Below are several highlights from the September 2010 Harrisonburg & Rockingham County Real Estate Market Report.  Read on, or click here to download a PDF of the entire report.

Home sales in Harrisonburg and Rockingham County... Are they up? Down? Stable? 



In fact, they are up, down AND stable!  A mix of indicators this month:

• Home sales in August 2010 increased compared to July 2010.
• Home sales in August 2010 decreased compared to August 2009.
• Though not shown above, 2010 YTD home sales are nearly equivalent with 2009 YTD home sales.

The third is perhaps the most important indicator of the trend of our local housing market.  After four straight years of declines in the number of home sales in our market (2005 to 2006 to 2007 to 2008 to 2009) this year still appears to be the year when we'll see that decline in home sales finally cease and possibly reverse itself.  January 2009 through August 2009 showed 531 home sales, while January 2010 through August 2010 showed 530 home sales.



Another good indicator, as shown above, is that the local housing inventory has peaked --- at least for now.  A few months ago the number of homes for sale in Harrisonburg and Rockingham County broke 1,000 for the first time -- but it has now started to decline again, as is typical for this season of the year.



Lot sales (less than an acre) have been very, very slow over the past several years, falling from a peak in 2004 of 408 lot sales to only 58 lot sales last year.  As shown above, lot sales might actually rebound this year!

There is even more in the 19-page September 2010 Harrisonburg & Rockingham County Real Estate Market Report. Download the entire report by clicking on the image below.



Thanks for reading, and if you have any questions, or if I can assist you with buying or selling real estate in Harrisonburg or Rockingham County, please contact me at 540-578-0102 or scott@HarrisonburgHousingToday.com.

First of all, I should point out that there are LOTS of homes on the market right now, so this blog post is not intended to broadly encourage anyone and everyone to put their house on the market.  However....I have been asked several times in the past two weeks about whether it's really too late at this point to try to sell a house this fall.  It seems that this assumption is based on:

• The common knowledge that more homes sell in the summer than in the winter.
• The big drop in home sales (nationally) that makes many people assume the rest of this year will be quite slow as it comes to buyers committing to properties.

On the first point, let's compare the summer to the winter:

• May 2009 - Aug 2009 shows 333 home sales
  
• Nov 2009 - Feb 2010 shows 251 home sales

Surprised?  Looking at the data, there is a lot less variation between the summer and winter than I had assumed.  Sure, winter homes sales are 25% lower than summer home sales, but I expected it to be much more of a difference.

On the second point, I haven't given up on 2010 yet.  If the rest of the year is going to be quite slow, we should see it in the number of contracts being ratified.  Here are the past four Augusts....

• August 2007 = 77 homes under contract
• August 2008 = 66 homes under contract
• August 2009 = 85 homes under contract
• August 2010 = 61 homes under contract

So, I guess here, it depends on the headline writer.  While it would be fair to say "Buyer commitments in August lowest in four years" -- I would have expected August contract numbers to be lower if we were indeed driving off a cliff for the rest of 2010.

My full market report will be coming out in about a week after additional data is available.  Stay tuned!
 

Here's how it started, or so they tell me....

In some other city or town in Virginia, a relocating buyer swept into town looking to buy a house.  He found a great house, discovered that it had only been on the market for a few weeks, and made a offer on the house relatively close to asking price given the short length of time on the market.  After moving in, he was talking to a neighbor, and commented on how glad he was that he was able to secure the house even though it was such a new listing.  The neighbor laughed, saying "What are you talking about?  They had been trying to sell that house for three years!"

How was it possible there?  Was it happening here?

The buyer's confusion, it seems, was based on the "Days on Market' field in the local MLS.  The information that the buyer reviewed showed a very low number for "Days on Market" and he understood that to mean (as most people would) that it was a very recent listing.  But in that area (and yes, in Harrisonburg and Rockingham County -- until recently) this "Days on Market' field could be conveniently reset by re-listing a property with a new company.

Indeed, even around here, if a seller became worried about buyers' perceptions of an ever increasing "Days of Market' value, that seller could list their home with a new real estate company, and start over at ZERO!

But now, things have changed around here....

