Franklin Monthly Real Estate Recap - October 2023

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Just about the only thing scarier than national news headlines right now are some of the homes listed For Sale. It's like some of them are going all-in on the Halloween vibes this year!

This pic is from a daytime Buyer Tour here in Grassland. It definitely caught our attention! Another detail piquing my interest right now is how well this home -- and every other home in Williamson County-- is holding value. Surrounding counties have barely budged, even dropped a bit in year-to-year values. Williamson County median prices have actually increased -- by another $58,000!

Value Check

It's true a national recession is looming, and I think it's more likely than not that we will slip into that status during early 2024 (Silver Lining: lower mortgage interest rates).

On average, a typical recession impacts home values by about 5%. In extreme cases, like the Great Recession (which is very unlikely to happen right now), it's closer to a 13% impact on home values.

Our most recent median sales price here in Williamson County is $928,310 as of September -- the highest our home values have EVER been in any September. See the chart for our local month-to-month comparison as well:

As you can see, our current $928k median sales price is also the second-highest our home prices have been over the past 2 years. So regardless of what anyone else is saying, we're doing REALLY well here!

Should we fall into a recession, worst-case-scenario numbers based on the Great Recession would be about a $120,000 value loss. In this unlikely worst-case-scenario, we could expect our median home prices to land around $807,000 at the lowest point, which would put us back to just about a year and a half ago. You can see on the above chart, $807,000 is consistent with our January-February 2022 values. It is extraordinarily highly unlikely that we will ever see pre-pandemic prices again. I cannot stress that enough. A crash like the Great Recession would NOT put most of us here in Williamson County underwater with our mortgages. And it wouldn't happen overnight. Most of us will likely be just fine.

What is most likely to happen if we see a hit to our values in the next recession is the average 5% loss. As mentioned above, this is how a typical recession impacts values across the country. 5% of $928,000 is $46,000. This would bring our values to about $882,000, which is higher than where we were last month. < Pshhhhhhhh >

My personal expectation is we won't even see that, though. You and I both know Williamson County typically performs with more resiliency than the average market in Tennessee or across the country. If the country sees a 5% average price loss, Williamson County may hardly flinch. Especially if interest rates go down with a recession, the Buyers who are still employed will have more buying power and may have their own silver lining of opportunity.

Consider Before Spring:

One thing to keep in mind if you are thinking of jumping into the Spring market: We still have more demand than supply. That's why our values are still so high, even with 8% interest rates. And as long as this continues, we are creating pent-up demand -- for both Buyers and Sellers. Which means when interest rates drop, the flood gates will open.

The more Buyers who come out will lure Sellers onto the market as well -- Sellers who have waited on the sidelines for more Buyers and lower interest rates. But I still think we'll have a hard time catching up to Buyer demand. "The housing market tends to lead the economy out of recessions. We're the first ones in and the first ones out," according to Odeta Kushi with First Ameridan Financial Corp. This suggests when it's all said and done, home prices will be on the upswing, as is typical.

My Prediction on What's Staying, Coming and Going:

• Mortgage Interest Rates: Going down, soon enough
• Home Values: Staying and likely going up.
• Picky, difficult Buyers: Staying as long as home prices are high, even when interest rates drop. They're just paying so much that it's painful.
• Stubborn Sellers: Staying. They're in such a great position financially. Likely not changing.
• Longer Days on Market: Staying. At least through a recession.
• Inventory: Going down, especially though December. Will likely go up after January when more Sellers typically hit the market.
• Buyer demand: Going down, especially through December. Will likely go up after January and with a vengeance if mortgage interest rates go down.
• Me: Staying right here, walking with all of my Buyers and Sellers through all of the changing nuances of our market. There is going to be a lot to keep up with!

All of these predictions are based on my *local* expectations.

And a side note about my predictions.... I blogged and posted on Social media during the Stay-Home orders in 2020 that those months were the BEST time to buy Real Estate since the Great Recession. I couldn't have been more correct, and I don't expect we'll see another opportunity again for price decreases, interest rates so low, so much home value growth so quickly (and to keep it). The clients who I helped during that time won - BIG. They are sitting so pretty right now and I couldn't be happier for them that they pushed past their fear and followed my advice.

Don't let fear spook you from jumping on your next big Real Estate opportunity.. an opportunity that may be right around the corner. Sometimes these opportunities are disguised, don't last long, or they're hard to distinguish without an advisor. (Much like a staging prop in a possibly-haunted house For Sale.)

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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!