real estate news
for the Shenandoah Valley of Virginia
Interest rates ticked up slightly last week and mortgage applications increased nationally. This may indicate more buyer activity in the weeks to come. Overall, the local real estate market remains steady. Most indicators show signs of continued strength in comparison to 2019, especially in the Rockingham, Shenandoah and Page markets. However, the Augusta County market continues to lag behind last year's performance.
Beyond the numbers, our firm is experiencing many multiple-offer situations and some homes remaining on the market for only days. This is an indication that supply remains low and owners who are contemplating a sale this year should be talking with a real estate professional about listing their home on the market soon. Click here to download the full report (pdf).
COVID-19 Real Estate Impact Survey
The Virginia REALTORS® survey of REALTORS to gauge the impact of COVID-19 on home buyers and sellers. Here are the survey results from the latest report. Click here for a PDF.
Our Analysis: Sellers who have their homes on the market continue to hold on the asking price and about one-third of potential sellers are deciding to wait to list their home. This is contributing to an already low supply of homes available to buyers. However, approximately half of all buyers are deciding to delay their home search. While only about 15% of Sellers are reducing their prices to attract buyers, between one-third to one-half of buyers are expecting lower prices.
Source: Virginia REALTORS® survey of members.
* No data reported during this time.
Joe Funkhouser, President of Funkhouser Real Estate Group, discusses the COVID-19 impact on real estate.
Interest rates hit an historic low this week reaching 3.31% as reported by Freddie Mac, while mortgage applications continued to be far less than this time last year. With buyer activity continuing to be strong in the Shenandoah Valley, sellers should consider getting their home on the market. Call a real estate professional at Funkhouser Real Estate Group to discuss the opportunities of selling your home in today's market and best practices during COVID-19.
Click Here to download the full report (pdf).
Economic Impact of COVID-19
As of last week, more than 20 million U.S. residents had filed for unemployment. With those numbers increasing weekly, it has caused a shock to the labor market that was thriving before the COVID-19 pandemic.
These numbers, along with the plummeting stock market indices, point toward the possibility of an economic recession.
However, despite such ominous indicators, we can’t be certain that a recession is actually occurring, nor what the long-term impacts may be, until we have more data, explained VA REALTORS® Chief Economist, Dr. Lisa Sturtevant.
“An economic recession is two consecutive quarters where gross domestic product is negative, so we don’t know if we’re in a recession until after it has already happened,” Dr. Sturtevant explained. “What we do know is that recessions are often closely linked to unemployment, and we are currently experiencing a lot of job loss in this country.”
Sturtevant assumes that if unemployment numbers continue to rise and reach the 10-15% level, such conditions will have a major impact on the housing market.
The current impact that we’re seeing across the country, however, is variable across markets. This variability depends largely on how robust individual markets were prior to COVID-19 and how local and state governments have dealt with shelter-in-place orders.
There are current trends that we’re seeing here in Virginia. In a survey sent to members across the Commonwealth, Virginia REALTORS® found that 90% of respondents said that COVID-19 is negatively impacting their real-estate business.
“This is most directly related to people postponing or delaying their search for a home, or sellers not putting their homes on the market due to COVID-19,” Sturtevant explained.
While there are trends that we need to continue watching, economists agree this potential recession will be much different than what we experienced in the 2007 and 2008 economic crisis.
The crisis that began in 2007 was closely linked to subprime mortgage loans and resulted in the bursting of the housing industry’s asset bubble. Since the financial crisis was so closely associated with the housing market and questionable lending requirements, home values dropped drastically and foreclosure activity dramatically rose.
But the current economic downturn is driven by a public health situation rather than conditions within the housing market, Sturtevant explained.
“The realities of the 2007 and 2008 economic crisis were exacerbated by 0% down payments and balloon payments, along with an increase in housing inventory, and these are not realities in today’s markets,” Sturtevant said. “So this downturn is going to be quite different.”
The strength of the housing market prior to COVID-19 was due, in large part, to a lower level of inventory and an increase in millennial-aged first-time homebuyers, which are still realities today despite this public health crisis.
But the question remains: What will be the long-term impact of this economic slowdown and how will we rebound?
“The honest answer is that no one knows for sure, but there are specific patterns to be aware of,” Sturtevant said.
One of the major factors will be when the virus is contained. New data suggest that the peak in the number of COVID-19 cases in Virginia is ahead of the predicted timeline, which could potentially mean that the virus will be contained earlier than anticipated. The earlier the virus is contained, the more quickly the economy will rebound.
