Grassland Monthly Real Estate Recap: November 2022

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November is shaping up to be a less dramatic version of 2019, in Real Estate, anyway. A lot of the seasonal norms have returned -- among them is more home supply and fewer Buyers.

Because of the decreased competition among Buyers, Staging has made a massive return. No more empty houses and the details matter!

Sellers are working against three things right now: 

1). Higher home prices 

2). Higher interest rates

3). Higher inventory

We've also got the holidays and a Buyer mindset where Buyers don't quite think we're at the bottom of the market yet -- and I would agree. I think it's right around the corner.

The Less Dramatic 2019

I'm picking on 2019 because it was our last "normal" year in Real Estate. But so far, November 2022 doesn't sound less dramatic than 2019, does it? Our inventory is up, number of homes sold is down, our Buyer demand is down, and all of this has put downward pressure on our prices here in Williamson County, making a lot of people either nervous or extremely excited. But consider this:

Here in Williamson County, our average sales price as of the end of October remains above a million dollars -- at $1,020,309. Sure this is a decrease of -$131,000 from September. But looking year-to-year, here's how our average values gains are stacking up:

• October 2021 - October 2022: +$101,000
• October 2020 - October 2021: +$202,000
• October 2019 - October 2020: +$49,000
• October 2018 - October 2019: +$67,000

As you can see, we're averaging a sales price of $101,000 higher than this time last year. And $419,000 higher than four years ago! Whether this is good or bad is debatable, and depends on your Real Estate goals. But it gives perspective to everything you're hearing in the news right now.

Looking Deeper

More specifically in our Grassland area, we actually sold more homes in Grassland last month than in October 2021 -- and only 4 fewer than in October 2019. So our current activity is right on track.

Our average sales prices this month have also started to stabilize, only increasing to $926,775. This is just a +$2,500 difference in our average sales prices from October 2021.

Comparing to October 2019, our values remain $341,000 higher than they were 3 years ago!

We will likely see another dip in sales prices between October and November, and again from November to December. But year-to-year, I expect we'll continue to hold steady.

It's what I've been saying for months: We're not losing our values. We're just losing steam in the rate at which we gain values.

It's interesting to see how other pockets of Williamson County are reacting to this economy. For example, Nolensville has passed up Franklin in average sales prices. And Arrington continues to remain on top -- a strong lead in average sales prices, while also having the fewest homes sold:

• Arrington: $1,571,887 (11 homes sold)
• Brentwood: $1,366,941 (42 homes sold)
• College Grove: $1,243,557 (20 homes sold)
• Nolensville: $998,275 (39 homes sold)
• Franklin: $975,522 (130 homes sold)
• Thompsons Station: $909,591 (27 homes sold)
• Spring Hill (Williamson County side): $711,267 (43 homes sold)
• Fairview: $540,775 (15 homes sold)

Rock Bottom

As discussed, our prices locally continue to increase year-over-year. I keep hearing questions about when we will reach "the bottom." I am no fortune teller, but I'm hearing more and more chatter agreeing with what I've already stated a couple of months ago: There are certain signs pointing to December as being our weakest point in the market for the foreseeable future.

Here's why:

This chart shows inventory -- The number of homes on the market -- each month for the years of 2019 and 2022.

2022 is the black line. 2019 is the red line, and is only on this graph to show you a typical seasonal pattern. You can see the number of homes For Sale starts cranking up after February and continues to increase through June. Then the roller coaster starts to drop into July and through September. After September and through the holidays, Buyers typically check out for the holidays and the homes that haven't sold remain on the market as a few others enter, and that's why we have an increase beginning again in October. Buyers and Sellers typically pause through the holidays, and it all starts over again in January.

You can see our black line of 2022 is trying really hard to get back up to 2019 inventory levels (which, at the time, was considered low). Believe it or not, with all the increased inventory right now, we're still far below where we need to be, in order to be considered a balanced market.

However, I believe we'll start to see a point where those red and black lines kiss by the end of November and into December.

This will relieve one of the problems for Buyers right now, which is Inventory. To be paying these high prices with these high interest rates, they have to LOVE what they're buying, and a lot of Buyers don't feel like they've seen enough options to fall in love right now. More inventory through December will give them options.

It's also likely that mortgage interest rates will continue to fluctuate. We saw a half-point decrease on November 10th. We've since experienced another slight drop in mortgage interest rates this week, putting us in the solid 6% range. Rates could go up and down like this for the next several weeks. But I expect as we get closer to spring, rates will be on a more consistent downward trajectory. I don't think we'll see 2-3%. But getting into the 5% range soon is a very real possibility. This will eliminate another hurdle for Buyers.

Once either of these factors plays out (or both!), and we're past the holidays, I expect we'll start to see more Buyer activity again -- and before you know it, Buyers will be competing with each other again with multiple offers.

Already this week, we saw an increase in mortgage applications, which is a leading indicator that more Buyers will soon be entering the market.

The Strategy

Think about your Real Estate goals -- because this market is not One Size Fits All. Some Buyers may need to wait. If you're a Buyer and waiting to see movement on any of these factors, your timing may look different than another Buyer who has a need that depends on timing. Sellers will obviously have different strategy than Buyers, and from Seller-to-Seller, strategies may differ depending on life circumstances, financial needs and economic conditions.

I will say this: For Buyers wanting to snag a deal, you can have your pick of homes with little-to-no competition right now. Sellers are paying to buy down Buyer's interest rates on loans. Inspections, repairs and appraisal contingencies are all back in the equation. Is there a possibility this will also exist in Spring? Yes. But we *know* what's happening now.

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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.