After such turbulent times in the local and national housing market, even modest growth in home sales activity is a welcome sight to homeowners.
The past two years of increased home sales (+4 percent, +9 percent) have been encouraging, and have been accompanied by stabilization in prices (+1 percent) over the past year.
The question, now, for many people is: What we should expect over the next few years?
Home Sales Will Continue To Increase
Despite an increase in home sales over the past two years, there were roughly the same number of home sales in 2012 (864 sales) as took place 12 years earlier in 2000 (829 sales).
During the same timeframe, however, the population of Harrisonburg and Rockingham County has increased from 108,322 to 127,354 according to the Weldon Cooper Center.
This 17.5 percent increase in population suggests that current home sales (if the same percentage of the population purchased a home each year) should be closer to 1,015 home sales per year.
As such, it seems safe to say that the current level of buyer activity is still lower than historically normal levels and we should see continued growth in home sales over the next several years.
Median Prices Will Slowly Start To Increase
Many other areas of Virginia and our nation experienced significant declines in home values over the last five to seven years. The Harrisonburg and Rockingham County housing market has not seen significant declines in this area.
After topping out at a median price of $195,500 in 2008, our local market’s median price has only declined by 10 percent over the past four years to $175,000.
Of note, this still marks an overall 51 percent increase in home values over the past 12 years. As we head into 2013 and 2014, we should expect to see further moderate increases in home values in our area, likely an increase of between 1 percent and 4 percent per year.
Inventory Levels Will Stay Relatively Low
There are fewer homes on the market now (572) than we have seen in several years. Overall inventory levels have dropped 15 percent over the past year, and 27 percent over the past two years.
These lower inventory levels mean that many would-be sellers have decided to stay in their homes, perhaps after not being able to sell in a reasonable timeframe.
These lower inventory levels do mean buyers will have fewer choices, but they are also helping to stabilize the local market.
After five years of unsustainable increases in home sales and home values, and then five years of dizzying declines in both of those areas, we are finally seeing stability and moderate, sustainable growth in our local housing market.
Given the diverse and stable local economy, we should expect to see further improvement in our market over the next years.
Scott P. Rogers, author of HarrisonburgHousingToday.com, is an Associate Broker with Funkhouser Real Estate Group in Harrisonburg, Virginia.