Franklin Monthly Real Estate Recap - January 2024

--- Return to Erika's Website ---

A lot of people are surprised to hear that we get single-digit temps and snow in Nashville. 

And sure, it's not what we're known for. It really doesn't happen that often. In fact, it'll probably be melted or washed away by rain by the time I get this blog posted.

But it sure is a nice, quick change, and a forced slowdown when it happens. Waaaaay nicer than a slowdown forced by the economy, which is how we could sum up Real Estate in 2023.

Surprise #2 This Week

2023 felt BAD. It was boring, slow and laced with incredible uncertainty -- with just about everything that affects the average American's affordability for housing.

And in spite of all of this... drumroll... 2023 Real Estate values nationwide actually INCREASED from 2022. Whaaaaaat??

This was something only expected by CoreLogic, the Real Estate research firm that predicted 2-3% growth in Real Estate sales prices for 2023. Some may say that was the safe bet, because historically speaking, that is the average annual sales price growth for US homes. But CoreLogic was the only one saying this much a year ago, when most economists were predicting a tank in prices, and CoreLogic made a lot of heads turn with their prediction. (Even I was in the more conservative camp. I was only expecting prices to flatten, staying the same year-to-year). And as much as I leaned on the basics of supply and demand for my projection of no crash, CoreLogic gave it even more weight. They turned out to be on the money.

Current Facts:

• US home prices ended 2023 up by almost 3% from 2022.
• Greater Nashville ended 2023 down 0.005% from 2022. (basically flat)
• Williamson County ended 2023 up by almost 3% from 2022.
• Grassland ended 2023 up by almost 7% from 2022! (This is significant!)

These are median prices, compared year-to-year. And while we've had a significant amount of new home construction in Williamson County, it's important to note that the median square foot of homes sold here is no higher than in years past, and the price per square foot continues to consistently increase.

In fact, in Grassland alone, the median square footage of homes sold in 2023 is the second-lowest since 2019, while our price per square foot is at an all-time high. 

Our median Grassland home price is $885,000 in 2023 for a 2,966 square foot home -- the highest price it's ever been.

What to Watch

Mortgage rates are currently down to a level we haven't seen in 8 months, and have shown more stability between this 6-7% bracket than we've had in about 3 years.

As you can see in the rate chart from Mortgage News Daily, our interest rates have held steady for about a month now.

This means something to Buyers. Whether awesome or not, the rate itself isn't so much of a deterrent in a home purchase as a lack of stability in the rate. The largest group of home Buyers, Millennials, were recently polled by Clever Real Estate. The firm's results show 65% of Millennials are still willing to buy if interest rates reach as high as 10%.

Inventory is the other main item to watch. Our struggle in 2023 was so many homeowners had locked in 2021 mortgage rates, and to trade up and move would be too expensive at 2023's highs to make a move worthwhile. But with interest rates becoming more steady (and possibly dropping more) throughout 2024, more homeowners may start moving again, creating more inventory. 

And it all works in the same direction for both Buyers and Sellers: The more homes on the market, the more options Buyers have and are therefore drawn to the market. The more Buyers who are in the market, the more Sellers are enticed to move and jump in the market themselves. They go hand-in-hand. As with 2023, the key affordability factor will be interest rates. We've already seen home prices are not dropping. But there's much more expectation of more affordability via mortgage interest rates this year.

The Biggest Change

Aside from record-breaking snow totals across the Midstate in 2024, we're expecting the biggest change in Real Estate to be more For Sale signs in front yards. This won't be a huge change -- some people won't notice a difference between their neighborhood selling 10 homes instead of 5. But anything is better than what 2023 gave us.

"The market can easily absorb a doubling of inventory," says Lawrence Yun, Chief Economist for the National Association of Realtors. Though, let me be clear, a doubling of sales year-to-year is not even close to what is expected. We will be lucky with a 7% increase. And even that would just barely get us back up to 2022's amount of homes sold.

One of the most unfortunate confusions in 2023 was that people often mistook sales volume (the number of homes sold) for sales prices (the prices at which homes sold). Our sales volume decreased dramatically in 2023 while our sales prices increased. That's an important distinction that hopefully we won't have to worry too much about clarifying in 2024, because both are expected to increase this year.

As for our weather pattern... it's hard to tell what's on the horizon. The midstate has already received almost double in one day than what we'd normally total in an entire winter. But I'd like to believe the bad stuff is behind us now, and we can relish in the good that the rest of 2024 has in store for us.

--- 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!