This week I have a look at February’s pricing for you:
Let’s start with price. Average sales price in Rutherford County last month (February 2024) was $468,292. February of 2023 was $399,569. We had a little trough that bottomed out in October 2023 with a lower average at $462,978. Still much higher than February 2023. So if you have been waiting for the past year for prices to come down, you missed it. Prices have not responded to interest rates the way you might think they would. And once rates drop, prices will shoot up again. The cost of waiting is very high right now.
Why is that? Let’s go back to basic economics. If the supply of something drops, the price goes up. If demand goes way up, price does too. Our current situation sees demand for homes drop somewhat but the supply has dropped significantly. Put it this way, new construction UNITS are about the same as they have been. There is not significantly more new homes being built. BUT as a percentage of total available, new construction is WAY up, over half the available market. First time I’ve ever seen new construction cross even 40% of available units. Typically, new homes make up about 25-30% of available homes. So if the actual unit count is not way up but the percentage of the market is, this only means that available existing homes is WAY WAY down. So supply is lagging way behind demand, even with demand down. Because supply is SO constricted, price goes up, even with less demand.
So why is supply so tight? Easy, people are sitting on their homes. They have sub 4% interest rates, maybe even sub 2%. They have significant equity and they do not feel like they can improve their position with a home purchase. If they can’t improve, why sell? Its sound logic. But it also greatly impacts the overall market. Many of the people thinking this way actually do want to move for one reason or another. But they don’t. Some don’t because it truly is not practical. Some don’t because they think the market conditions will improve in their favor. Some don’t because they have analysis paralysis. Too many moving parts so they just sit still.
What’s the answer? Well, there isn’t one. You still have to make the best choice you can for your situation. And only you can make that decision. BUT I would implore you to get some assistance with the information. If you want to move but have one fear or another, let’s talk. I will give you the information you need to make an informed decision. I promise NOT to push you one way or another. But to give you the info you need and insight you want to make a plan, not just wait. Perhaps that plan is to wait. Perhaps it is to make a move now. Perhaps it is to not make a move at all. I am good with all these decisions. Just do them with knowledge instead of fear.
Other fun stats for the last year:
High point of inventory–June 2023 with 903 available, low point–February 2023 with 750
Current Avg Days on Market–28
Current Sales price/List price ratio–99.2%–but incentives are very much in play.
Month’s supply at current activity–Now–2.4 months, February 2023– 0.87 months
