Shenandoah Valley Real Estate Market - 1st Six Months 2024
The Shenandoah Valley real estate market continues to improve over the first six months of 2024. Year to date sales have increased 9.2% over the same period in 2023. The five localities that make up the local market, Winchester City, Frederick, Clarke, Warren, and Shenandoah Counties saw 1595 sales from January 1, 2024, to June 30, 2024. There were 1461 during the same period in 2023. Of the seven (7) criteria used to measure the market’s health, most were positive with only one seeing a decline. The total number of homes sold over the past 12 months in the Shenandoah Valley real estate market declined -4%.
Median Price
The median home price for the first six months increased 9% over 2023. The median home sale price was $398000 compared to $365000 in 2023. The average home sale was $429000 in 2024, an 8.6% increase, where the 2023 average was $395000. The median sale price is the total number of homes sold from high to low and then finding the point in which half of the sales are above that number and half are below that number. Average sales are all sales added together and then divided by the total number of sales. Is one a better indicator o
f the market? The median may be better because in an average sales number, a small group of sales can skew the number and not give a true sense of where the market is performing at that time. For instance, if one hundred homes sold at $300000 and ten sold at $750000, the average sales price is $340000. Is that a true look at that market? Not really. The $750000 homes are an outlier in a market that leans heavily toward $300000. The $300000 homes are not going to gain $40000 in value because of ten homes that sold for $750000.
0-30 Days on the Market
Days on the market can be one source of information relating to a market’s health, but there are variables that can make it less valuable. Typically, a high number of sales in the 0-30 days on the market may indicate that buyer need, and enthusiasm are good, homes are priced in a competitive range for buyers to buy and sellers to sell and it may also indicate the inventory is slightly low which makes the market more competitive. In the Shenandoah Valley real estate market for the first six months of 2024, 1095 of the 1595 homes sales took place in the first 30 days. That is 46% of all sales in the first six months of 2024 took place in the first 30 days of being available. It is also an uptick of 8.5% over 2023.
Sold Price Compared to List Price
Homes sold in the 0-30 days on the market sold at 99.84% of list price. That is a solid number, but it is down slightly from 2023. Homes sold at 100.07% of list price in the first six months of 2023. That simply means that buyers were willing to pay more than the list price in 2023 than they are today. Today, more sellers are moving their listing price down from the original list price than just a year ago. That may indicate that there are slightly fewer buyers today, making it less competitive. A less competitive market means sellers are losing advantages they have had over the previous years. It does not appear that the market is in a huge swing one way or the other at this point in the year.
Active and Pending Listings
The number of active listings is always frangible time for buyers moving into the market. If the number is high, a bargain might be out there. But, if the number is low, sellers are going to be in control and buyers will be less likely to negotiate a favorable deal. The Winchester-Frederick County real estate market is healthiest when the market has 500-600 already built homes available. That number has been below that since August 2017. Currently, there are 268 homes available. That number contains ninety-four new construction homes which may not be available for months. Current active listings in the Shenandoah Valley real estate market are 2016. That is a 14% increase from the first six months of 2023 (1762).
Pending sales are currently at 897 homes under contract, a 2.4% increase over 2023. Pending sales can be encouraging because they are an indicator of buyer activity. The current market is battling a circular problem. Homeowners who bought during the period of low interest rates are hindered from selling by their own mortgage payment. They may want to sell but going from a 3% interest rate to a 7.125% rate may keep them from buying the house they live in if they were buying it today. For instance, a home purchased for $300000 with 10% down and a 3% interest rate would have a payment of approximately $1662 in my market. Today, that same house at $300000 with 10% down and 7.125% interest rate would have a payment of $2418 in my market. Over 12 months, which is an additional expense of $9072 per year. A family living paycheck to paycheck may be trapped, hence, the golden handcuffs. Moving up would mean a huge expense, therefore, it is easier to stay put. If they stay put, inventory does not increase, and buyers have fewer options.
The next six months will be interesting. During a political year, the Federal Reserve is less likely to lower interest rates prior to the election to avoid looking political. It is likely that interest rates will remain above 6.75% through the remainder of the year. Buyers will need to bring more money to the table and sellers may need to lower prices to attract buyers. Even with the good numbers in multiple categories, the real estate market is tenuous at best. Buyers and sellers are on a precarious teeter-totter. If rates drop quickly, a second wave of crazy prices increases may evolve. If rates decline slowly but inventory does not increase, buyer activity may slow. If sellers cannot sell for enough to aid their next purchase, they may not sell at all or keep their home priced high which may lead to a stagnant or stale listing. Time will tell, but do not lose hope. Real estate has been a strong investment for decades and a few hiccups in the market are unlikely to change that.
*Local media uses my information for their real estate reports. Your local media can use yours too. (Don't give up on local media)
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