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I once had a co-worker in a different industry look at herself, and then me, one February day with disgust. All she said was, "Ugh, we look like February." The cold dreary days of this month had apparently been rubbing off on our appearances.
It won't be long and these frigid temps will blend into warm weather, and we'll feel the glow of sunlight on our faces and arms again. Seriously, the 60's are in the forecast for as early as Monday. The snow can't melt fast enough.
It's a similar sentiment in Real Estate right now -- locally and on the nationwide level. I'd love to always tell you the market is hot and homes are flying, but neither of those statements are true. The fact of the matter is this market can't thaw fast enough. Sellers want to move faster, Buyers feel no urgency and everyone is waiting for a major reduction in either mortgage interest rates or home prices.
Local Home Price Drop
I've made a couple of social media posts about an unusual drop we're seeing Year-to-Year in our local median home prices. For the first time in more than a decade, we started January 2025 at a reduced sales price in Williamson County compared to the year before. This trend is playing out across the country as well.
Before you do a happy dance or sound an alarm on market corrections, though, there is more to these numbers. Realtor.com's Chief Economist Danielle Hale reports the type of homes sold is the largest factor in the sales price difference.
"A greater number of smaller homes were listed in January, which softened the median list price year-over-year. However, it's important to note that the median list price per square foot grew by 1.2%, signaling that the home values continue to increase."
I've found this to be true in my personal business here locally as well -- a greater proportion of smaller homes is being bought and sold. And obviously, smaller homes carry a smaller sales price.
In Greater Williamson County, the median size of homes Sold AND the price per square foot shown on our local MLS have both increased from January 2024 to January 2025.
In Greater Nashville, the median size of homes Sold has decreased, aligning with national trends, and the price per square foot has increased from January 2024 to January 2025, also aligning with national trends.
I always refrain from posting $/sf numbers because people tend to think that number always applies to their specific home. Reach out to me for a detailed analysis on your home value or price per square foot.
So here in Middle Tennessee, while median home prices have technically dropped. Our median values in price per square foot are at an all-time high year-to-year and it's very possible our values will continue to climb.
Shift in Mortgage Interest Rates
One thing we are used to seeing climb is Mortgage Interest Rates. And within the past 10 days or so, we've seen a steady and steep drop for every product, according to Mortgage News Daily.
This screenshot, updated today, shows every product except the Jumbo loan now in the 6% bracket. This is based on quite a few assumptions and quotes will vary from consumer to consumer. But the takeaway is all numbers are trending in the right direction for affordability.
I have quite a few Lenders I can share with you if you need mortgage interest rate quotes and counseling specific to your qualifications.
Though these rates seem to be on a steady downward trend lately, the only thing we've come to count on with mortgage interest rates is volatility. They could just as easily climb again as seen in the graph. And in all honesty, odds are slim that we will continue to see this downward trend much longer. Rates are not expected to decrease much, if at all, in 2025. And in 2026, there may be slight change. So don't hold out for any earth-shattering change with mortgage interest rates anytime soon.
Fannie Mae Researcher Kim Betancourt told Inman News, "As noted in our latest forecast, we currently expect mortgage rates to end 2025 around 6.5%, relatively little changed from where we are today, which will likely continue to hinder relief for housing affordability and home sales activity."
It's worth noting that though mortgage interest rates seem high, they have remained below the historical average since the sudden spike in October 2023.
Homes Hitting the Market
It's that time of year again when we're gearing up for Spring market. If these interest rates can manage to stay below the historical average, and home prices continue to stabilize, we may see some promising activity among Buyers starting in the next couple of weeks.
What we really need to also see to encourage more Buyer activity is an increase in homes hitting the market. This chart shows where were were with local inventory pre-pandemic, represented by the
green line. That's the line we've been trying to get back to since dramatically sinking below it in 2020. The past couple of years, we've stumbled to get off the ground, thanks to so many Sellers being locked into pandemic-era mortgage interest rates. And just when national headlines tell us about a dramatic increase in listings, Williamson County is falling short. You can see the weak
red dot, representing 2025 so far, even below where we started last year.
So if we hear about a sudden increase in inventory here locally, that will be GOOD NEWS. Most people will hear that news and cringe or worry about the bottom falling out of the market. That's not a fear where we are.
Looking Forward to Spring
I don't know about you all.. but I'm ready for Spring weather. Our local Real Estate market has also been dampened by soggy, overcast and gloomy weather. When you add in these ridiculously cold temperatures and these rounds of snow, it's no wonder no one is in the mood to get out and shop for homes.
We are all smiles in this picture, but we're going to be even happier when the sun is here to stay and the excitement of Spring breathes new life into local home sales.
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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