Franklin Monthly Real Estate Recap - June 2023

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We've spent our family time so far this summer learning about all sorts of aviation -- from our own Franklin back yard to the air show in Smyrna -- thanks to my 10-year old son's new future career obsession. 

It really is fascinating, for the whole family, witnessing the heights these jets and other aircraft can soar.  And the incredible turns they make without a moment's notice is remarkable.

Pictured here are the Blue Angels, flying last weekend in Rutherford County. They are an extraordinary set of Navy pilots, performing under incredibly high-pressure conditions.

And you know this wouldn't be an Erika Kurre blog post if I didn't somehow relate it all to Real Estate. Ha!

It's true though -- This past month in our local Real Estate market has been nothing short of jaw-dropping. I'm talking about an intense increase in sales pace and a dramatic increase in prices to finish out May-- both in Grassland and in the Greater Williamson County area.

And just like these jets flying, everything with our Real Estate market has turned upward almost on a dime. The intensity of our upward results has even surprised me. I haven't expected so much so soon.

What's Happening?

I know I say this a lot -- but it really does just boil down to supply and demand. Sure, the Buyer pool is smaller now with higher prices and mortgage interest rates. But Seller's have reacted even more sharply by deciding not to sell (right now, anyway).

Our inventory across the country, and right here in Williamson County, continues to hover below 2019 levels, which were considered low back then.

The latest data released by the National Association of Realtors puts these numbers into perspective:

New construction homes are selling at pre-Covid levels again. But you can see from this chart, our nationwide level of resale homes (homes that already exist - which is the bulk of homes), is about a million fewer than our 2017 - 2019 levels. And we're about 2 million homes short of where we were during the height of the pandemic!

Closer to home, I've broken down our numbers month-to-month, showing a similar pattern as the nationwide scale:

The blue line indicates 2023 so far, as of the end of May. You can see, at a time when our inventory pattern usually rises, we have instead decreased in the number of active homes on the market - to below December levels! - which is pretty crazy! Safe to say this pattern has rarely, if ever, happened in our area before.

Cause and Effect

What usually happens when inventory goes down? We usually see an increase in home sale prices. And wow -- the increase in our local sales prices month-to-month for May has been about as sharp as the abrupt decrease in inventory.

The black dot for May indicates a $910,000 median sales price for Williamson County -- which is neck-and-neck with the SECOND HIGHEST SALES PRICE IN 17 MONTHS -- as high as the prices from the final boom (early Spring 2022.)

Suburb-to-suburb, here is how they each rank in current median prices:

• Brentwood: $1,450,000
• College Grove: $1,438,000
• Arrington: $1,000,000
• Franklin: $948,000
• Nolensville: $912,000
• Thompsons Station: $675,000
• Fairview: $575,000
• Spring Hill (Will Co): $555,000

These are all extraordinary -- not something predicted in this stage of the game. If I'm being honest, I though we would possibly see a dip in results month-to-month and year-to-year, with leveled or increased results like this coming possibly later this year.

Here in Grassland, we have a smaller number of homes bought and sold on a monthly basis (34 versus thousands), so our numbers are more volatile. But you can see a similar pattern for our home sales prices, on an even more dramatic scale.

We finished up May 2023 at $950,000 which is the highest our prices have been in a year (We hit $1,183,000 in April 2022).

To revisit the supply and demand equation, it's no surprise our homes sold for $50,000 more this May than last May, when you consider inventory. Last May, we had 23% more homes on the market.

What's Ahead

There is nationwide speculation that we may have seen the "bottom" of our market. The long-anticipated and awaited "crash" has come and gone, and that Real Estate prices are on the upswing again -- or at least stabilized, but not dropping any more. I'm not ready to say that yet, though these results all seem to point to it.

There are still factors to watch in our market, including the Fed meeting that took place Wednesday, where Chairman Jerome Powell announced they are currently pausing their funds rate hike campaign (which was widely expected). This is due largely to inflation showing signs of cooling down to 4% from 9% back in June 2022 -- but still sitting at twice as much as the target goal. Since results lag, they're going to give it time to breathe before seeing if any more action is needed.

The jobs report is another thing I've been keeping an eye on, because most Buyers can't buy a house without money or the ability to get a loan. A change in this could dramatically send Real Estate into a tailspin and perhaps give us a replay of 2007. Here's what it looks like right now, geographically, with gains and losses:

So many other elements of our market are not similar to where we were during the Great Recession. Foreclosure rates are still among all-time lows, and lending practices have only tightened with bank failures and the Fed's action in the past year, giving us the tightest lending standards that we've had since 2013. And even with higher interest rates, people are still buying and selling homes.

In fact, there is a wave of Buyers -- both personal and investors -- who have been sitting on the sidelines for years, rubbing their hands together and waiting on another "crash." They think they'll have a chance to buy homes on clearance again, and hope every day that today is the day. I've been saying for about two years that this group of Buyers alone will be the main reason our prices won't legitimately crash. They're called "shadow buyers," and the minute they think they're getting a deal, they'll jump into the market, and provide enough demand, acting as a floor to our prices.

Of course, time will tell on all of this. But right now, there is enough data and confidence in the market for you to take ahold of the joy stick and maneuver through this market in a way that puts you on top of the world. Reach out to me if you need a co-pilot!

--- Return to Erika's Website ---

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.