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Can I just tell you how awesome it feels to be getting back to a normal Real Estate market? It's nice to see homes Under Contract again, after a few weeks of staying on the market, and Buyers getting to think through their offers. It's night and day compared to what we experienced in 2021 and early 2022.
What feels "normal" or "2019-ish" is a return to the natural ebbs and flows of the Real Estate market. We had lower activity over the holidays and into the start of the year. January 2nd, my phone started ringing, and the pace of my work, and the market, has picked up steadily since then. I'm firmly expecting activity to drop sharply once Memorial Day weekend rolls around because that's just what's "normal" here in Williamson County.
I appreciate the ebbs of the market in a whole new way now -- Buyers and Sellers need it!
What's not back to "the way it was before" is the mindset of Buyers and Sellers. It's taking a lot longer to recalibrate the expectations and emotions of Buyers and Sellers right now. In general, Buyers seem very fickle right now, and Sellers are just trying not to lose their minds over the sudden change in pace.
Home Sales are Humming
Homes are still being bought and sold every day. It's happening across the country -- and right here in our own neighborhoods. And believe it or not -- our local prices have actually appreciated year-to-year.
I know, I know... certain parts of the country have actually depreciated, losing as much as 15% from their Year-to-Year median home prices. And that's not to be ignored or overlooked. Their numbers also contribute to what we're hearing on the nationwide scale.
On a nationwide scale, Fannie Mae has reported in it's Q1 2023 Home Price Index that while the rate of sales price increase has slowed (as predicted), we are still appreciating in values Year-to-Year (also as predicted).
Here in Williamson County, our home prices are actually the second-highest they've been in 15-months. See the graph below for 2022 vs. 2023 comparison, showing here in Williamson County, our median sales prices have actually increased by about 5% since March 2022.
Our Year-to-Year, median home prices are about $45,000 higher than they were this time last year.
Fannie Mae Chief Economist Doug Duncan says prices rising in the first quarter is evidence of significant pent-up demand, despite ongoing affordability constraints. He goes on to say, "Even though mortgage rates remain elevated compared to the previous few years, the acute lack of housing supply remains supportive of home prices."
There just aren't enough homes for the number of Buyers.
Our Local Home Prices
So let's dig into those. I'll break from the norm to show you the averages, because they will blow your mind. Here they are in order from highest to lowest price:
- College Grove: $1,980,068 (about to hit the $2m mark!)
- Brentwood: $1,797,108 (Brentwood has started to consistently trail behind College Grove.)
- Arrington: $1,242,712
- Thompsons Station: $1,115,319 (Where did this come from?? Thompsons Station used to always hover among the three lowest-prices.)
- Franklin: $1,080,333
- Nolensville: $1,010,258
- Spring Hill (Williamson County side only): $625,537
- Fairview: $548,174
As mentioned above, the reason these prices aren't taking a hit (and are even climbing) is because there just aren't enough homes For Sale to feed the demand of Buyers wanting to buy. Take this chart for visual comparison:
"Active Inventory" refers to the number of homes for sale each month. In this chart, the red line represents Williamson County inventory levels in 2019. That was the most "normal-feeling" Real Estate market we've had in a few years. But even the red 2019 line represents much lower inventory than we need to have an even market among Buyers and Sellers.
By similar standards, the black line represents the craziness of last year. You can see the number of homes on the market increased as mortgage interest rates went up, reaching their peak in October. Homes started hitting the market faster than Buyers were buying them. The blue line is 2023 up to March (the latest month that numbers have been released, since April is not yet finished).
At the time of year when more Buyers *and* Sellers come to market, it appears only Buyers showed up this year. Or, at the least, fewer Sellers are hitting the market than Buyers right now. We actually had a slight dip in the number of homes For Sale from February to March, which is abnormal.
Here in Grassland
The lower number of homes on the market directly affects our number of Closings. For example, only 22 homes Sold in Grassland in March 2023. This is about a 35% decrease from a normal year.
Because of this, our sales price per square foot still lands in the low-$300s (a couple years ago, high-$200s was considered high).
These 22 Closings settled from $435,000 to $2,049,000 - most of them getting at or below list price in March 2023. But one stands out -- a listing in Hunterwood by Kelly Dougherty with Village.
1021 Lucas Court sold for
$201,000 above list price in March to Buyers unrepresented by a Realtor.
These days, paying that much above list price is rare here. Sure, paying $1,351,000 on a $1,150,000 home is reminiscent of 2021. Right now in Grassland, this is the only sale with that much of a spread probably in about a year.
For those of us with property here, this bodes well for us. And a home that offers a ranch-style floor plan with a walk-out basement allows for multi-generational living, which is in HIGH demand, not only here, but across the country.
We've seen over the past year that while our trends here loosely follow the national scale, we typically perform better than the curve. I'm interested to see what April reveals and how our inventory and sales prices continue to compare.
What Now
We continue to look to builders to help bring up our inventory levels, and single-family housing starts have risen from February nationwide. There is an increase in permits pulled as well, which is another leading indicator for new construction and overall higher inventory levels.
Since we have so few existing homes For Sale, the National Association of Home Builder's Association Chief Economist, Robert Dietz, says new homes represent more than 30% of our current housing inventory nationwide. Typically, new homes only account for 10% of supply.
Another element I'm watching is the financing industry. We've seen some changes with Lending in the past week. On top of that, troubles with the banking sector may not be over yet, and investors continue to watch for any more signs of other bank failures.
In economics, the country is expecting more news on New Home sales this week, as well as a report on the first quarter's GDP (the broadest measure of economic activity) releasing Thursday. Then Friday, another report on inflation is due, measuring personal income and the core PCE Price Index. This report will bear weight with the Fed and perhaps guide their next action on whether to raise the funds rate again after their meeting May 3.
A lot to watch -- and a lot going on. But isn't that typically the case in Real Estate! It's important to have advisors in your corner when making any move right now because it all changes so quickly -- and with a change in any of these variables brings almost an immediate change in Buyers and Sellers activity, preferences and habits.
Need a plan tailored to your needs? Reach out! I'm a Franklin 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.
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