Going through the real estate market in 2018 made me feel like it would be a strong year because there seemed to be a sense of urgency.  Buyers often needed to act fast on a house they were considering.  The lack of inventory also seemed to make the medium sales price increase.

So, how was the year statistically?  Pretty good!  We beat last year as far as the number of homes that were sold.  However, we didn't beat 2016 in volume.  The lack of inventory is not drastic when compared to 2017, but if you go back to 2015 it is dramatic.  The decline in the number of houses for sale from 2015 are likely part of the reason the median sales price has been going up more quickly than average appreciation.  

It will be interesting to see if these trends continue into 2019.  We are certainly still seeing quick sales and low inventory.  

First of all, if you are dealing with a contract, you'll want to defer to the language written in the contract.  Appraisal contingencies are often not built into a standard offer but are added to spell out what happens in the even the appraisal comes in lower than the purchase price. 

If an appraisal comes back low, it is possible to challenge the appraisal report.  You can look over the report and give them alternative comparable properties that help support the purchase price. If the appraiser will not make adjustments, here is what happens. 

Seller Side
If you are the sellers you will likely ask the buyers to come up with difference in cash to make the deal work out.  To explain this more, the buyers will not be able to get a mortgage for above the appraised value and therefore would need to bring the difference in cash should they want to still buy the house.  This could look like the following:

$205,000 - Purchase Price
$200,000 - Appraised Value
     $5,000 - Buyer pays the difference in cash to be able to buy the house.

Buyer Side
If you are the buyer, you will ask the seller to reduce the cost of the house since the appraisal came back low.  So, in the above example, you would ask the seller to reduce the purchase price to $200,000.

Compromise
There is also room to compromise.  Using the same numbers as above, a possible compromise would be for the Seller's to reduce the cost of the house by $2,500 and the Buyer's to bring an additional $2,500 to make up the difference.  

Terminate
Finally, if neither parties are willing to budge, the final option is to terminate the contract. 

If you have any questions about how to protect yourself from appraisals in selling or buying a house, call or email me. 

You may have heard that the real estate market is dead over the Winter.  Is that true in Harrisonburg and Rockingham?  

As with many things, the answer is not black and white.  What we can say is that their are typically less sales and less listings in the Winter.  So, some people choose to wait until the Spring to do their real estate transactions.  While this isn't a bad idea, I would encourage you to consider Winter as an opportunity to have less competition. 

If you are thinking of selling, you may want to consider listing because there will not be as many other houses on the market.  If you are concerned about not getting as much buyer activity, you can always plan a price reduction into your pricing for early Spring. 

If you are thinking of buying, why not start looking?  If you don't find something you like immediately, you may at least get more familiar with the market and areas and be ready to buy when the right house comes a long. 

There may not be a formal sign up yet, but you may have noticed a space in the Walmart shopping plaza has opened up for business. Wisam’s Salon and Barbershop opened their doors in mid-December to showcase their vision for highly individualized cuts and cleans. Upon entering the shop, you will notice that this is a place aimed at high-end quality, with marble floors, center lounging area, and energetic atmosphere. However, the price tag for these cuts will surprise you, with men’s haircuts starting at $15 and women’s starting at $25.
 

Overall, the market dipped a little in November.  Overall, 2018 is still on track for having more sales and a higher median sales price than 2018.  It will be interesting to see how December plays out as the rest of the sales come in. It is possible that we will see less sales than 2017 but it will be close.  

Like many terms in the real estate industry, it can be hard to really get a handle on what a term like "PMI" means, but we’re breaking down the facts behind PMI once and for all. Read on to see what it actually means, how it works, and why it may have gotten a bad rap.

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“PMI” stands for Private Mortgage Insurance.

These days, it’s common for lenders to require it in order to be approved for a mortgage if you plan on putting less than 20% down on the home.

Since buyers who make lower down payments have less automatic equity in the home, they’re considered a bigger risk. Therefore, banks require these buyers to take out a mortgage insurance policy for their protection. These policies shield the bank against loss in the event that the buyer stops making mortgage payments. And, if the buyer defaults on the loan, they have the ability to recoup their investment through the policy.

It’s important to note, however, that this policy will not protect you, as the buyer, if you decide to stop making mortgage payments.
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If that happens, your credit score will suffer and you could end up losing your home to foreclosure.

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How your PMI functions will depend largely on the loan program you choose, so you’ll want to ask your lender to go over the specifics with you in depth. That said, there are a few factors that impact every policy.
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They are:

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Again, the rate you pay will depend largely on the loan program that you choose. FHA loans are standardized while conventional ones are more variable. With a conventional loan, your rate is determined by the lender, based on your credit score and loan-to-value ratio, or how large of a down payment you’ve made. Typically, the higher both those things are, the lower your rate will be.
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As a general rule, PMI tends to run anywhere from $30-$70 dollars per month for each $100,000 that was borrowed. If, for example, you purchased a $300,000 home, you could generally expect to pay between $90-$210 per month towards your policy.

