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What is, isn't, and will be (or not) in the Harrisonburg and Rockingham County real estate market |
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Each month I publish a real estate market report for Harrisonburg and Rockingham County, which includes this graph:  Overly simplified, you'll notice in this graph that sales are slow, but prices are steady:  Certainly better than the many markets (even in Virginia) where the pace of sales is increasing, but prices took a huge hit:  At the same time, our market could have transitioned more gracefully than it did --- perhaps if prices had dropped a bit more, sales wouldn't have slowed down so much:  The big question now, is WHAT IS NEXT for our local real estate market. I think another big drop in sales and a significant drop in prices is likely overly pessimistic:  Yet it's also probably too optimistic to think we'll see sales pace and prices rebound overnight:  My best guess? We'll see another year of negligible changes in price, but we'll see a small increase in sales pace:  But what do YOU think?? ** Of note, the 2009 bar is extrapolated from Jan-Sept 2009 sales. | |
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Scott Rogers
Coldwell Banker
Funkhouser Realtors
540-578-0102
scott@cbfunkhouser.com
Licensed in the
Commonwealth of Virginia
Harrisonburg New Homes
Heritage Estates
The Glen at Cross Keys
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Urban Exchange
Founders Way
Harrisonburg Foreclosures
H'burg Real Estate Radio
Holding all else constant, the law of supply and demand would suggest that if demand lowered, then so would prices. Given the likely 50% decline in in yearly housing sales from 2005 to 2009, I'm surprised that prices haven't come down considerably. Nevertheless, there are a couple of mediating factors: exceptionally low interest rates and the first-time-buyer 8k tax credit. Those two factors could certainly support prices amidst the anemic sales (although one would have thought they would have also supported sales). Given that the govt does not have many housing stimulus arrows left in its quiver, I see two possible scenarios for H-burg. (1) A slow bleed like what has been going on now for several years: price drops in miniscule increments and sickly sales or (2) a significant correction in housing prices over the next couple years (perhaps ~20-30%) and a return to more typical sales (~1100/year). I think the latter scenario more likely, but again I would have thought prices would have dropped much more over the past year too.
November 3, 2009 8:17 am
Keston -- I greatly appreciate your comments and perspective -- thank you!
It is somewhat surprising to me as well that prices have stayed steady as they have for the past few years, given the greatly reduced demand. I agree that will probably be one of your two scenarios, but I believe it will be the first based on the fact that we haven't seen prices drop over the past few years when I otherwise would have expected them to.
Any other predictions out there?
November 3, 2009 12:04 pm
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