Harrisonburg Real Estate Market Report - May, 2014

Click here to download Market Update charts for May 2014.




Well, it seems our local real estate market has finally shaken off the effects of the winter of 2013 – 14. While we cannot say for certain that the winter weather was the cause for our surprisingly slow start to the year, if we take a look at the Residential Sales per Month chart we can see a dramatic difference in sales as soon as the warmer weather appeared. The residential sales total of 99 units in May, in fact, surpassed last May’s total of 96 and is the highest number for the month of May since 2007. While individual monthly totals do not show us any kind of trend, this type of recovery is encouraging nonetheless. In terms of year-to-date sales, this year’s total through the end of May, 332, is 12.86% fewer than last year’s total of 381. I expect the 2013 vs. 2014 gap to continue to narrow over the next few months.

Perhaps even more encouraging than May’s sales are the 135 contracts buyers placed on homes in May. By far the highest monthly total for contracts this year, this is further evidence the market is very active and will remain so during this summer. As I mentioned last month, I believe the slow start to this year was due to a combination of the long winter and a lack of inventory. I think we are now seeing the results of a healthier inventory – lots of quick sales. As attractive, reasonably priced homes have been put on the market, buyers have been waiting to snap them up, and have done so quickly and in great numbers.

Inventory has continued to rise in both the City and the County, despite the brisk pace of contracts taking inventory off the market. This net gain, of course, means properties are being put on the market at a faster rate than they are being purchased (even though they are now being purchased at a relative high rate), which is exactly what we needed, in my opinion, to improve the overall health and balance of our real estate market.

Home prices have remained steady over the past few months, and our current average sales price (based on the past 12 months sales) of $198,240 is 2.42% above the 12-month average at this point last year. Because we now seem to have a fairly balanced market I would expect prices to increase at a reasonable pace of about 4% per year. Hopefully our newly balanced conditions will continue to make this possible. The one and three year pricing trends are:

Three year change:    Average Price down -2.05%, Median Price up +1.38%
One year change:       Average Price up +2.42%, Median Price up +1.71%

Although things feel more balanced through the “middle” portion of our market, homes in the $150,000 - $350,000 price range. In the lower price ranges, we still have more buyers than sellers (a “seller’s market”), and the opposite is true in the higher price ranges, where there are more sellers than buyers (a “buyer’s market”). The luxury portion of the market is typically the last to recover from a slowdown because folks in the middle price ranges generally need to sell their homes in order to move up to the luxury homes. In theory, the current health of the middle portion of our market should allow some homeowners to sell their homes and move up as the year goes on. This will be a welcome change for sellers in the upper price ranges, who have not seen many potential buyers for the past several years.

Click here to view or download our Market Activity Charts for May 2014.

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