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Payment methods also vary by policy. However, there are a couple of common options. All FHA loans, as a rule, are paid in the same manner. They come with an initial upfront payment towards your premium and then a recurring annual payment each year that you hold the loan.
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Conventional loans, on the other hand, work on a case-by-case basis. In some instances, your PMI is tacked on to your monthly mortgage payment, along with your mortgage interest and other fees. Like these fees, this portion of the payment does not go towards paying down your principal or building equity.

In other cases, you may have the option to make lump-sum payments or to finance your entire premium through a smaller loan.

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This is another instance where FHA and conventional loans differ. Since FHA loans are government-backed, they require that you pay PMI for the entire length of the loan. Conventional loans, on the other hand, typically will allow you to drop your PMI once you build up more equity in the home. Usually, once you’ve paid off over 20% of the loan. However, you’ll want to check with your lender to verify the details of your specific policy.

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If you’re against paying PMI, you do have some options to avoid having to take out a policy.
These are the most common ones:

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Typically, if you can qualify for a conventional loan and make a down payment of 20% or more, you won’t be required to take out a policy.
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Thanks to the GI bill, the PMI requirement is waived for qualified veterans. You also have the ability to finance up to 100% of the home’s value.
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Many physician loans also forgo this requirement.

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Since portfolio and non-conforming loans each have their own unique set of terms, you may be able to find some options without a PMI requirement.
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Piggybacking” refers to the practice of taking out an additional, smaller loan to cover your entire PMI premium upfront. However, keep in mind, that with this tactic, you’ll have an additional monthly payment to contend with, one that may come with the higher interest rates that are common among smaller loans.


Though having to pay PMI is not the most fun thing in the world, it’s not always the root of all evil either. It’s crucial to talk your lender about the loan as a whole before choosing the best option for you.
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Often, the PMI requirement gives banks enough security to allow them to offer you better interest rates than they would if it wasn’t there, meaning you may actually end up paying less in fees over the life of your loan, all things considered. Be sure to do your research before agreeing to any specific loan terms.



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This article originally appeared on OpenListings.

To give an overview of the GIS system, I have asked Doug Sexton- GIS Coordinator - Planning Department, Warren County, VA, to answer a few questions:

Introduce yourself and why you are an expert on a GIS.
My name is Doug Sexton and I am a GIS Coordinator for local government in Virginia. I became involved with GIS (Geographic Information Systems) nearly five years ago as a Technician responsible for collecting data on new construction developments & infrastructure (homes, commercial sites, roads, utilities, etc.) through GPS methods & corresponding analysis, and have since furthered my interest and skills in the profession through learning experiences on the job administrating GIS servers, software services, & web applications while pursuing a post-BA education in GIS.

For those who aren't familiar, what is a GIS?
My definition of GIS (Geographic or Geospatial Information Systems) changes every day due to the large scope of the field and is never adequate to address all components, but in short can be thought of as a digital inventory of features on the Earth that combines the spatial location of these features (coordinates and geometry) with their attributes (name of a river, address of a home, owner of land). By projecting our three-dimensional planet onto a two-dimensional plane and associating information within a tabular database, we are able to perform area and distance calculations on the geometry of features within software systems, and provide summaries, counts, and reports on features we designate and filter through location or attribute queries.

How is a GIS most commonly used?
In local government, GIS is most commonly used as a device to aid planning, zoning, and building departments so that all permitted activities follow the land and building use within each jurisdiction's code. For instance, applying for a building permit on a lot of land that is in the floodplain can be preventing by simply visualizing a floodplain 'layer' on top of a selected lot. Automatic triggers can be built into software systems to take advantage of these capabilities (ie. no additional subdivisions allowed on a property that has already exceeded its max allotted divisions; no commercial use on a property zoned agricultural, or no agricultural use on a property zone residential etc) and most localities have some sort of software that leverages these capabilities. In addition, Emergency Communication Centers rely on address points and road center-lines derived from localities GIS data to provide effective emergency services from call centers to responders. There are many applications of GIS and with the role of location-based services expanding, the uses will continue to grow and evolve in the private industry from marketing, to real estate, and various commercial and industrial businesses.