Our local association of Realtors (HRAR) MLS changed in the past two weeks, introducing a new "Cumulative Days on Market" field.  This field will now track the total length of time that a property has been on the market, even if it is listed by multiple companies.  Thus, if Brokerage A has a property listed for 300 days, and after the listing agreement expires, the property owner hires Brokerage B, the "Days on Market" slate will no longer be wiped completely clean.  "Days on Market" will indeed return to ZERO, showing the length of time on the market with the new listing broker, but "Cumulative Days on Market" will continue to increase, to 301, 302, etc.

Does "Cumulative Days on Market" EVER reset??

If a property has been off the market (not listed) for 120 days (4 months), then both the "Days on Market" and "Cumulative Days on Market" will reset to ZERO when the property is re-listed.

How does this affect buyers, or sellers?

As a buyer, it will now be easier than ever for your Realtor to quickly discover how long a seller has truly been attempting to sell their home.  As a seller, it will no longer be able to present your home as a NEW LISTING all over again just by switching real estate companies. 

So, good or bad?

I'm glad the change has been made --- it makes it more difficult for a seller to be deceptive (which is reasonable) and it makes it easier for a buyer to have a clearer understanding of the status of the property.

But what do you think?

This is a question that many home sellers are wondering these days in and around Harrisonburg -- and perhaps all across the nation.  Let's see why....

A real estate market is considered to be balanced (between buyers and sellers) if there are six months of supply available.  Depending on the price range, there is quite a bit of excess supply in the Harrisonburg and Rockingham County housing market:

• 11 months of supply under $200k
  
• 17 months of supply between $200k and $300k
  
• 20 months of supply between $300k and $400k
• 28 months of supply above $400k (yes, that's more than 2 years)

Many months of supply means that a small percentage of homes go under contract each month in any given price range:

• 1 of 11 homes under $200k will go under contract each month (9%)
• 1 of 17 homes between $200k and $300k will go under contract each month (6% of inventory)
• 1 of 20 homes between $300k and $400k will go under contract each month (5% of inventory)
• 1 of 28 homes above $400k will go under contract each month (4% of inventory)

Again, if your home is priced above $400k, then you have a 1 in 28 chance of selling your home each month.  Ouch!  And thus, given these long odds, the question "Is My House Overpriced" starts to have new meaning. 

It was said by some, at one point, that if your house hadn't sold in 60 days, lower the price, and repeat.  Thus, if you started at $300k, and you hadn't sold it within 60 days, you might lower it to $290k, and wait another 60 days and lower it again, etc.  Eventually, you'd reach the point where the market (buyers) would respond to your price, and you'd sell the house.

That logic might work in a balanced market, but when the market is so flooded with sellers, and so void of buyers, the logic doesn't work as well.  Homes now sometimes sit on the market for months priced well below comparable homes, and don't sell.  Will they sell if the price is lowered?  Maybe, but maybe not! 

Time on the market is quite unpredictable at this point, and price is no longer the trump card.  In many markets, if a price was lowered to a certain place, a house would definitely sell.  If it appraised at $300k, and you lowered it to $280k, it would more than likely sell.  Now, you could lower it to $260k, and it might sell, but it might not.  You could then lower it to $240k, and it might sell, but it might not. 

Thus, as you can hopefully see, the answer to the aforementioned question (Is My House Overpriced?) is very difficult to answer.  I suppose the answer is that if it has been properly marketed, and it hasn't sold, then it is probably overpriced, but even if the price is lowered, it still may not sell.  One last illustration to explore this dilemma...

Three comparable houses on your street sell for $245k, $250k and $255k.  You assume your house is worth $250k, and put it on the market for $245k to be aggressive.  It doesn't sell after four months, so we assume it is overpriced -- even though recent sales would not suggest that.  After another four months at $235k, it still hasn't sold.  Is it overpriced?  I suppose the market would say yes, even though recent comparable sales still do not agree.  If, after another four months at $215k it has still not sold, do we STILL say it is overpriced???

In these crazy times, it's possible to "beat the market" and yet still be hurting financially...



The blue line above shows the trend in single family home prices over the past five years in Harrisonburg and Rockingham County.  As you can see, prices have declined, though only a total of 12% over the past five years.

The red line shows the purchase and sale of a single home in Harrisonburg, as experienced by some of my clients. 

You'll note that while the red line declines, it's not by anywhere near as much as the blue line.  Thus, my client's home outperformed the market --- they beat the market, and experienced a smaller decline that perhaps they should have.  How exciting, right??

But no, actually, it wasn't too exciting.  The heroic act of selling the house at a higher price than the market suggested would be possible was still painful.  My clients had financed most of their home purchase in 2007, so they actually had to bring thousands of dollars to closing in 2010 in order for the sale to proceed.