The second major factor to track is unemployment numbers and whether the implemented federal stimulus measures help mitigate economic disruption.
Whether the federal stimulus measures work—and as a result, businesses are able to ramp back up and people are able to return to their jobs—will largely determine if we see a sharp turnaround and a recovery of employment, Sturtevant explained.
However, if unemployment claims continue to rise and it takes longer to contain the virus than projected, then we are likely looking at a slower recovery that could have longer-lasting impacts on the economy.
Despite the lingering unknowns, the important thing to remember is that the state of the economy and the housing market were both strong prior to COVID-19, and this will be beneficial for our economic recovery, Sturtevant said.
Funkhouser Real Estate Group is continuing to follow these trends and we will provide updates as we learn more; but currently, the Shenandoah Valley real estate market is showing different trends than other markets in Virginia.
While surveys have shown a decline in activity statewide, associates at Funkhouser Real Estate Group have remained relatively active as properties are still going on the market and contracts are still being signed.
“While some markets are seeing a great impact on activity due to COVID-19 restrictions, others are seeing very little, and so far, the Shenandoah Valley has experienced a small impact on the real estate market,” Kemper Funkhouser, COO of Funkhouser Real Estate Group, explained.
Additionally, we are not currently seeing any signs of home values dropping, nor do we expect this to be a major result from this latest economic downturn.
“Our firm is very active in working with buyers who are making offers and sometimes facing competition to secure the home they desire,” Kemper explained of the current state of the company. “We are also working with sellers who are enjoying multiple offers within days of listing their home. While this is not the experience for everyone, the market is very active.”
The area is growing and the number of potential buyers has increased over the years, outpacing the number of homes on the market. So, despite any slow-down in activity, there still remains a steady number of active buyers looking for homes.
As conditions continue to potentially change, including loan requirements and the fluctuation of interest rates, the importance of having local and professional guidance when buying a home has become paramount.
“Professional expertise from a local REALTOR is more important today than ever before,” Funkhouser said. “In times of market changes, it is essential to have a local expert who can guide you with accurate and timely information to make informed decisions.”
This is why our focus at Funkhouser Real Estate Group continues to be on the education of our associates, so that we can provide the best guidance to our clients during these times.
We are still holding professional development meetings online with our associates twice-a-week so that we remain up-to-date on new data and market trends. As we continue to learn more, we will keep you updated on what you need to know about the real estate market during COVID-19.
Funkhouser Real Estate Group will be tracking the Shenandoah Valley real estate market each week during the COVID-19 situation. Be the first to know about weekly trends. Check back each Wednesday as we release the market activity report for the previous Monday through Sunday.
Click Here To Download A PDF Version
Have questions about how these trends may affect your purchase or sale decision? Call one of our real estate professionals for expert advice.
COVID-19 Real Estate Impact Survey
The Virginia REALTORS and National Association of REALTORS has conducted a survey of REALTORS to gauge the impact of COVID-19 on home buyers and sellers. Here are the survey results: Click Here for a pdf version.
While some buyers are hoping that prices will come down during this crises, the data shows that sellers are not reducing prices at this time. While nearly 28% of sellers in the United States are reducing prices, only 12% are across Virginia.
The expectations of buyers across Virginia and the Shenandoah Valley are more congruent with those of sellers. While 63% of buyers expect lower prices nationally, less than 30% of buyers in Virginia expect lower prices.
The entry into homes has been a concern for both buyers and sellers during the COVID-19 crises. REALTORS report that 59% of buyers nationally have decided to delay their search and 51% across Virginia. There are still many buyers active in the market.
Source: National Association of REALTORS®, survey of members, April 5-6;
Virginia REALTORS®, survey of REALTOR® members, April 10-11, 2020
As part of Governor Northam’s Executive Order 53, the real estate industry is considered a professional service that may remain open. However, in response to social distancing measures and with the best interest of everyone involved, Funkhouser Real Estate Group has moved to a work-from-home environment and has encouraged all of our Associates to utilize teleworking and virtual options as much as possible.
At Funkhouser Real Estate Group, this has been a relatively seamless transition since our focus on technology has kept us at the forefront of the industry.
“Our company has always invested in the latest technology to support our associates and serve our clients, and this has become especially important during these times,” Joe Funkhouser, founder and president of Funkhouser Real Estate Group, explained.
