STRASBURG – As the leaves on trees and petals on flowers begin to open, so does the real estate market up and down the Shenandoah Valley.
Spring and summer serve as the peak seasons for the real estate market, said Abby Walters, a realtor with Sager Realty.
“Our rental market is hot,” Walters said. “You put a rental on, it gets a lot of showings. It gets a lot of applicants because there aren’t a lot out there.”
Low inventory for rental homes has created a nice market for those looking to put their property on the marketplace, Walters said.
In Warren County, Kelly Martin, with ERA Brown and Rutherford, said the six-month rental market — October through March — has seen the number of rentals go down compared to the same period as last year (45 units to 34 units rented) though the prices have ticked up slightly on the low end (from $400 to $550.)
“Supply is down, and has been down for the past two years,” Martin wrote in an email. “General rule of thumb is more listings do come on in the Spring and Summer selling seasons, but we have not had an onslaught of listings during those times more like a trickle.”
Rentals, Walters said, are something she and other realtors tend to steer clients away from. Over time, she said, if they are looking to save enough money for first and last month’s rent on a $1,300 a month home, they are likely able to afford a mortgage that comes in around $1,200 a month.
“if people’s income and credit are good enough to buy, they are trying to buy,” Walters said.
The most popular homes, according to Walters and Martin, are three-bedroom, two-bath, single-family homes.
In Shenandoah County, sales have been strong, according to Walters and her Sager Real Estate figures. Sales in February 2019 ranged from $50,000 to $599,000, with most buyers settling in the $150,000 to $200,000 range. Sales increased a little more than 30 percent compared to last year, from 33 units in February 2018 to 43 in February 2019.
ERA Brown and Rutherford’s Warren County sales are up. According to Martin, they have sold 262 homes over a six-month period compared to 266 homes over the same period last year.
Sager’s Warren County sales went down in February 2019 compared to 2018, with 28 sales compared to last year's 45.
Walters said she couldn’t put her finger on why Warren County’s numbers dipped this year. She said their figures were normally steady due to its location off of Interstate 66.
Weak rental numbers and low inventory are caused, in part, Walters said, by the relatively strong and stable market.
“The only problem we’re having is we have low inventory on the resale side of things, too, because the sellers are knowing if they sell the house, yeah, they’ll get good money,” Walters explained. “They’ll sell quickly. But what are they going to buy to move into when its low inventory? That’s the flip side of the coin, and I think that might be holding some people back.”
Martin pointed to steady sales over the six-month period to say the market is stable and predictable, though with the busy season coming, it will be a time to gauge the market more appropriately.
Walters brushed off doom and gloom about a looming recession, saying the market doesn’t feel the same as it did between 2005 and 2007 when the real estate market grew unwieldy.
During that time, she said, the low inventory drove prices up, well past what properties were worth. She said she would see bidders on a $215,000 property offer $225,000 to make sure they got it. Appraisals would come back showing the property worth that inflated price, she said.
“Somehow those homes were appraising [higher than their value] and that’s when the prices got inflated,” she said about the market before the recession. “I’ve been experiencing appraisals coming low the past couple weeks. So maybe lenders and appraisers and everybody has wizened up and learned their lesson from that.”
Real estate isn’t constrained to what’s ready to sell. Jason Seal, the owner of Valley Contracting Group, said he has seen a rise in interest in custom homes. Right now, Seal said, he has five projects that are in some stage of development.
“It does seem like people are a little more motivated the first quarter of this year for some reason,” he said. “In January alone, I had over 10 inquiries about people wanting to build a house.”
Seal said not all of his inquiries result in a new home, but he hasn’t really slowed down at all in recent months.
Potential buyers have three options when shopping for a home, Seal said. They can either take what’s available, buy something with renovations in mind, or build something from scratch. The third option, Seal acknowledged, is the most expensive, but it often appeals to homeowners who are moving to the area, rather than making their first purchase.
“Most of my customers, [about] 70 percent of my customers are second home [buyers] or [in] retirement; they reside in another county,” Seal said, “and they’re choosing the Shenandoah Valley to make that their final destination.”