Franklin Monthly Real Estate Recap - August 2023
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August hasn't escaped without our fam paying a visit to one of our favorite little critters at the Nashville Zoo!
Dottie the Spider Monkey plays peek-a-boo like she's in today's Real Estate market -- now you see her, now you don't.
That's the story for Buyers AND Sellers right now - Both seemingly in hiding until affordability becomes more realistic. And it's looking like the only way that'll happen in the foreseeable future is through an easing of mortgage interest rates.
Our Current Prices
This is the question I get the most -- Are our prices crashing? Everyone has their eye on this factor as the one that will crumble first and most dramatically. And honestly, it's been the question every year since 2008.
Most every data source in the Real Estate industry right now agrees that we've already experienced our nationwide "crash" this year - but it played out more like a "dip." Prices almost everywhere in the US appear to be on the rebound after bottoming out within the past 12 months. Perhaps no other graph could demonstrate the dip in prices -- and current rebound-- as well as the one I've put together of our local Grassland market:
There are more homes in broader Williamson County, which helps create more consistency in our monthly data. You can see less volatility when comparing thousands versus dozens. HOWEVER - the current pattern (black line) shows us at the second-highest median home price we've reached in more than a year and a half:
And nationwide -- Single family home prices are just a smidge off from where they peaked in June 2022, as seen below:
This graph was put together by the National Association of Realtors, comparing home prices nationwide over the past 3 years. The CEO of Benchmark Realty, Phillip Cantrell, recently shared this in a Zoom meeting, and now he's making an appearance in my blog. Ha!
Prices Across Williamson County
I'm just going to come right out with the sneak attack from College Grove! Holy Cow, this is an all-time high median sales price in that part of Williamson County!
The rest of July's numbers, listed below (the latest stats since August isn't yet complete):
- College Grove: $1,997,000 (almost $2m!)
- Brentwood: $1,295,000
- Arrington: $1,212,450
- Franklin: $950,366
- Nolensville: $845,000
- Thompsons Station: $675,000
- Spring Hill (Williamson): $555,000
- Fairview: $451,277
Why We're Holding Value
You've heard me say this a million times -- and if you follow me on social media, you've already seen this graph. So I won't spend much time on this point.
It's inventory. Or lack thereof.
The blue dot represents our local dip in inventory at a time when it's typically heading toward a seasonal high.
You may have seen news headlines talking about inventory being the highest it's been all year, nationally. That is true, on the national scale. But even at the highest it's been all year, we're still at HALF the historic mean of inventory levels.
And in Williamson County, as you can see from the graph above, our inventory has not gone up hardly at all this year.
The reason? Mortgage interest rates!
As of last week, the 30 year fixed reached the highest it had been in 22 years!
While we've gotten a bit of a reprieve this week, rates remain in and around the 7% bracket.
This leaves hardly any incentive for Sellers to sell their homes and let go of their sub-3% mortgage rates they locked into during 2021 and 2022.
Silver Linings
If you've followed me for a bit, you know by now that I can find opportunity in just about every situation.
Today, the opportunity is for those who can still afford to be in this market. If you can afford to buy a home that you love, do it. Do it while no one else is fighting for that same home. Do it while everyone else is sitting on the sidelines scared. Do it while you can still take time making a good decision, and have a full inspection period, ask for repairs and include alllll the contingencies.
I expect once interest rates go down (and they will), you're going to have a lot more competition. And while rates may make your purchase even more affordable, with more Buyers coming back out, prices will likely go up.
That phrase "Marry the house, date the rate" is borderline cringey now. But it's actually a strategy worth considering. You can always refinance when rates go down. But you can't do anything about more competition and an increase in home prices.
What's Ahead
In all likelihood, we'll have higher home prices and lower interest rates pretty soon. That's what all the data is pointing to for the foreseeable future.
Interest rates could start dropping as early as Q3 2023, and extremely likely by Q1 2024. We're being teed up for a pretty robust Spring market, with these factors aligning with pent-up Buyer demand.
Inventory, on the other hand, is a lot more likely to be a years-long issue. It may take almost a decade for Sellers to want to get out of their sub-3% mortgages, it'll take that long for builders to close the gap, it'll take that long for supply to catch up to demand, as Millennials enter the home buying market and Baby Boomers take longer to age out of their homes.
A wild card factor is the federal government. We've got another FOMC meeting in September where The Fed will consider raising the funds rate again, depending on how we're all faring in the fight against inflation. I'll be keeping a close eye on those events, as well as our economic reports preceeding the FOMC meeting. It'll be interesting to see how markets react, and therefore mortgage interest rates, over the next few weeks.
Meanwhile, the real estate market feels a lot like how Dottie's parents looked last week. Just sort of hanging out, monkeying around, with no motivation to move.
--- Return to Erika's Website ---
Thinking of moving? Need a plan tailored to your needs? I'd love to help you. I'm a Franklin resident and a Multi-Platinum Award-Winning Williamson County REALTOR ranking in the top 1.5% of agents locally. I am a top producer within Benchmark Realty, the largest brokerage in Tennessee and among the largest in the country. My continuing education includes several designations and my experience keeps me up-to-date with fast-changing market trends. 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. Why look further when you've got a friend and neighbor who is among the best in the business!
