Diverse Economy Keeps Housing Market Afloat
Local Foreclosures Slowing As Home Prices Creeping Up
The wide variety of employment sectors represented in our local area has provided stability to our overall local economy, which in turn has helped our local housing market remain more resilient than many around the country.
Our current unemployment rate (5.3 percent) is well below the national rate (7.3 percent) and that difference was even more pronounced three short years ago when our local unemployment rate was 6.5 percent compared to the U.S. unemployment rate of 9.5 percent.
Our relatively low local unemployment rate has kept foreclosures from becoming too significant of an issue in our local market.
While there have been more foreclosures than normal in recent years, they have tapered off over the past year.
Between 2000 and 2007 there were only between 50 and 100 foreclosures in any given year in all of Harrisonburg and Rockingham County. This jumped up to a peak of 270 foreclosures in 2010, but has since declined to only 181 in the first 10 months of 2013.
With fewer people losing their jobs in the economic downtown, we saw fewer people losing their homes to foreclosure. We also did not see as large of a real estate bubble that could have caused more local homeowners to be underwater on their mortgages.
The most significant increases in home values in this area happened between 2002 (median price = $136,000) and 2006 (median price = $227,000). Home values shot up 67 percent during this four-year period, which was certainly not a sustainable rate of growth.
However, due largely to the stability of our local economy, we did not largely enter into the declining spiral of rapidly increasing foreclosures paired with rapidly decreasing home values. In the following five years 2006 to 2011 our local home values declined only 18 percent from $226,000 to $186,000.
Since that time, we have seen home values start to increase again.
If there had been greater turmoil in employment in our local area, more people would have lost their homes to foreclosure, which would have dragged home values down even further, as experienced in many larger metropolitan areas.
The strength and diversity of our local economy have helped us to weather many storms in the past, including the recent collapse of the housing market in the United States and ensuing struggles in the U.S. economy.
As economic indicators start to trend more positively, our local area seems poised to continue to grow and diversify.
Exciting new projects such as Innovation Village @ Rockingham will likely continue to spur on our local economy, providing further stability for our local housing market for years and decades to come.
Scott P. Rogers, author of HarrisonburgHousingToday.com, is an Associate Broker with Funkhouser Real Estate Group in Harrisonburg.