2010 Versus 2011

     Rutherford County's home prices have gone up the past 3 months, but are down from last year.  The first graph below shows the price per square foot ranged from $79 to $84 during the first 8 months of this year. When compared to the same time last year, the high was $90 with an average of $86.  The average price per square foot for 2011 is $81.  The good news is that the trend is up.

2010 Price per Square Ft

2011 Price per Square Ft

 

    

    

     When comparing the months of inventory from Jan to Aug of 2010 to 2011, we have more good news.  While the market peaked in February with over 12 months of inventory, it has steadily declined since then.  Currently, the absorption rate is 7.4.  The second graph below illustrates the months of inventory for 2010.  During April, May and June we had a steady, or even, market-- not favorable to buyers or sellers since the absorption rate was about 6 months.  By July 2010, however, the rate steadily increased until Feb. of this year, making it a buyers' market.  The bottom line, with the price per square foot going up and the inventory going down, sellers can breath easy for the time being. 



2011 Months of Inventory

 

2010 Months of Inventory



6 Month Price Trend

Although it would be grand to declare Rutherford County, TN is headed out of the housing slump, I think that would be painting too rosy a picture of the market.  The 4  following graphs  will show that overall prices are trending up, however looking closer you'll see we have just regained ground we lost since January 2011. 

Each graph shows, consecutively,  existing home sales (no new construction figures) for $0 to 199,999; $200,000 to 300,000; $300,000 to 400,000; and $400,000 and above. The highest number of homes sold is represented in the first graph-- 80 to 112 depending on the month.  With the price per square foot averaging 75 for those sales, I would say the market for that price point is pretty steady.  I think when we see this group showing an increase over several months then we'll be on our way out of the "housing hole" we're currently in.

The last 2 graphs of high-end homes are not as consistent in pricing.  However, it's important to keep in mind that very few homes are sold in these prices on a monthly basis-- anywhere from 1 to a maximum of 6 homes.  So one good sale could skew the results. 

I think the important lessons here are, 1.) Buyers, make sure your purchase price is consistent with similar sales; and 2.) Sellers, be realistic--if homes are selling at $75 per square foot it just doesn't matter that you bought your home at $85 per square foot--if you want to sell, price it right.
   

New Construction Trends

New construction home sales in Rutherford County, TN, have decreased by 50% over the past 3 years. To those of us selling real estate in Murfreesboro, this figure is startling but not surprising.  The graph on the right shows the number of homes for sale since April 2008 (light green), homes pended (red line), and homes sold (dark green). 

If the trend of the graph is taken as a whole, then potentially we have not hit bottom yet in all three categories. November 2010 saw the lowest number of pended and closed sales (19 and 20 respectively.) Last month the pending and sales figures did increase, but only to a similar spike seen in September 2010.  And while it is good for sellers of existing homes to have fewer properties on the market, for builders,  the workers they employ, and the local economy, it would be better if more homes were under construction. 

As you might expect, prices have also fallen, but to a much lesser degree.  The highest average price per square foot was $100, which we saw in November 2008 and July 2010.  However, the low came in at $88/sq ft. just two months ago, in January 2011.  Last month it was back up to $95 per square foot, but only time will tell if that was just another spike in a downward trend, or the beginning of a long-awaited turnaround in the market.

March 2011 Trends

March 2011 did see a decline in the number of pendings when compared to the shorter month of February 2011. The chart to the right is for existing homes in Rutherford County, priced between $100,000 and $400,000.

Since pendings were up for February, it would make sense that closings would also show an increase in March, which indeed the graph displays. The good news I would take from these figures, however, is that most of those closings were the result of transactions that took 4 weeks or less.

In other words, your average short sale or HUD foreclosure that pended in February would not be reflected in the March number of closings, since they often take longer than a month to close (if they close at all.) Therefore, the rise in closings for March are more reflective of a recovering economy-- one not dependent upon short sales and foreclosures.

It is also important to keep in mind that the figures for February, March, April, and even May and June 2010, are reflecting the Federal government's tax credit that was a part of the stimulus package. One could reasonably say the chart's rise in pendings and sales during that time period is a false echo since the economy wasn't able to sustain that growth. Any current increase in sales should be more reflective of recovering economic conditions and confidence in stabilizing real estate values.

Next time we'll look at how new construction is faring this first quarter of 2011.

Real Estate Trends since 2008

Comparing the last 3 years of the real estate market in Rutherford County, TN, will reveal we're still battling a tough economy. The following graphs are from Feb. 2008 to Feb. 2011 in Rutherford County (Murfreesboro city), with prices ranging from $100,000 to $400,000.

The first graph shows the market trend for the number of months it took to sell a given listing. It's what we real estate agents call the "Absorption Rate." In other words, if I listed your house today, it would take an average of 13 months to sell. However, if your home went on the market in July of 2008, that sign in your yard would have been there only 6 months, on average. An absorption rate of 6 months is considered an even market--not a buyer's or seller's market. Obviously, a 13 month absorption rate is very much a buyer's market.

The second graph compares the number of homes on the market (light green) to the number of homes sold (dark green), again, over the past 3 years. The good news from this graph is that the total number of homes for sale has declined. That is, our inventory is down which helps to make it a more even market. However, what this doesn't show is the number of sellers who want to/need to sell their home but have given up or are in the long process of foreclosure.

The dark green, or number of homes sold, is not so encouraging. Ideally, the dark green bars would be increasing as the light green bars decline. Instead, this shows the number of homes actually sold is the lowest it's been in 3 years. I will have to say, however, that I think March's statistics will show a definite improvement. There is no doubt that we have had more activity (listings, showings and SALES) in the past few weeks than we've seen in awhile. I'm anxious to check March's trends, so be watching for the next post....

Home Values Still Slipping

Middle Tennessee has historically not had the extreme highs or lows as other real estate markets nationwide. In the past, during rough patches that affected the country as a whole, Nashville and it's surrounding counties have been able to weather the storms with barely a blip on the market radar. During the recent economic downturn, Middle Tennessee has not gone unscathed, but we are fortunate enough to not have seen a huge drop in home values.

The graphs to the right show the price per square foot of homes sold in the past six months, priced from $100,000 to $400,000. The first graph is of Nashville and its surrounding counties. The next is of Rutherford County and exclusively the city of Murfreesboro, while the bottom graph shows Williamson County. It's obvious to see the price per square foot has gone down slightly since Sept, with an increase in Dec., however the drop is not huge. On a 2500 square foot home that would equate to about $5000.

The bottom graph, of Williamson County, is the friendliest graph of all. Homes are still selling above $100/sqft and prices are holding steady. For those who are not from this area, Williamson County is where the more affluent live, including Nashville's country music stars. Overall, real estate is still a good investment in Tennessee.