

2010

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

2011

2012

2013

2014

2015

2016

2017

2018

Trustee Deeds. Some foreclosed properties then show up again as REO properties. The foreclosure rate in our local market area is trending downward, though very slowly, and the pace of home sales is increasing much more quickly, despite having slowed slightly in 2017.


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

6.00%

Aug-17

4.52%

4.55%

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Aug-16

4.54%

4.56%

4.61%

4.44%

4.40%

4.15%

3.99%

3.94%

3.90%

3.83%

3.82%

3.92%

3.88%

3.95%

4.03%

4.14%

4.19%

4.16%

3.47%

4.03%

3.00% Aug-15

3.42%

3.50%

3.43%

3.48%

3.64%

3.48%

3.66%

3.71%

3.62%

3.79%

4.01%

3.95%

3.86%

4.00%

3.76%

4.50%

3.84%

5.00%

4.32%

5.50%

Aug-18

7/28/2008 3:10:30

Harrisonburg-Rockingham MSA

Unemployment Rate

2.50% Jul-15

Jul-16

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% except during the past seven months. Thus far, these rising interest rates have not seemed to have made a large impact on the number of buyers buying homes. The second

Jul-17

3.0%

3.5% 2.9%

2.7%

3.3%

3.2%

3.5%

3.0%

3.5%

3.3%

3.9%

3.00%

3.5%

4.0%

4.2%

3.9% 3.3%

3.6%

3.7%

3.9%

3.6%

3.8%

4.2%

4.0%

4.2%

4.4%

4.4% 3.8%

4.0%

4.3%

3.9%

4.1% 3.2%

3.50%

3.9%

4.00%

4.1%

4.50%

4.0%

5.00%

4.4%

5.50%

5.0%

Not Seasonally Adjusted

Jul-18

graph above illustrates trends in the local unemployment rate -- which has shown a general downward trend over the past several years to a current level of 3.0%. 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) scott@HarrisonburgHousingToday.com

How To Navigate The Home Purchasing Process 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 as a Trustee for Asbury United Methodist Church, is the co-founder of TakeThemAMeal.com and PerfectPotluck.com 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.

The Best Marketing Strategies For Selling Your Home SellingAHomeInHarrisonburg.com Harrisonburg & Rockingham County Property Search ScottPRogers.com Analysis and Commentary on our Local Real Estate Market HarrisonburgHousingMarket.com Daily Housing Market Analysis & Commentary HarrisonburgHousingToday.com Fast Access to All New Listings of Homes For Sale NewListingsInHarrisonburg.com

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Historical Record of Area Home Sales JustSoldInHarrisonburg.com Property Transfers in Harrisonburg & Rockingham County HarrisonburgPropertyTransfers.com Comprehensive Data on Single Family Home Neighborhoods HarrisonburgNeighborhoods.com Comprehensive Data on Area Townhouse Communities HarrisonburgTownhouses.com Analysis of Real Estate Investment Options in Harrisonburg HarrisonburgInvestmentProperties.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 Trustee Sales in Harrisonburg & Rockingham County HarrisonburgForeclosures.com


7/28/2008 3:10:30