As you can see in this picture, I’m well-versed in changing my “hats.” From a Roaring ’20s Flapper Headband to a Reporters notebook, here I am to give you the 411 on Grassland-area Real Estate predictions, news-style.
A Lot has Changed in 100 Years..
..even our language, duhhhhh. But one of the most dramatic changes we’ve seen between 1920 and 2020 could be the purchase and sale process of homes, and that holds especially true here in Williamson County, TN.
Can you imagine what someone in 1920 would think if they were to load up the DeLorean and gun it to 88mph, landing in our era? The home values alone would BLOW. THEIR. MINDS.
I think my Grandparents paid $5,000 dollars for their first home in the 1940s. That same home today could probably sell for close to $700,000.
First off, let’s make it clear that I have no crystal ball. I’m simply citing financial and economic experts here and showing data from the past, to help paint a picture for our future here in Williamson County.
So let’s start off with how we’ve already seen our market play out.
As we merge into January 2020, let’s take a look at how the past decade of Januarys have unfolded. You can see in this handy chart I made, January 2019 had the third highest amount of closings since January 2010 — and the trend seems to continue going higher.
2016 and 2017 were peak years, considerably higher. And while it’s hard to directly pinpoint the cause of success in those two Januarys, what we can see by this image is an upward incline that continues through 2019. Even when the number of closings dipped in 2018, they didn’t go back as low as they were before that spike.
These numbers are significant to consider if for no other reason than they show a growing appetite for homes in our area year-over-year. They represent homes listed on the MLS and Sold in a matter of one month.
You’ll notice there was only one additional closing in January 2019 than in January 2018. But it’s one number in the right direction. And that, to me, is worth mentioning. And I am VERY doubtful that trend is going to change.
Change is Coming
We will see quite a bit of change, though, specifically in the way people buy and sell homes. No, I’m not talking about iBuyers and all that FSBO stuff. I’m talking about the increased competition we’re already seeing in the marketplace. It’s harder than ever to be a seller, and it’s harder than ever to be a buyer.
New construction is BOOMING everywhere here in Williamson County. Just here in the Grassland area, we’ve got about 5 new neighborhoods being built (details here)– and the prices of homes have a wide range. It’s becoming harder and harder to show the value of resales to buyers when they can get a brand new home for just as much money in the exact same school zone. At the same time, an article from CNBC on January 2 reports builders are increasing production nationwide but have not fully focused on the lower end of the market. This puts the rate of new construction growth right at our price-point here in the Grassland area.
Another hurdle for sellers is a false impression of their home values, believing they’re worth more than they are. This could largely be due to Real Estate apps and websites that cook up numbers based on algorithms without ever entering a home. Furthermore, CNBC reports, “price increases are broadest on the lower end of the market, while they are softening slightly on the high end.” Translation: We’re not seeing the same rate of price increase as homes less expensive than ours.
One of the biggest changes we may notice in Real Estate this year is the emergence of spring market… in winter. What I mean by this is buyers
will be are out shopping earlier than in years past. Because home sale prices are generally so high, I predict (and I’m already seeing) buyers making more of an effort to shop NOW, while they have less competition among other buyers. There aren’t as many homes to choose from. (And if you’re considering selling your house, you should take a serious hint here.)
Generally speaking, there is a severe shortage of homes for sale. Senior Economist at Realtor.com George Ratiu says housing inventory is expected to reach record lows in 2020.
So what we, as Realtors, are seeing is buyers crawling out of the “holiday hole” a lot sooner than in years past. One of my buyer clients spent all day with me on Jan. 2 touring homes — and had one under contract by the next night! They felt a serious sense of urgency with valid reason.
There is a lot of fear among buyers that if you wait until spring market, you’ll miss out on all the inventory. And while there will always be homes popping up for sale, waiting until spring will at least put you among a larger number of buyers all fighting for the same thing.
Another hurdle for buyers is the increase in home prices. CoreLogic, a Real Estate finance firm, reports home prices are up 3.5% over the past year nationwide. They expect this trend to continue increasing — another 5% at least– in 2020.
My personal hunch is it’ll actually be a higher rate of increase here in Williamson County because of all the businesses moving in, and dozens more irons in the fire. (I detail that more in this future blog post.).
Money Plays a Role
As home prices continue to increase, so has the amount of money buyers can borrow. Lending limits for mortgages in 2020 have just been raised by the nation’s largest lenders. According to local Home Loan Specialist George Margrave, there are higher loan limits for areas that meet high-cost area designation criteria. (Ahem, Williamson County).
It’s Going to be a Good Year
Three Cheers for 2020, because this could be one heckuva year. Excuse my optimism, but I think if you’re surrounding yourself by the right advisers, you could stand to make some serious gains in the next year.
Consulting with someone who knows the ins-and-outs of your market, strategies to make you stand out as a seller or a buyer, works full-time in the Real Estate industry constantly touring and selling homes — all of these can give you a serious edge in this competitive climate.
According to the Urban Land Institute’s Real Estate Economic Forecast, “Forty-one economists and analysts at 32 leading real estate organizations see no end to the current record-setting economic and real estate expansion that started in 2010..
The main takeaway is that there will be steady real estate markets and returns through 2021.”
So there you have it — My prediction for Real Estate in 2020, as formed with the help of people much more analytical than I. Sure, the housing market is D R A M A T I C A L L Y different than it was in 1920. (And so are our hats.. and dresses. Oh, and they used to put cigarettes in their cigarette holders).
But in the 2020’s, we’ll be ROARING all the way home.
I’m a Grassland area resident… I’m a Williamson County, TN Realtor®… and I always offer a complimentary, no commitment, no pressure meeting to see what your home could sell for. I love helping my neighbors buy and sell homes!