Franklin Monthly Real Estate Recap and 2024 Predictions - December 2023
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Elf magic is in full swing at our house.. and it seems like our housing market has had a sprinkle of holiday magic itself. (emphasis on sprinkle)
And when more people can afford housing... you can imagine what this means.
We're still a long way off, though, from being on the better side of this Real Estate roller coaster of the past 2 years.
See the attached pic for approximately where each of the main loan products are coming in as of December 20th, according to Mortgage News Daily.
What's Happening Now
Mortgage interest rates are on a consistent drop -- so far, dropping faster than they rose from July to October this year. In fact, we are in a rate bracket we haven't seen since mid-May.
In the past month, Mortgage Bankers Association has reported an uptick in the amount of mortgage purchase and refinance applications as rates have dropped-- until last week. It's not completely unusual to see a decrease in purchase applications the closer we get to Christmas. And while refinance applications are up 18% than the same week a year ago, purchase applications are down 18% from the same time last year.
Literally, seven homes were sold in Grassland during the month of November.
This is a rare occurrence of mortgage rates decreasing while still having less Buyer competition.
Going forward, the Mortgage Bankers Association expects purchase loans to increase by 15% and refinanced mortgages to increase by 56% in 2024. The 15% projected increase is a leading indicator that we are poised to have more Buyers in the real estate market next year than we had in 2023.
The reason they're not expecting a bigger jump than 15%? Affordability will still be an issue for most.
The Broken Record
I know you are likely rolling your eyes every time I drop the "A" word. Affordability has been the source of blame for a lot of what's happening (and not happening) in our Real Estate market. I've talked a lot about it, because frankly, it really is the source behind why we're seeing so many strange things happen.
Take our most recent monthly market stats, for example. Greater Nashville saw a 2% increase in home values Year-to-Year in November, to end the month with a $470,495 median sales price. At the same time, Williamson County saw a 4% decrease in home sales prices Year-to-Year in November, to end the month with a $910,000 median sales price. Williamson County's median sales price is nearly double the price of Greater Nashville. Why did Greater Nashville see an increase when Williamson County didn't? $470,000 is more affordable.
Home Prices Across Williamson County
To give an idea of our local affordability, here are the median sales prices for each area of Williamson County as of November, the last full month of Closings:
- Spring Hill (Williamson Co): $540,000
- Fairview: $604,745
- Thompsons Station: $699,900
- Nolensville: $959,316
- Franklin: $1,000,000
- Arrington: $1,066,590
- College Grove: $1,204,698
- Brentwood: $1,400,000
Franklin had the lowest number of Days on Market (17) while having the highest number of homes sold (102).
Brentwood had the next-highest number of homes sold (35) while staying on the market the longest (42 DOM).
Again: Affordability.
How Grassland Compares
As of the end of November, Grassland's median sales price is $1,094,000 -- about $94,000 above the greater Franklin median price, and $184,000 above Williamson County's median sales price.
Comparing Year-to-Year, Grassland's median sales price is $169,000 higher than in November 2022. You can see the roller coaster that's gotten us here over the past 12 months, indicated in this graph:
Significant to mention is the number of homes sold in Grassland is typically pretty low in November, usually mirroring the numbers of Arrington and College Grove.
These are smaller communities yet while the number of homes in each of these areas has increased due to all the new construction the past several years, the number of homes sold have actually decreased.
Regardless of the size of city, town or location across the country, this fact has been widely true lately: The number of homes sold have continued to get lower and lower throughout the two most recent years -- especially in 2023.
Here's a visual example that's local, though it's basically the same pattern everywhere:
Seven.
This is what I've been talking about when I've been saying inventory is low, and that's helping us keep our home values high.
As much as Buyers haven't been able to buy, Sellers haven't wanted to sell lately. And when there aren't many homes to sell, we get this "bottoming out" of home sales. (not to be confused with a bottoming out of home prices.)
Winds are Changing
It is indeed believed that we are at the bottom-most level of home sales right now, according to Mortgage Bankers Association. Fannie Mae expects we'll be on the upswing in number of homes sold nationwide by Q2 2024, and once it begins, this continued increase in inventory will continue for the next two years.
It's also believed that mortgage interest rates will continue to drop through 2025, albeit slowly. Very much like the increase in inventory. It'll be a slow grow for these two things over the course of the next couple of years.
The increase in inventory plus decrease in interest rates are expected to pull the Buyers out. And usually, once that happens, more Sellers will jump back into the market. The more Sellers (and therefore inventory) in the market, is even more incentive for Buyer activity.
All this not to mention the pent-up demand between both Buyers and Sellers -- those who have wanted to be in the Real Estate market but have held out.
It's not all roses -- Affordability will continue to be a concern. None of these factors will move the needle enormously to create a major shift. And sales price increases are expected to be nominal.
But there will be an increase in pace that will be felt by those of us in the market.
Meanwhile, the market right now is working at holiday pace. The two elves in my home are making their own headlines with a ginger + bread house. Ha!
Merry Christmas and Happy New Year to you all, and I hope to hear from you in 2024!
--- 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!
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