How could the average person take advantage of a GIS?
Most localities offer an online GIS that provides the ability to view and interact with their data. A prospective home buyer would be able to visualize the location of their property on this system, view the zoning, and representation of their property lines (it is important to note that GIS boundaries do not constitute a legal survey!) and the relationship that this property has to various other geo-centric 'layers' available on the system: school districts, emergency service & postal zones, rivers and streams, distance to nearest school, hospital, fire station, etc. By simply opening the map application on our phone and plotting a location for distance and directions we are using an advanced GIS routing system. Recreationally there are some great services out there that for hiking, mountain biking, fishing, etc that enable an individual to do research before visiting a destination to take advantage of all that area has to offer, with the trend of these services moving in the digital direction, a wealth of information can still be derived from a static map.

Click Here to Explore the Harrisonburg GIS
Click Here to Explore the Rockingham County GIS

​You’ve already driven by this new restaurant more than you might think. Montpelier is located at the front of the new Hotel Madison, and is now open for business with breakfast, lunch, and dinner being served in an intimate atmosphere. The executive chef of Montpelier, Michael Collins, had previously worked in five-star restaurants throughout the country.  We caught up with Michael to get a taste of his vision of Montpelier, and had the pleasure of meeting his culinary team in the back. He tells us that his team is the key to his success, and after trying a few of his dishes we completely agree. 

​First, a little bit about the vision. Montpelier makes a point to source all their food locally, and Collins has personally visited farms in the area to pull in the best beef, dairy, and seasonal food. This means a menu that offers seasonal plates and high quality ingredients. In addition to the dining menu, they also have a bar area with local beers and wines at the ready. The bar reflects the intimate atmosphere of the restaurant, to which Collins thanks local valley cabinet makers. Private space can be reserved as well for meetings, special events, or parties.

​If you walk into Montpelier from Main Street, you will be met first with a lovely coffee shop. They use the new Harrisonburg coffee roasters Chestnut Ridge Coffee for their brews, and offer light food options for the go. Once 4pm hits, the space also transforms into a wine bar. This space will host wine tastings as well as offer pairings with their wine. Come spring, they will be adding outdoor patio seating so you can relax with your coffee or wine under the shade.

​During our visit, we decided to try a few of Montpelier’s dining menu dishes ourselves, and we were blown away by the flavors. The appetizer, a smoked brisket over nacho chips with smoked queso, beans, avocado, and chilies, was brought out on an impressive log serving board. This is unlike any nacho appetizer I have ever had. The smoked brisket was tender and had a unique bbq tang, and the size alone makes this an excellent appetizer for a large group. However, this didn’t stop us from almost finishing the entire plate ourselves while our entrees were being prepared. 

The two entrees we tried were the open-faced blackened salmon and the prime beef pastrami on rye. Salmon is a delicate dish to prepare, and it is clear that Montpelier put time into perfecting this. The smoked flavor of the salmon combines wonderfully with the soft character of the fish. This dish is served with market greens and toasted whole-grain bread. With the second dish, pastrami on rye, I can safely say this is the best pastrami sandwich I have ever tasted. They pile on the meat, which is wildly flavorful on its own, and top it with cheddar fondue, slaw, and a fried egg. I will absolutely be coming back again to grab another one of these.

​The prices are very reasonable, only in the $10-18 range for most of their dishes. We have nothing but high praises to give, and are excited to try more. Montpelier is quite a versatile place, set up for a full dining experience as well as on-the-go travelers, private events, a place to quietly work, or to have an evening drink.
 
You can check out the menu below or visit their website.. Highly recommended. 

​After seeing a slight dip in sales in September, October has come back with a vengeance.  There were 18% more sales when comparing October of 2018 to 2017.  Furthermore, the median sales price is up, and the median days on the market is down.

These statistics are likely still driven by the fact that there are still not enough homes on the market.  Home buyers less than half the amount of homes to choose from now then they would have in 2015 in October. 

While we are hitting the winter months, these statistics still indicate it's a strong time to sell your house.  

If you have been familiar with the real estate market for the past year, you may find the title of my blog post surprising.  The inventory has been low and the demand has been high.  This has resulted in bidding wars on properties and higher than usual sales prices compared to list prices.  This all indicates a sellers market. 

To further explain this, I have been comparing  the sales prices to the list prices in Harrisonburg and Rockingham for around 5 years now.  Houses have consistently been 3% under asking price. However, this year has been different.  I ran statistics earlier in the year and houses were selling at 2% under asking price.  This was one of the indications that we were in a sellers market. 

I ran the years statistics this morning and we are back to houses selling for 3% under asking price.  While I think this is good news for buyers, I do not think that this means we have a fully balanced market.   Inventory is still low.  We are still seeing houses selling quickly and bidding wars on popular listings.  

I am curious to see what this will mean as we look towards the housing market in 2019.