You see, it's not as simple as the purchase price minus the sales price --- you also have to factor in the closing costs on the buying side (2007) and the closing costs on the selling side (2010).

So....when the market is declining, even if it is declining slowly, it can be difficult to purchase and then sell within a short time period.  Thus, buyers and sellers should note that:

• If you're thinking about buying now, and only staying for a few years, and financing most of your purchase price -- you might find yourself in the situation described above.
• If you bought a few years ago, and financed most of your purchase price, your house's value might have performed well, and yet you'll still have trouble selling without bringing money to the closing table.

Hopefully, we'll soon return to predictable, rosier times, when home values are steadily increasing by 3% to 6% per year.  Soon, I hope, on behalf of all of my clients!

Can't obtain traditional financing?  Perhaps the owner of the house you are purchasing can finance the purchase for you!  Actually...there don't seem to be too many owner financing opportunities available.  Searching our local MLS, I'm finding five properties in Harrisonburg and Rockingham County that are advertised as having owner financing opportunities....



(1)  3318 Friedens Church Road - 3 BR, 3 BA, 2700 SF, $326k
(2)  216 Emerald Drive - 3 BR, 3.5 BA, 2581 SF, $199k
(3)  150 Inglewood Court - 3 BR, 2 BA, 1408 SF, $178k
(4)  1380 J Hunters Road - 2 BR, 2 BA, 953 SF, $57k
(5)  1372 J Hunters Road - 2 BR, 1 BA, 837 SF, $47k

In many (not all) cases, an owner that can provide owner financing either owns the property outright (no mortgage remains), or has a low balance on their mortgage that they can pay it off entirely.  Then, with no mortgage in place, they'll expect some portion of the purchase price from you as a down payment, and the rest will be repaid over a term and on a schedule negotiated between you and the owner.  Most owner financing scenarios are not 30 year arrangements, but may involve owner financing for 5 or 7 years, with a balloon payment at the end. 

To be more specific --- a $200k purchase might involve a $20k down payment, and then the $180k balance amortized over 30 years at 6% interest, but with a 5 year balloon.  This would mean that you'd pay a monthly payment of principal and interest as if the $180k loan were stretched out over 30 years, but after 5 years you would have to pay off the entire remaining balance of the loan.  Typically the balloon payoff is accomplished by refinancing the property with a traditional lender at some point prior to when the balloon payment is due.

If you own a property, and are trying to sell it, and could offer owner financing --- do it!  There aren't too many properties with this option readily available, so you might entice additional buyers if you can offer to finance their purchase.  If you're a buyer looking for owner financing, you'll probably need to approach owners (in addition to the five above) who aren't offering owner financing, to see if they can or would consider it.

Click here for the full August 2010 Harrisonburg & Rockingham County Real Estate Market Report.

If we only looked at July 2010 home sales (and ignored several other key indicators, and the bigger picture) we might get a little worried about our local housing market.



As can be seen above, there were very few home sales in July 2010.  This is likely because of the original June 30th deadline for closing under the home buyer tax credit (the deadline has now been extended to September 30th).  But after a very slow July, we'll probably start to see things pick back up, since contracts looked healthy in July 2010.



As can be seen above, there weren't too many buyers committing to buy properties last month, but there was a return to the contract-signing-table in July 2010.  This month's buyer commitments actually exceeded last July's data, showing a reversal of the downward trend of the last several years.  For another reversal, read on.



The yellow bars above show the number of home sales over the past ten years -- it is very likely that after four years of declining home sales, we might finally see an increase in 2010.  Year to date, 2010 shows a 3% improvement over 2009 to date.  The blue line above shows the change in median sales price over the past ten years.  The median sales price declined by 5% between 2008 and 2009, but the decline appears to be much smaller this year.

Learn even more about what's going on in the Harrisonburg and Rockingham County real estate market by reading the full report.



Do you have questions about this report, or about the Harrisonburg and Rockingham County real estate market?  Or about your house?  Or about a house you might buy?  Be in touch . . .

