Grassland Monthly Real Estate Recap: April 2022

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I spoke with an Appraiser this morning, as he came out to evaluate a home for a set of my clients. The winning offer for this home is six-figures above list price which has become a bare minimum in Grassland to really have a shot at winning.

But a month ago, that wasn't necessarily the case. List price offers were seeming to make a comeback. Buyer competition hadn't seemed as steep and offer prices and terms were starting to come back to a more palatable range. We were even starting to see Appraisal contingencies return!

It seemed like, for a minute there, the crazy market we've been experiencing for two years may be inching toward a cool-off. And that would make sense with our rising prices and interest rates, weeding out the Buyers who can no longer afford a home here.

The graph I've posted gives some anecdotal evidence of the vibe I was getting. In March 2022, Williamson County had almost a $15,000 drop in our average monthly sales price from February after several months of double and triple-digit price increases.

During my morning conversation with the Appraiser, he said, "It's not over yet, though." He's predicting another round of market intensity, almost like last spring, hitting us right about.. now.

Method to the Madness

It's very possible that the slight "cool-down" we witnessed in March was a direct result of world events in Ukraine coupled with hype over increased mortgage interest rates. Hints of a world war, and coming from record low mortgage interest rates to an increase at all seemed to cause Buyers to pause -- even if just for a second.

It's an interesting behavior pattern previously witnessed 2 years ago when Covid originally hit the United States and Stay-Home orders were in effect. Everyone held their breath and stood still for about 2 weeks, then went on with their lives, spending money, renovating homes and buying/selling -- here in Grassland, anyway.

When events unfolded in Ukraine and mortgage interest rates started shooting up, seemingly simultaneously, during first quarter 2022, we saw the exact same pattern. People held their breath for a couple of weeks, and then seem to have resumed buying homes as though nothing has changed.

Though it's the end of the brief "ultra cheap" loan era, we're still tracking well below the average annual percentage rate for a 30-year fixed loan (7.81%) since Freddie Mac started keeping records in the 1970s. And though part of our Buyer pool is eliminated due to affordability in home prices and interest rates, it's not expected rates will solely drive the decrease in Buyer frenzy anytime soon. Robert Heck, Vice President of mortgage at Morty says, "The continued limited supply in the market is currently driving demand and outweighs any impact on affordability so far."

When you look at the changes in our supply vs. demand, last spring felt like slim pickin's. This year, comparing March 2022 to March 2021, we've had 12% fewer homes sell in Williamson County. Our Days on Market has dropped from 19 to 8. And in that time period, Williamson County homes have sold for almost $300,000 more on average than they did a year ago, in March 2021.

To put this into perspective, Zillow recently reported that homes across America likely earned more money last year than the people who own them. 11 of the 38 cities they studied saw home prices increase by $100,000 in 2021. The highest median salaries are in San Jose, California, where an Oral Surgeon makes about $229,000 per year. Our homes in Williamson County made more than an Oral Surgeon in the highest paying market in America. WOW.

The National Association of Realtors reports the rate of price appreciation across the US is 16.9% as of April 10th. The 4-week period before then was 15%. A year ago, the national rate of home price appreciation was 13%.

Grassland's Gains

By now you're aware that Williamson County stats are a good peek into Grassland's market performance, with Grassland usually hedging ahead on price appreciation and demand. This month is no different.

Grassland is just ahead of Williamson County averages -- by about $75,000. Our average Grassland residential sales price came in at $1,198,120 during March 2022.

On average, this sales price is about $40,000 over list price, and we had a record TWO DAYS ON MARKET during March 2022. Surprisingly enough, we actually had a higher average sales price during March 2021, which could be due to new construction sold during that time, though we've had a similar number of sales year-to-year.

Here's how our average sales prices in March 2022 compare to other areas across Williamson County:

• Brentwood: $1,814,241
• College Grove: $1,565,337
• Arrington: $1,429, 337
• Grassland: $1,198,120
• Franklin: $1,057,308
• Nolensville: $946,093
• Thompsons Station: $859,615
• Spring Hill (Williamson County side): $666,974
• Fairview: $470,649

The Big Question

Is the Appraiser right? Are we on the verge of another big increase in values and Buyer intensity? 

Honestly, I think he's onto something, even if it's short-lived. Our inventory is the number to watch, as that continues to be the factor playing into our demand from Buyers. And the gap between supply and demand is narrowing. But now that we're past the beginning of interest rate increases (not even 17% rates stopped homes from selling in the '80s.), we will likely continue to have more Buyers than Sellers. That is, here in Grassland, anyway.

Even as housing prices and mortgage rates continue to climb, Redfin reports a record 32.3% of users across the country wanting to move to a new area during the first quarter of 2022. And where are they targeting? Among several places, Williamson County, TN.

The number of Americans wanting to migrate right now is higher than the first quarter of 2021, when 31.5 percent of users were considering relocation. Redfin credits this to a "new wave of migration" motivated by sheer necessity, as housing markets continue to grow more expensive. It's what I've been predicting for MONTHS: Property taxes, inflation, higher costs of living are all on the rise nationwide. This is further fuel on the fire for those wanting to leave the higher density and higher taxation states, basically as refugees.

The Appraiser I spoke with said already, he's seen a ramp up of local offer prices and terms in the past couple of weeks that is reminiscent of Spring 2021. Here in Grassland, we've had quite a few homes in the past week or two that have listed with the showing frenzy, sight-unseen, cash offers hundreds of thousands over list price and little-to-no contingencies like what we saw this time last year. His speculation is the increase in interest rates and price appreciation could be what's fueling this next surge. Buyers want to get in before it's too late for them. 

A Light in the Tunnel?

This summer and fall could be the next time of opportunity for a narrowing gap in supply and demand, creating healthier deals between Buyers and Sellers. A newly-released Realtor.com housing report shows 64% of home sellers plan to list their homes by October. They'll be listing at a time when Buyers are still out in full-force, and will get great terms and pricing when their homes hit the open market.

This is also good news for Buyers as perhaps more inventory is in the pipeline, providing more options to those who have been hungry for housing, but striking out.

The real estate portal reports older millennials in their late-30s to early-40s will likely lead the charge, leaving their starter homes and upgrading.

Hold On Tight

So buckle up! We may have had a chance to catch our breath in the past month -- but that's likely all it is. Just a breather until the next opportunity comes past the spring surge.

I'll bet when April is closed out and those numbers are in, we'll start to see higher price averages again, and an increase in list-price-to-sales-price ratios. Even an Appraiser agrees the prices we have now are here to stay, and another period of crazy growth is already in the works, even if it only lasts a few weeks.

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For questions about selling or buying a home, please reach out! I'm a Grassland area resident and a Multi-Platinum Award-Winning Williamson County REALTOR ranking in the top 1.5% of agents in Williamson County. I am a Million-Dollar GUILD Member of the Luxury Home Marketing Institute, my market insights are regularly featured in broadcast media, and my success planted me on the front page of a December 2021 Nashville-area Magazine. But most importantly, I specialize in helping my friends and neighbors buy and sell homes.