Associate Jack Rose says he’s been utilizing technology to remain connected with his clients, conducting virtual property tours and offering guidance via phone, email, or through video technology, like Zoom, using whichever method is most comfortable for the client.
Likewise, Associate Ronald Flores says he’s also been utilizing virtual property tours as part of his listings so interested buyers can have a better sense of whether the house might be a good fit for them before scheduling a showing.
While much of business can be conducted virtually, agents are still offering in-person showings for interested buyers. All open houses, however, have been postponed at this time in the interest of everyone’s health and safety.
For individuals or families interested in viewing a home, our associates are conducting showings while implementing all CDC-recommended social distancing and preventative measures, including disinfecting surfaces, wearing gloves and masks, and remaining at a safe distance while showing a home. For interested buyers, our associates recommend that only essential individuals attend a showing and to avoid touching any personal property while viewing a home.
Our responsibility at Funkhouser Real Estate Group is to ensure that our clients, whether buyer or seller, feel safe and supported during this transaction; so if there are any concerns about showing your own home or visiting a property, please reach out to an agent who will be happy to discuss any additional preventative measures.
While there are certainly new procedures in place for entering a real estate transaction, those of us at Funkhouser Real Estate Group have seen the real estate market in the Shenandoah Valley holding steady thus far, indicating that it is still a good time to buy or sell a home.
Joe Funkhouser has weathered seven recessions during his 48 years in the real estate business, including a period in the 1980s when mortgage rates were at nearly 20%, the Savings & Loan collapse, the dot-com bubble, and the most recent mortgage crisis that began in 2007; and he says this one is different.
“While the real estate market slowed greatly during those times, we are experiencing a different environment with the current COVID-19 issue,” Joe explained. “Prior to this situation, our economy and the fundamentals of the real estate market have been the best we have seen in modern times.”
He added that interest rates for mortgages are still very favorable for purchasers and, overall, the local market has remained robust.
Our associates have reported similar thoughts, noticing marginal changes in their individual businesses and no sweeping price cuts in the Shenandoah Valley to date.
Associate Tom Schroeder says his recent listings have received great interest, with one receiving a full price contract last week within just five hours of listing.
For properties moving toward closing, many of the title companies, including West View Title, have been conducting closing processes electronically to ensure they are doing what is socially responsible for their clients and employees.
Chris Jones, Attorney and Owner of West View Title, says they have developed a drive-up system that has been working well for clients.
Prior to a closing appointment, a purchaser sends a copy of their driver license to the title company for verification. Then the purchaser drives up, picks up their final documents from a dropbox outside, and the title agent conducting the closing will discuss the entire contract, page-by-page over the phone. When the purchaser is ready to sign, the title agent can watch through the window as the purchaser signs in their car and places the signed documents back into the drop box. The title agent can then notarize the closing documents and repeat the same process for the seller.
While this ensures that closings can continue, there has been a decrease in the number of closings that can occur in a single day because of this newly required approach, so clients must be prepared for closings to take slightly longer than normal.
This has been the best option, Jones explained, because despite e-notarization, which allows commissioned Virginia electronic notaries to notarize documents online via audio-video technology, being legal in Virginia since 2011, there are several issues with that process, including cost and the requirement for “wet” signatures on the deed of trust.
Once the paperwork is signed, recordings are still being made at a relatively normal pace, despite reduced hours at the courthouse. Some title companies are preparing for the worst if courthouses close all together, but that is not currently the case.
As things do continue to change in response to the COVID-19 situation, Funkhouser Real Estate Group is continuing to focus on staying up-to-date on conditions, and educating our associates about any changes that would affect our clients. We are currently holding virtual professional development meetings with our associates twice-a-week to ensure that we all remain informed and able to continue serving our clients fully.
Joe Funkhouser says he believes this focus on education and the strong relationships that our associates have built with service providers will continue to ensure clients can find their next home or sell their current home, even during this difficult time.
While we are doing our best to continue serving our clients, there are still uncertainties as to how COVID-19 will affect the overall economic activity, including the housing market, but we are watching the situation closely and helping clients make informed decisions.
Rose says that for an interested buyer or seller, the most important action to take is to reach out to a professional at Funkhouser Real Estate Group, who can help guide you through the process and answer any questions you may have.
While there may still be unforeseen obstacles in the future, we feel confident things will return to normal. Through it all, our dedication to our clients remains unwavering, and we will always be here to guide you through every move.