Right smack dab in the middle of summer.. and dare I say this is the moment of most relief I’ve felt as a Realtor representing Buyers and Sellers since before the pandemic. And it feels gooooooood – for all of us.
Hold onto your hats, because you’re about to get a load of intel behind why I say this.
The Numbers are Talking
I wrote in my last post about what I’m experiencing first-hand with Buyers and Sellers since the day school let out in Williamson County — ranging from below-list-price offers to government loans and contingencies being accepted again. I also promised that as soon as the June 2021 market stats come out, I’d back up this vibe in market temperature with stats and numbers.
Sure enough, the numbers are out now, and it’s all aligning with what I felt, thought and predicted.. and it leads to more information on what’s ahead for the future of our local real estate market.
Check this Out
Here in Grassland, we had 54 homes sold in June 2021! This is an incredible number compared to what we’ve been seeing. In previous months during 2021, our inventory has been so low that through May, our monthly sales numbers in Grassland hovered in the 30s! In January, only 25 homes were sold that month. Seeing the sales numbers more than double since January makes sense as to why it feels like the competition suddenly became less fierce. There are many more homes hitting the market.
Comparing this to years past, June 2020 (during Covid Stay-Home orders) had only 33 home sales. June 2019, however, as a more “normal” year, had 65 homes sold and June 2018 saw 54 home sales.
Seeing this year’s June number of 54 homes sold in Grassland points to a rebound on inventory – with Sellers coming back to the market, capitalizing on our record home sales prices. This is a win-win for all of us!
This, my friends, is helping keep homes on market a little bit longer. From May 2021 to June 2021, our average Days on Market in Grassland almost doubled from 7 to 13, which is an incredible difference month-to-month. Thirteen days on market is still about half of what was normal in June 2018 and June 2019, but at least the trend is headed in the right direction.
You’ll also see this reflected in sales prices. If this trend continues, we will likely see a decrease in the rate of appreciation — perhaps bringing our average sales price increases back to the 20% range next June — which is still HUGE.
Check out our average sales prices year-to-year here in Grassland over the past 5 years:
- June 2017: $670,793
- June 2018: $659,784 (-1.67%)
- June 2019: $851,933 (+29%)
- June 2020: $844,682 (-1.3% – during Covid Stay-Home orders)
- June 2021: $1,195,967 (+42%)
Even if our sales price increases drop to 2019 percentage levels, this is both Buyer and Seller-friendly. Sellers are still getting top dollar for their homes– I don’t foresee our values decreasing. But as Sellers search for their next home, the competition isn’t as stiff. Cheers all around!
The Million Dollar Question
All of this data, combined with the vibe I’ve been getting as people take their long-overdue summer vacations, is leading to a huge question on timing:
Is this sudden change in breathing room going to last?
The increase in our days on market falls in line with a trend we saw in years past, pre-pandemic, where the market typically would slow down and become more Buyer-friendly as fall approaches. Homes would see an increase in list-to-contract days.
This fall, we’re expecting a *slight* increase in inventory nationwide due to forbearances coming to roost. We could see a small bump in inventory between fall this year to spring 2022 with these homes hitting the market, combined with more typical Sellers hitting the market.
On top of this, Buyers are getting priced out of affordability around here. Other Buyers have just hit a wall of fatigue, and are tired of fighting over homes.
Also, mortgage rates just hit near-historic lows again last week, with 30-year fixed rate mortgages averaging 2.90 percent, according to Freddie Mac. But as the economy continues to rebound, the expectation is that mortgage interest rates will increase with it, which could decrease the number of Buyers in the market.
To add a cherry on top, I just read a Redfin report saying online searches for “real estate” are down, according to Google Trends. They report these searches fell below 2019 levels for the first time this year. This also falls in line with the vibe I’m getting about less competition for Buyers right now.
All of these points combined sound a tad bit frightening (or opportunistic) if you remember the housing market during the Great Recession. And I can hear some of you getting excited about the thought of foreclosures and prices dropping, with 2008-reminiscent “deals.” THAT’S NOT GOING TO HAPPEN. All of these points should be considered small moves of the needle — only making a large enough impact to fall in line with Buyer behavior returning to normal, pre-pandemic seasonality, or at least the most resemblance of a “normal market” that we’ve seen since 2019. This is good news for the market as a whole.
Realtor.com Chief Economist Danielle Hale says, “I still wouldn’t call the market buyer-friendly – as it continues to demand quick decisions and top dollar – but it’s finally inching in that direction.”
The Wild Card
As you can tell, I’m pretty excited about what I’m experiencing now in my day-to-day Real Estate deals, and to see a lot of the numbers back-up my vibe is reassuring and promising. However, there is one outstanding point that I believe can make the pendulum swing either way in the very near future:
SCHOOL STARTING AGAIN.
I’ve said in past posts that consumer behavior has been the 100% driver on just about every way we weathered Covid. And it’s been absolutely mind-blowing for me to witness firsthand in real estate how almost every consumer seems to get the same idea at the same time — and act on it.
This is what happened when the world shut down and most industries were bracing for another Great Recession-ish era. Instead, consumers spent a lot of money on lumber, appliances and other supplies for home renovations. The Great Reshuffling caused a boom in Real Estate, because so many people took Covid work-from-home options as an opportunity to relocate. As people stayed home more, they realized how much they didn’t like their home and wanted to move to a different house in the same area.
Most recently, the day schools let out here in Williamson County on May 21st, everyone’s attention turned to vacations. It’s like a switch was flipped and everyone decided at once to exit real estate/business mode and go full-on vacation mode.
I believe the real test on whether our market is headed for more normalcy will be this fall, when everyone comes back from their long overdue summer vacations. Will the market go crazy again? Or will Buyers continue on with pre-pandemic-like life, making real estate only a fraction of their interests again?
Until then, I’m going to continue riding the wave we’re on now, and bringing my clients with me. I just got another Buyer under contract this past weekend, and have a home hitting the market to sell next week. This is the smoothest sailing we’ve seen for Sellers who also want to buy a home, since 2019.
For questions about selling or buying a home, please reach out! I’m a Grassland area resident and I’m a Two-Time Platinum Award-Winning Williamson County REALTOR® ranking in the top 1.5% of Realtors in Williamson County. I am a recent Designee of the Luxury Home Marketing Institute, have been featured on TV and my success is the topic of an article in the July 2020 edition of Nashville Real Producers magazine. But most importantly, I specialize in helping my friends and neighbors buy and sell homes!