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Local real estate market continues to grow despite rising interest rates


HARRISONBURG, Va. (WHSV) – The Federal Reserve has raised interest rates five times this year, most recently by three-quarters of a point in late September, as it seeks to tame inflation. This has slowed many housing markets, but locally the housing market continues to grow.

Local real estate agents say that while home sales are down from historic 2021 levels, they are still well above 2019 numbers. Homes in the Harrisonburg-Rockingham area are on average only 4-5 days out the market.

“The amount of demand has been there to support all the price increases and we’re going to start to see different people coming into the market who weren’t able to before, which will be a new source of demand, adding some stability there,” said Matt Ogden, realtor at Kline May Realty in Harrisonburg.

Unlike other housing markets in Virginia, home values ​​in the Valley continue to rise. The median home price in the Harrisonburg-Rockingham area is around $300,000.

“We’re actually seeing rates around 8% from 2021, which is a little surprising seeing these interest rates. I think some of that will start to settle over the next few months,” Ogden said.

Due to the nature of the valley’s main economic drivers, Ogden said the housing market in the area is much more stable than others around the state. It is one of the few markets that is still growing and where prices continue to rise.

“There is a lot of concern in more urban markets like Northern Virginia, Richmond, and the Tidewater area because of falling prices. They’re seeing pretty rapid and significant declines in those areas,” Ogden said.

While interest rate hikes haven’t slowed the local housing market the way they have in other regions, they are still weighing on those taking out mortgages.

“When you raise a mortgage rate by 1%, you’re basically adding $150 to $160 a month to someone’s payment. These are significant differences when we were looking at the 3-3.5 range last year to approach 7% now,” Ogden said.

One of the main reasons why demand and prices remain high in the area is simply the lack of available housing. Ogden said while stocks were slowly rising, they were still very low.

“The inventory is increasing and it is increasing in a very gradual way. We’ve been at a long low and the increases we’ve seen this year have barely brought us back into the 2020 range, which is still not healthy to find that balance between buying and selling,” he said. declared.

Ogden said while he expects price growth to slow next year, he doesn’t see median prices falling significantly as they have in other regions due to the level. demand.

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