Why I don’t think the Harrisonburg market is slowing down right now.
Over the last few weeks, I’ve seen several articles circulating about how the housing market is cooling. That might be accurate for some major markets like California, New York, and Boston, but Harrisonburg lags behind the major markets by 12 to 18 months. Why is the market cooling elsewhere but not here? There are four reasons why:
1. Rising interest rates haven’t affected buyer activity. In theory, as interest rates rise, buying power decreases. That combined with rapid price increases creates an affordability issue. However, contract activity is still steady in our market.
2. More people are moving to our area than are leaving it. Due to that, there is still demand for homes. Unless we start seeing a mass exodus from the Harrisonburg market, I don’t think the disparity between supply and demand will change.
3. New home construction can’t keep pace. People are currently signing contracts for houses that won’t be completed for six to eight months. If you’re looking for a new build from the ground up, you could be waiting for over a year. With labor and supply chain issues, the home-building process is a mess right now. While those issues might be beginning to stabilize, it’ll still likely be another quarter or two before we see construction begin to catch up to demand.
4. Some buyers and sellers may be avoiding the market due to the reduction in buying power. This is purely anecdotal, but I’ve heard many people say they regret not listing their homes last spring so you could turn around and buy a new house at a low rate. If that is the case, it’s unlikely that those people will list now that interest rates have gone up.
If you have any questions about what’s going on in our local or national housing markets, please feel free to give me a call or send me an email. Hope to hear from you soon!