Scott Rogers  |  540-578-0102  |  scott@HarrisonburgHousingToday.com
 

Over the past few weeks I have received (on behalf of my seller clients) quite a few offers that I considered to be quite low:

• $30,000 under asking price on a $300,000 house (10%)
• $30,000 under asking price on a $200,000 house (15%)
• $40,000 under asking price on a $250,000 house (16%)
  
• $60,000 under asking price on a $300,000 house (20%)

A few of these were negotiated successfully, and a few were not.  It made me wonder, however, how often buyers were really negotiating 10% or more off the asking price of a home.  So, let's take a look at a ridiculously small sample size (home sold in the past 10 days) and pick out the 5 best deals as far as the percentage that was negotiated off the listing price:

First, do note that of the 27 homes sold in Harrisonburg and Rockingham County over the last 10 days, on average, 5.4% was negotiated off of the list price. 

Now, for the houses where the buyers negotiated the highest percentage off of the list price....



4377 Hilltop Road (Massanetta Spring)  -  sold for 22% less than the list price




160 Wildwood Drive (Bridgewater)  -  sold for 15% less than the list price




253 S Sunset Drive (Broadeway)  -  sold for 11% less than the list price




2965 Pin Oak Drive (Belmont Estates)  -  sold for 10% less than the list price




545 Tabb Court (Preston Heights)  -  sold for 10% less than the list price

So, with average negotiations of 5.4%, what do you think?  Where the four offers of 10%, 15%, 16% and 20% below asking price reasonable?  Perhaps negotiations have to start somewhere!

I talked to a local Realtor yesterday who has three listings that have been on the market for two months now, and have yet to be shown.  By yet to be shown, I mean that not a single buyer has come to view the house.

What is going on here?  Have all of the buyers left town?

There were some people who thought that after the home buyer tax credit ended, that the local real estate market would slow down to a crawl.  That didn't exactly happen, as we'll see in a few days in my monthly report.  So, given that properties are still selling in Harrisonburg and Rockingham County, why are some listings not seeing any showing activity at all?

PRICE:  It is possible that the price of the home is simply too high to motivate any buyers to come view the property.  Some sellers figure "well, they can make an offer, so it's o.k. if my house is priced $10k, $20k, $40k higher than what I'd really accept."  This logic doesn't work well in today's market, as buyers will often not even go to view a house if they think the asking price is too high.  As a tangible example, I was talking to an agent in my office last week who had a house listed for around $225k.  After a month of very few showings, they lowered it to $215k.  After another month of very few showings, they lowered it to $205k.   Within two weeks they had roughly 10 showings, and an offer that was successfully negotiated.  (These prices have been changed slightly to keep things anonymous around here).  As you can see, once the property was at a price that made sense to the buying public, they were willing to come and see the house, in droves!

NO/FEW BUYERS:  It is (quite) possible that there are not very many buyers in your home's price range or "product range".  It is certainly obvious that if you have a house priced at $5,000,000 that there would be very few buyers, thus very few showings, thus very few offers.  It is also quite possible that there are (for example) very few buyers in the $250k - $300k range who would be satisfied with only having three bedrooms and two bathrooms.  If everyone looking in that price range wants four bedrooms, then you can lower your list price from $300k to $290k to $280k to $270k, etc., and you might still see very few showings and market activity.

POOR MARKETING:  Your property must be presented well and widely (primarily online, as that is where nearly all home buyers start their search) so that you can maximize the number of people who are even considering coming to view your home.  If the photos of your home are dark, or if there are very few photos, or if the square footage calculations are inaccurate, then you probably can't expect too many showings, or offers.

The good news here is that you (and/or your Realtor) can affect/fix any instances of poor marketing.  You can also fix a pricing problem --- to some extent, depending on how much you owe on the house and many other aspects of your personal financial situation. 

The bad news is that you can't do anything to fix the problem if it is a result of very few buyers looking for what you happen to be selling.  A house can be marketed wonderfully, priced very well, and may still have very few showings.  Again --- if there isn't anyone looking for what you are selling, then you still won't have showings.

There are a LOT of homes on the market in the $300k - $400k price range, and I have recently been showing a lot of them to buyers.  I will then have follow up calls from the Realtors representing the sellers, wondering how things went.  Some of the houses are priced more competitively than others, and those sellers (and their Realtors) are often confused and frustrated when my buyer clients aren't ready to make an offer on their home.

Why aren't buyers necessarily jumping at the "best-priced" house on the block?  The main conclusion I have come to is that the layout of the house seems to be a significant trump card above all other factors. 

