Market Temperature So Far
You may have been hearing from certain news outlets that August home sales are down across the country – and that’s true.
In August 2021, we had 532 home closings — That’s 95 fewer closings across Williamson County than what we had in August 2020. However, it’s two more closings than what we had the month before, in July. Overall, our amount of home sales is considerably lower than where we sat in most of 2020. Though our home prices continue to rise.
What does this mean? Most people reading this right now are worried this means the market is pulling back because home prices are too high. And while that sounds logical (and could be the case after Spring 2022), what’s really happening right now is THERE AREN’T ENOUGH HOMES TO BUY.
We continue to have more Buyers in our market than we have homes For Sale. The tightening on the numbers of home sold is actually due to there not being as many homes coming For Sale than in previous months and years– not because Buyers aren’t buying them.
And look what this is doing to our average home sales prices between August 2020 to August 2021:
- College Grove: $799,634 —> $1,430,481 (+79%)
- Brentwood: $1,148,961 —> $1,243,072 (+8%)
- Franklin: $727,122 —> $1,045,748 (+44%)
- Arrington: $852,552 —> $881,147 (+3%)
- Thompsons Station: $574,613 —> $805,072 (40%)
- Nolensville: $587,795 —> $720,259 (+23%)
- Spring Hill: $430,417 —> $535,001 (+24%)
- Fairview: $394,185 —> $427,146 (+8%)
A few things really stand out to me, seeing the changes in these numbers:
- For the first time since I’ve been paying attention in 2018, College Grove has unseated Brentwood in average sales prices! College Grove is now the most expensive place to live in Williamson County! This is most likely due to new construction and the larger lot sizes that College Grove is known for right now. A lot of the Buyers coming from more high-density cities are wanting to spread out and avoid metro areas.
- Brentwood only increased by 8% in average sales prices year-over-year as of August, ranking among Arrington and Fairview in Williamson County’s home price growth. This surprises me considering all the $100k over asking, cash offers we saw, experienced and heard about in Brentwood during spring and summer.
- Thompsons Station has unseated Nolensville in percent of increase for average home sales prices AND rate of growth — by a large margin. Until now, Thompsons Station has been known as one of the most affordable cities in Williamson County.
- Spring Hill saw more growth than Nolensville! This could be due to it being much more affordable than Nolensville now.
Speaking of disappearing affordability, those of us living in this little pocket between Franklin and Brentwood are experiencing average sales prices of over a million dollars right now! For many of us, it makes our heads spin, considering we bought not long ago for WAY less than that.
Here is our year-over-year market snapshot:
- August 2020: 57 homes sold at an average price of $895,715
- August 2021: 38 homes sold at an average price of $1,106,849
This is a 24% increase in our average Grassland sales prices with HALF of the inventory sold compared to this time last year. Again — not because Buyers are disappearing. It’s because Sellers aren’t selling and new homes aren’t being built fast enough.
Fannie Mae, The Federal National Mortgage Association, has chimed in on this as it applies to a national scale, saying “We continue to see the primary impediment to sales being a lack of homes for sale.”
This is an extremely relevant and hot topic right now: How long can/will this last?
To see our prices increase so dramatically in Grassland and throughout the county –and so rapidly– gave so many of us the hives this spring. Many who lived through the Great Recession just more than a decade ago have been holding their breath for another “bubble pop.”
I’ve been saying for months and I’ll say it again: This is not a bubble, and there will likely be no “pop.”
HOWEVER, I feel like we have left the real estate frenzy behind (for now) and entered back into seasonal behavior patterns with ebbs and flows, typically slowing down buyer and seller behavior as we head into the holidays. It’s important to note that Williamson County’s real estate market never stops, though. This market is a 365-day affair (maybe 364.6 – Christmas Day is usually almost quiet.)
Along with typical seasonality and a lack of inventory, though, the other factors leading to this less aggressive market right now is Buyer Fatigue. Buyers just need a break. It’s tough being a Buyer right now, and so many have hit the pause button on home searches just for the sake of unplugging — even if just temporarily. And let’s not forget about home prices. Some Buyers are simply just priced out now, unable to afford living where they want to be, because with every month, the prices of homes have increased by at least $20,000 — too much to be offset by these low interest rates.
The main risk to the housing market affordability factor is how inflation will coincide with this.
“Of course, some share of homes in forbearance will likely end up listed for sale, but given existing supply tightness, we do not believe the end of the moratorium will fundamentally change the sales pace or the path of house price appreciation over the next year,” Fannie Mae forecasters said.
We saw double-digit increases in home price appreciation during the past 18 months of the pandemic. Fannie Mae economists expect this to continue for the rest of the year, and perhaps cool in 2022. The mortgage association is predicting 5% year-over-year sales price increases by the end of 2022, as opposed to the national average of 17% sales price increases seen at the market’s height this spring.
This is the opposite of a bubble popping, which would be a negative percent of home sales price increases. But to still grow 5% in our prices a year from now is still considered great shape.
The Local Take
This is my boots-on-the-ground perspective, so hear me out. I expect we will have another crazy spring market in 2022. I think a lot of the Buyers who could afford Williamson County this past spring will still be able to afford it next spring. They’re just taking a break and resting up before going through the mental meat-grinder of losing in multiple offer situations again.
Though I thoroughly expect continued multiple offer scenarios, cash offers and bidding wars, I don’t think Spring 2022 will be up to the level of crazy as Spring 2021. But even a hint of that is enough to continue in our price growth and ward off foreclosures.
Meanwhile, I’m working with all of my Buyer clients right now to get them into something ASAP. Like, before Christmas. Local Lender Joseph Porter reports mortgage applications have increased by 8% as of September 10th, which is the highest level since the frenzy in April. So there are plenty of SERIOUS Buyers still out there and prepping their pounce for the first home that comes to market, checking all their boxes.
What’s the saying in Tennessee? “If you don’t like the weather, wait a day.”
That’s pretty much what I’m telling you about this Real Estate market. The temperature fluctuates so dramatically and so quickly. If you’re considering a move anytime in the near future, consider diving in during this seasonal change. The heat has gone away, but we are far from cold. You’ll have less competition as a Buyer, and if you have a home to sell, it won’t exactly linger.