As I sit here and type this, we’ve officially passed 300 days since stay-home orders began for Millions of Americans on March 16, 2020. My family has home-schooled, we’ve remote schooled and now we’re jumping back in to a traditional school setting (if these snow days ever pass).
I know so many families are tired and, quite frankly, some of us may not complain if we get a little bit of
boredom normalcy in 2021. But this year is already shaping up to be just as momentous – and when it comes to Real Estate, there are quite a few factors that will keep us on our toes.
Our Property Values Then & Now
Let’s start first by looking at how far we’ve come this past year here in Grassland. Perspective is everything, and when putting our numbers side by side, it’s very apparent that 2020 wasn’t all bad for us.
A lot of the negative Real Estate dialogue among Buyers these days centers around the strain on inventory – There are so many more Buyers than homes For Sale, and it’s proving to be frustrating for anyone who is not a cash Buyer or who has any other sort of contingency (which is almost everyone). Personally, almost all of the Buyers I’ve represented this year have gotten their dream homes in off-market deals that I pieced together. So it helps to have someone who does this full-time in your corner as well.
The number of homes on the market is the lowest it’s been nationwide since 1982. Even considering all of this, the number of Grassland homes sold on MLS during December 2019 versus December 2020 increased by almost a third (32%) year-over-year! And check out our median home price between the two months as well; We saw a $185,250 jump in our median home prices between the two Decembers. Insane.
- 30 homes sold
- $537,250 median home price
- 6 median DOM
- 99.77% sales to list price ratio
- 44 homes sold (+32%)
- $722,500 median home price (+26%)
- 6 median DOM (same)
- 100% sales to list price ratio (This means Sellers are getting 100% of their list price)
Here’s a look at one of our Median homes sold here in Grassland during December 2020. It’s a 4,372 sf home with a basement, on a quarter-acre lot in Fieldstone Farms. This closed December 14th at $720,000 after only 5 days on market, and got $100 above asking price.
In greater Williamson County, homes sold at increase of $63,000 in median price, comparing December 2020 to December 2019. The median Williamson County home price for December 2020 is $595,000.
Comparing all of 2019 to all of 2020, how did we perform here in Grassland?
All of 2019:
- 459 Grassland homes sold
- $570,000 median sales price
- 12 median DOM
- 99.09% sales price to list price ratio
All of 2020:
- 453 Grassland homes sold (-6)
- $635,000 median sales price (+$65,000)
- 9 median DOM (-3)
- 100% sales price to list price ratio (Again, This means Sellers are getting 100% of their list price)
Overall, year-to-year, our median sales prices increased 11%! This double-digit increase is on par with a lot of other suburban areas across the country and is above the national average increase.
And Williamson County as a whole saw 11% increases in our average sales prices year-to-year!
Property Data Leader, CoreLogic, reports home prices grew nationwide by 8.2% year over year (from November 2019 to November 2020).
So What’s the Downside?
It’s no secret this rate of increase in our home prices won’t last forever. But for 2021, many economists are forecasting a leveling-off in a lot of markets nationwide. Personally, for Grassland, I think we’ll see more of a 3% to 5% increase in our property values by the end of 2021. So at this point, I don’t see a decrease in our values on the horizon.
There are, however, some major factors we’re watching in the Real Estate industry right now, which could dampen our price growth rate:
- Mortgage Rates are expected to go up. In an official forecast by the National Association of Realtors, more than a dozen economists are predicting we could break above 3% in mortgage rates by the end of 2021 (likely by mid-2021), possibly seeing as high as 3.25% by December. While that’s still low, it could mean the difference of a few hundred dollars a month in a mortgage payment, therefore decreasing buying power for some.
- Inflation could cause a pinch in Buyers’ budgets. Paying higher prices for goods and services (like we’re already seeing with groceries) will take away from the amount of money people can pay toward fixed monthly expenses (like a mortgage payment).
- Job Losses have caused so many Americans economic hardship. Mortgage forbearances may come to roost, tenants are falling behind in rent payments and we’re expecting an increase in foreclosures in 2021, albeit slight.
- New Construction will become available more than it was in 2020. This will entice those with higher buying power to build new homes, and their current homes will be re-sold. These two factors will increase inventory of more affordable homes in our market.
All these points indicate a potential decrease in the amount of Buyers in the marketplace. At the same time, we could see more inventory with the new construction. Any time you see a leveling out of supply versus demand, you’ll also notice a leveling out of price growth.
My 2021 Predictions
This year will present just as much opportunity for Sellers as in 2020. But I believe the most opportunity to buy and sell a home in 2021 will be the beginning half of this year due to the factors above.
I highly doubt we will see a “wave of foreclosures” in 2021 as some economists are predicting, especially in our little pocket of Williamson County, and that is largely because of the increased home equity I spoke about earlier with our increase in home prices.
For example, only 3% of homes in the US that still owe money on a mortgage are underwater, according to CoreLogic — they owe more on their homes than what they’re worth. This is one of the biggest differences between the economic crash of 2008 and what we’re experiencing now. So 97% of homeowners with mortgages could easily list and sell their homes, and make a profit, if they’re struggling financially. (This is an all-time record, by the way.) So a potential foreclosure wave is highly unlikely.
Regardless of new construction and a potential for less affordability among Buyers, I predict we will still see more Buyers than Sellers in our Grassland market in 2021. We will continue to see Buyers coming from New York, Chicago and California to escape high taxation and a different quality of life since many are no longer tied to office spaces. I predict we will have a lower number of Buyers fueling the frenzy, but we will still feel the squeeze of a low inventory market.
I also predict that in 10 years, we’ll be able to tell who took advantage of this time. Even with an expected increase in mortgage rates and home prices, Buyers and Sellers have so much power to put themselves in a better position financially via Real Estate. It will be clear who made their move.
Feel free to reach out to me for honest advice on the Real Estate market. I’m a Grassland area resident and I’m a Platinum Award-winning Williamson County REALTOR® ranking in the top 2%. I 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!