• A house can offer a compelling cost per square foot, be in immaculate condition, on a beautiful lot --- but if a family spends lots of time preparing for and enjoying family meals --- and the house has a small kitchen and small dining room --- the house probably won't work.
• A couple looking for a three bedroom house can find one in a great neighborhood, with many compelling features, but if the main living spaces are chopped up, and the couple wants an open and airy feel -- no go.
• A house might be priced at the lowest possible price in a neighborhood, and might boast more square footage than all of the neighboring homes --- but if the prospective buyers are looking for privacy in the backyard --- and the house is on a bare lot with no trees and an immediate view of all close neighbors --- the buyers will keep on looking.

The good news here is that even though there are a LOT of homes on the market, YOUR home might offer the perfect layout for a home buyer that has been waiting in the wings patiently viewing each new listing as it comes on the market.

The bad news is that if the layout or floor plan of your house is unpalatable to most buyers, your home may languish on the market.

Back in 2002-2006, just about any home would sell (regardless of the layout) because there were very few choices in homes.  Now that buyers have so many choices, they are often quite specific in wanting a layout in a home that works well for their day to day needs.

Click here to view my full June 2010 Harrisonburg & Rockingham County Real Estate Market Report.

Exciting Fact #1 --- May 2010 home sales declined 5% as compared to May 2009, but year-to-date sales (January through May) are up 10% over last January through May.




Exciting Fact #2 --- After three and a half years of steadily declining home sales (quantity, not prices), we have now seen stabilization or increases in home sales for over six months.




Not-So-Exciting Fact #3 --- Sales volume has declined sharply for four years now (red line), and median home values have declined gradually for two years (green line).  Despite early positive indicators for the past several months, we're not out of the woods yet.




Other tidbits that you'll discover in my June 2010 Harrisonburg & Rockingham County Real Estate Market Report include:

• Average days on market is down in May 2010.
• Inventory levels have hit a new high.
• Land sales (1+ acres) are soooo slow this year.

Click the image below to read the full report...

Click here or on the image below to view the full April 2010 Harrisonburg & Rockingham County Real Estate Market Report (PDF).  Read on below for a few highlights.



Mixed indicators this month . . .

• Home sales declined 18% from 57 sales in March 2009 to 47 sales in March.
• The median sales price decreased 5% from $211k in March 2009 to $200k in March 2010.
• The average sales price increased 3% from $237k in March 2009 to $245k in March 2010.

As can be seen below, March sales were the first month this year where the sales pace was not equal to or greater than last year.  We'll need strong April sales to catch back up to the 2009 sales pace.



Also of note, we have seen a steady increase in Inventory over the past several months.  Lots of options for buyers --- lots of competition for sellers!




Don't delay -- get all of the exciting (and not as exciting) details and beautiful charts by downloading the full April 2010 Harrisonburg & Rockingham County Real Estate Market Report (PDF). 


If you find the information in this report to be helpful....

• Feel free to share it with your friends or colleagues.
• Let me know if you'd like to meet to discuss this report and/or the particulars of your real estate situation.
• If you'd like to know even more about the housing market in Harrisonburg and Rockingham County, click here to subscribe to HarrisonburgHousingToday by e-mail or by RSS.
• Though I spend a considerable amount of time analyzing our local housing market,the majority of my time is spent helping people like you buy and sell real estate.  If you (or someone you know) will be buying or selling real estate sometime in the near future, I'd be delighted to have the opportunity to be of service.

 

Despite high inventory levels in the upper end price ranges in Harrisonburg and Rockngham County, large homes (3,000+ square feet) are currently selling faster than they have since at least 2006.



The graph above examines first quarter sales (Jan 1 - Mar 31) of homes larger than 3,000 square feet in Harrisonburg and Rockingham County per the HRAR MLS.  As you can see, the seventeen sales in first quarter 2010 has surpassed the number of homes sold in any other year back to 2006.

During this time, median prices have shifted up quite a bit ($78k between 2006 and 2008) and then back down quite a bit ($93k between 2008 and 2010). 

Yet, all you sellers of large homes out there, please bear in mind that although sales in first quarter 2010 are brisk (compared to the recent past), that does not change the fact that there are 102 such homes currently for sale.  At the current pace of sales (17 in 2010-Q1), it would take 6 quarters (18 months) to sell through all existing inventory.
 

Explain this....



The number of properties viewed online (on our company site and all of our company's agent sites) has increased dramatically over the past year.  Thus, it seems that more buyers are hunting for homes.

