I’m taking a different approach in this post, setting most of the stats aside, and just being open with you about the “vibe” right now in our market.
In just a few days, we will have the Williamson County Real Estate numbers for June, giving us more insight on how our market is performing right now, and where it’s headed. And of course I’ll share that with you when it’s available.
Until then, I can tell you: The vibe, conversations and experiences I’m facing every day have turned out to be pretty spot-on with gauging market temperament this past year. And it seems like suddenly, tempers have cooled.
Here’s What’s Happening
The tight reigns on the market here in Williamson County have suddenly felt a bit looser these past few weeks. (emphasis on “a bit.”)
What I mean is, for the first time since March, the competition for homes here doesn’t seem as tough.
- For example, I have one home currently under contract right now at list price (not above), and it’s not a cash Buyer! In fact, this buyer is financing with a VA loan.
- A colleague of mine just closed a home where the Buyer had a Home Sale contingency!
- I submitted an offer for a Buyer client of mine at $15,000 below list price on another home last week. The Sellers said they wanted to accept, but then something changed with their job situation, so they ended up not selling. But to know they even considered it…
These were all homes that hit the market – none of them were off-market deals.
It didn’t seem like ANY of the above scenarios were happening with homes on the market 6 weeks ago. From March through May this year, these things were simply unheard of! Keep in mind, though, it’s still not an easy market. We’re still seeing A LOT of multiple offer situations, and many homes are still going for above list price, as there are still more Buyers than Sellers.
To show you some hard numbers on this, I put together this graph of our market stats for May (I know, I know… numbers. But just look real quick!):
In the last row, you’ll see our average home sales prices are up $280,000 year-over-year (keep in mind May 2020 was during lockdown), selling at an average of $879,046 in May. But the most significant number on this graph is in the middle of the bottom row:
Our average home sales prices in Williamson County only increased by
To put this in perspective, the month before that saw a $52,000 increase. The month before that saw a $25,000 increase. The month before that saw a $50,000 increase! You get the idea.
Even before seeing this number, I noticed this slight sudden drop in Buyer intensity beginning Memorial Day weekend. May 21st, to be exact. That was the day Williamson County Schools dismissed for the summer – and it’s like everyone dismissed from the real estate market, too. That weekend was the quietest it had been since February 2020. If you remember real estate in February 2020, it wasn’t exactly quiet then, but the intensity we’ve experienced today didn’t exist back then. I think our slight real estate reprieve beginning May 21st was fueled by the first holiday since Covid where vaccinations were out and everyone could get together. Buyers got fed up with the level of intensity in our real estate market. And with kids out of school, everyone shifted their focus in May to unplugging, getting a change of scenery, and spending money on vacations and restaurants. Now, we’ve got entertainment venues and concerts coming back, so people continue to be [slightly] distracted from real estate with these things.
Speaking from a boots-on-the-ground perspective, where we’re still seeing the crunch is on the listings side. Sellers who want to move are still hesitant to pull the trigger. The biggest reason I’m hearing right now is they don’t know where they would go next.
Hope on the Horizon
A large number of new construction homebuyers and homebuyers in larger price brackets are 2nd and 3rd time homeowners, who sell an existing home and move into new construction or a more expensive existing home. This helps loosen inventory of existing homes in the lower price brackets, and keeps our market moving. This spring, even with higher lumber prices and builders having to pace their sales, new home sales were up. Comparing pre-pandemic numbers, Redfin Senior Economist Sheharyar Bokhari said in April: “If you look at this month’s number — 863,000 at an annualized rate — that’s higher than what we were doing prior to the pandemic, [which] was something like 600,000. It’s obviously, [something] we hope to see more.”
Another thing we hope to see more is economic growth. As the economy grows, which it is expected to do this year, so will the interest rates, which can affect mortgage interest rates. Unless those rates rise sharply, this could actually be a good thing. Slightly higher rates could cool off the Buyer frenzy just enough to not make it a nightmare for those who need to move (whether it be for job transfers, elderly needs, mobility issues, etc.)
There are about a dozen other factors that I’m keeping my eye on, ranging from inflation to job wages, forbearances coming to roost and potential impacts on foreclosures. But honestly, it’s looking like all these factors combined will do more good than harm in the big picture. I think they’ll help reign in our price growth rate, but not lead to a decline in values. (Reach out to me if you want to talk about why I say this.)
What to Expect
Seeing what we’ve experienced the past year and a half, it’s VERY clear that regardless of all the numbers and stats, consumer habits are largely unpredictable and they drive the train. For example, the lumber industry reduced production in 2020 expecting Covid would lead to another Recession-like tightening in consumer spending. I don’t recall any industry ramping up as the world was locking down, expecting consumers to spend money on things they’ve always wanted. Yet, that’s what happened, and here we are.
Trying to be more conscious of this consumer habit factor, I think we’ll continue to see this lower intensity among Buyers in real estate, at least through July, until school starts again in Williamson County. It’s a pattern to see people do things they’ve always wanted to (like vacation) and feel less risky about spending money on entertainment immediately after overcoming large economic crises, like recessions, war and I guess even a worldwide pandemic.
With any of the other aforementioned factors playing into this, we could possibly see this lower intensity continue and perhaps loosen even more through fall and into 2022. HOWEVER – If you’re waiting for another recession-like crash, I wouldn’t hold my breath.
I’ve said this a gazillion times over the past year and a half (even as we were in the middle of the pandemic): I don’t expect our home values or prices to decrease for a loooooonnnng time. Like into the 2030s. And by that time, our prices will have increased so much, that any decrease won’t be below where we are today.
HOWEVER, if there were ever a relief from the insanity of the Buyers market that we’ve experienced this spring, IT IS NOW.
If you are a Buyer who also needs to sell a home, you have an amazing window of opportunity to still sell for top dollar, get in on low mortgage interest rates, and not have to promise your firstborn for your next home.
I hope my 2-cents here helps you hit the jackpot with your goals!
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!