But when we compare the number of closings in the first 28 days of last March and this March, we see a rather significant decline.

What is going on here?

• Will the last three days of March this year be much more exciting (in terms of closings) than the last three days of March 2009?
• Are a smaller percentage of potential buyers deciding to actually buy as compared to last year?
  
• Are our web sites simply more popular than they were last year, and a higher percentage of buyers are using our sites now?

What are your theories?

Click here or on the image below to view the full March 2010 Harrisonburg & Rockingham County Real Estate Market Report (PDF).  Read on below for a few highlights.



Some high level February 2009 to February 2010 observations include:

• Inventory increased by 3%.
  
• Sales held steady (no change).
• Prices (median) declined by 3%.
• Days on market held steady (no change).

As can be seen below, we may be entering a new period of growth in our local real estate market.  Between 2004 and 2006, the pace of sales increased steadily.  Between 2006 and 2009, the pace of sales decreased drastically.  Over the past four months, we have seen the pace of sales stabilize and start to increase.



Don't delay -- get all of the exciting (and not as exciting) details and beautiful charts by downloading the full March 2010 Harrisonburg & Rockingham County Real Estate Market Report (PDF). 


If you find the information in this report to be helpful....

• Feel free to share it with your friends or colleagues.
• Let me know if you'd like to meet to discuss this report and/or the particulars of your real estate situation.
• Let me know if you would like to schedule a time for me to come speak to your company or an organization in which you are involved.
• If you'd like to re-publish all or part of this information on your web site or in an article, just let me know if you need any additional information or graphics.
• If you'd like to know even more about the housing market in Harrisonburg and Rockingham County, click here to subscribe to HarrisonburgHousingToday by e-mail or by RSS.
• Though I spend a considerable amount of time analyzing our local housing market,the majority of my time is spent helping people like you buy and sell real estate.  If you (or someone you know) will be buying or selling real estate sometime in the near future, I'd be delighted to have the opportunity to be of service.

Good News!

• An amazing 31% of homes currently selling do so within 90 days of being listed.
• An additional 35% (for a total of 66%) sell in 3 to 6 months of being listed.

BUT WAIT . . . Many homeowners who are trying to sell their homes right now are not experiencing these joys of a speedy sale.  So, if your house isn't selling, what can you do?  The most common approaches are:

• adjust the price
• adjust the marketing
• add incentives (closing costs, allowances, etc)
• (what else can you think of that would work here?)
  

Inspired by discovering that 26% of homes in the Charlottesville market have had price decreases, I thought I'd check the local stats for our market.

When considering all residential properties In Harrisonburg and Rockingham County:

• 859 properties are currently FOR SALE
• 368 of these properties have had a price change

So, it seems that 43% of homes for sale in Harrisonburg and Rockingham County have had price reductions, as compared to only 26% in the Charlottesville / Albemarle area.

To put this in a bit of a historical context, when I checked the same data nearly two years ago, 40% of homes for sale had experienced a price change. 

OF NOTE:  Our MLS simply searches for price changes, therefor some of the 368 price changes could be price increases, though it seems doubtful.

Harrisonburg has steadily grown over the past ten years, and thus I would expect that we would see a gradual, steady increase of home purchases.  The recent history of home sales has not followed the slow and steady theory for the last ten years.  Below I have charted a gradually increasing rate of home sales (the red line) as I might expect them to be occurring. 



As you can see above, if there were approximately 900 home sales in 2000, I'd expect that we might be around 1100 home sales per year here in 2010.  Let's examine why sales history strayed so far from this path....



While I didn't think to ask this at the time, I now think it would have been reasonable to ask between 2001 and 2007 why there were so many people buying houses.  The blue sections of the yellow bars show the unexpectedly high home sales levels (per my rough calculations).  Here are my theories on why so many people were buying at that time:

1. Financing guidelines were loose --- you didn't need much income, or assets, or creditworthiness to obtain a loan.  You could even finance your closing costs!  These relaxed financing guidelines pumped buyers into the market that otherwise would have rented.
   
2. Investors were eager --- with home values escalating as quickly as they were at the time, many investors were buying properties they wouldn't have purchased in prior years when appreciation was more modest.  Rapid appreciation made longstanding investors buy more properties, and created lots of new investors in the market as well.
   
3. Appreciation was high --- you could buy a house one year, sell it a year later, and make money.  This increased the number of buyers in the market considerably, since in the past if you were only going to stay put for a year or two, you would have rented.
   

But now, as seen above, there are (if my red trend line is correct) fewer buyers in the market that could be or should be expected.  If we flip around the three factors listed above, we'll understand why:

1. Financing guidelines are strict --- some would-be buyers are being turned away by lenders, as the pendulum has swung significantly past center, to where many lenders are quite hesitant to write loans unless a buyer looks perfect from credit, asset and income perspectives.  This decreases the number of buyers in the market.
   
2. Investors are hesitant --- with several years of (slight) depreciation in our market, and significant depreciation in other markets, most investors are hesitant to buy right now.  I believe we have a lower than normal amount of investors buying residential properties right now.
3. Appreciation is low --- with median home values dropping slightly for each of the last several years, some would-be buyers are quite hesitant to buy right now.  Flat housing values at the present time mean that a buyer must stay put a bit longer in their home to have paid down their loan balance some before selling.  This has decreased the number of buyers who are in the market.

I believe that we will soon see an increase in the number of buyers in the market.  I believe that in 2010 we will see at least as many buyers as in 2009.  Only time will tell, but we may just be rounding a corner!

Good Luck!  There are only two listings on the market right now labeled as Dutch Colonial homes.  Let's take a look at what IS for sale . . . .



As you can see, ranches, townhomes, contemporary homes and colonial homes are your best (or at least most prolific) option in Harrisonburg and Rockingham County.  Also of note, here's what sold in 2009 . . . .



We find the same leaders -- ranches, townhomes, contemporary homes and colonials.  Thus, we have a bit of a chicken/egg dilemma.  Are these types of homes being sold because that's what people want, or because that's what is available.

Here are the full numbers for those who are curious . . . .

  . 

Jennifer Chapman, one of my associates at Coldwell Banker Funkhouser Realtors brought some very interesting data to light yesterday.  She noticed that there are fewer and fewer homes selling over $300k.  I thought I'd take a look . . . .

First, bear in mind that the median sales price has gone largely unchanged between 2006 and 2009, showing only a 3.5% decrease.  (full market report)  This would suggest (in some ways) that we've probably seen a roughly equivalent number of inexpensive and expensive homes selling over the past several years.  This actually does not turn out to be true . . . .



I can make plenty of guesses as to why we're seeing these shifts, including:

• The first time buyer tax credit has likely increased the number offirst time buyers, and thus the number of inexpensive home sales. 
  
• Most upper end home buyers have to sell an existing home before buying.  A slower market has likely slowed down this trading up process, and thus decreasing the number of high end homes.

Do you have other explanations for the shift in what types of buyers are actually buying in Harrisonburg and Rockingham County?  Let me know what your guesses are.  The fascinating part ot me is that despite a 35% increase in sales of inexpensive homes (sub $175k) and a 27% decrease in sales of expensive homes ($300k plus), we still only saw a 3% decrease in median sales price over the past three years!?!

It is wonderful that the median sales price, and thus home values, have not significantly eroded in the Harrisonburg and Rockingham County real estate market.  In fact:

• The median sales price increased 61% over the past nine years, at an average rate of 6.7% per year.
• Housing values in many other parts of the country have fallen significantly over the past three years, but the median sales price in Harrisonburg and Rockingham County has only declined by 3% over the past three years, at an average rate of 1% per year.

Yet, despite the fact that home values are holding rather steady in our market, that doesn't necessarily mean that you'll be able to sell your home for the same amount that you could have sold it in 2006.  What is the problem here, you might ask?  It's your neighbor!

You see, if you bought a townhome in Harrisonburg for $160,000 in 2006, you might think you could sell it for about $155,200 now (3% less) given the statistics above.  But......if your neighbor bought their townhouse several years earlier for $130,000.....they may be competing with you by listing their house at only $140,000.  They can, you see, sell for less and still make a profit.

Likewise, if you bought a home in Rockingham County for $400,000 in 2006,you might think you could sell it for about $388,000 now (3% less)given the statistics above.  But......if your neighbor bought theirhome several years earlier for $325,000.....they may be competingwith you by listing their house at only $350,000.  They can, you see,sell for less and still make a profit.

So....I'm not encouraging you to get upset with your neighbor, or try to get them to increase the asking price on their home --- but you do need to know that competing list prices affect the value of your home (if you're trying to sell it) just as much as recent sales (as reflected in median sales prices).