Mortgage Rates Hover in the mid-6% Range

In 2023 we saw a spike in interest rates upwards of 8%. This caused the market to slow down as a lot of buyers had to back out due to affordability. Even with some lending programs such as a “2–1 Buydown” where sellers could assist buyers by providing closing costs, to allow the lender to do a temporary buy down on the interest rates.

For most buyers though, this still was not quite enough to get the mortgage to a more affordable rate. When the rates came down into the 7% range, this provided a glimmer of hope for many as several analyst predict a steady decline to the low 6% range in 2024, and even into 2025.

What Stopped Buyers in 2023 From Buying?

Mortgage rates, inventory, and home prices were the top 3 reasons buyers paused their home search, and sellers pulled their listings. So what could happen if rates continue to drop during 2024?

More Buyers Coming Back to the Market

As a result of interest rates coming down, we will see more and more buyers come back as affordability increases. With more buyers, comes more demand for homes. Inventory is still low historically as new construction has not been able to keep up with the increased demand over the last few years.

Think about this. Someone who sells a home, typically is needing to buy a home. This is simply a swap, and not actually bringing new inventory to the market. The only way to increase inventory, is to build more new homes. With construction cost increases during the pandemic, construction had slowed down.

As more buyers come to the market, this will increase the demand for homes. This increased demand will help property values to remain on a steady upward appreciation, but could increase the competitive nature in the market.

A Look into Davidson County, TN Market Trend

Let’s start with the Months Supply of Inventory, which currently stands at 2.32. This metric represents the number of months it would take to sell all the existing homes on the market if no new listings were added. A lower number indicates a more competitive market, and at 2.32 months, we can confidently say that the market is quite active and moving swiftly.

Now, let’s take a closer look at the 12-Month Change in Months of Inventory, which shows a remarkable decline of -15.33%. This means that the supply of homes has decreased significantly over the past year. Such a decline points to a tightening market, where the demand for homes is outpacing the supply. For sellers, this can be great news as it indicates a potential increase in property values.

Moving on, we have the Median Days Homes are On the Market, which currently sits at 57. This metric measures the average number of days it takes for a home to sell. With a relatively low number like 57, it’s evident that homes are selling quickly in this market. Buyers should be prepared to act swiftly when they find a property they love, as it may not be on the market for long.

Next, let’s explore the List to Sold Price Percentage, which stands at an impressive 97.5%. This metric reveals the percentage of the listing price that homes are typically sold for. A high percentage like 97.5% indicates that sellers are receiving offers close to their asking price, which is excellent news for sellers looking to maximize their return on investment.

Last but certainly not least, we have the Median Sold Price, which currently stands at $475,000. This metric represents the middle price point for all homes sold in the area. A higher median sold price suggests that the market is strong and that buyers are willing to invest in higher-priced properties. For sellers, this indicates that they may be able to sell their homes at a higher price point, potentially maximizing their profits.

To summarize, we’ve discovered some fascinating correlations between these real estate metrics. The low Months Supply of Inventory coupled with the significant decrease in the 12-Month Change in Months of Inventory point to a competitive and tightening market. The relatively short Median Days Homes are On the Market suggests that homes are selling quickly. The high List to Sold Price Percentage indicates that sellers are receiving offers close to their asking price. Finally, the higher Median Sold Price showcases a strong market where buyers are willing to invest in higher-priced properties.

For both buyers and sellers, these metrics provide valuable insights into the current state of the real estate market. Buyers should be prepared to act swiftly and potentially make strong offers, while sellers can take advantage of the high demand and potentially achieve a favorable selling price.

Is Now a Good Time to Buy or Sell?

Buyers wants to find a good deal, and Sellers want to get top dollar.

When considering whether it’s a good time to buy a property, there are several factors to take into account. Here are some key considerations:

1. Market Conditions: Assess the current real estate market in your area. Is it a buyer’s market or a seller’s market? In a buyer’s market, there may be more properties available, and prices might be more negotiable.
2. Interest Rates: Check the prevailing interest rates. Lower interest rates can make homeownership more affordable as they affect your mortgage payments. Keep an eye on trends in interest rates.
3. Financial Stability: Evaluate your own financial situation. Consider your job stability, income, and overall financial health. Make sure you are in a position to take on the financial responsibilities of homeownership.
4. Long-Term Plans: Think about your long-term plans. Buying a home is a significant investment, and it’s important to consider how well a property aligns with your future goals and plans.
5. Local Economic Factors: Consider the economic health of the local area. Employment opportunities, economic growth, and development can influence property values.
6. Inventory Levels: Look at the inventory of available homes. If there’s a limited supply of homes in your desired area, it may impact pricing and competition among buyers.
7. Home Prices: Analyze home prices in the area you’re interested in. Compare current prices to historical trends to get an idea of whether prices are stable, rising, or declining.
8. Negotiation Power: Assess your negotiation power. Depending on market conditions, you may have more or less bargaining power when it comes to price negotiations.
9. Hidden Costs: Consider additional costs associated with homeownership, such as property taxes, maintenance, and homeowners’ association fees.
10. Real Estate Professional Advice: Consult with a real estate professional, like yourself, to get insights into the local market and personalized advice based on your specific situation.
11. Mortgage Professional Advice: It’s important to consult with a mortgage professional to discuss what you could be approved for, as well as various programs available to help with down payment assistance, mortgage rate buy downs, and help determine what rate you could be approved for. Having a good lender on your side is key to success when considering buying a home.

Remember that the decision to buy a home is a personal one, and what might be a good time for one person may not be the same for another. It’s essential to weigh these factors and make a decision that aligns with your individual circumstances and goals.

Is Now a Good Time To Sell?

For sellers, there are simliar factors to keep in mind, that buyers should keep in mind as well, when considering to Sell your home.

1. Market Conditions: Evaluate the current market conditions in your area. Is it a seller’s market or a buyer’s market? In a seller’s market, there may be more demand than supply, potentially leading to higher property prices.
2. Home Value: Assess the current value of your property. Consider recent comparable sales in your neighborhood to determine a competitive and realistic listing price.
3. Local Housing Trends: Stay informed about local housing trends. Understand how property values have been changing over time and whether there are any noticeable trends in your area.
4. Economic Factors: Consider the economic factors affecting the local market. Economic growth, job opportunities, and overall economic stability can impact the demand for homes.
5. Interest Rates: Monitor interest rates. Low interest rates can attract more buyers, increasing demand for properties.
6. Seasonal Trends: Be aware of seasonal trends in the real estate market. In some areas, certain seasons may be more favorable for selling due to weather conditions or other factors.
7. Property Condition: Ensure that your property is in good condition. Well-maintained homes often attract more buyers and can command higher prices.
8. Marketing Strategy: Develop a solid marketing strategy. Utilize online and offline channels to promote your property effectively. Professional photographs, virtual tours, and staging can enhance your marketing efforts.
9. Negotiation Power: Understand your negotiation power. Depending on market conditions, sellers may have more or less bargaining power. Be prepared for negotiations and consider setting a competitive asking price.
10. Timing with Personal Goals: Consider your personal goals and timeline. If selling aligns with your long-term plans and financial objectives, it may be a good time for you to sell.
11. Legal and Regulatory Changes: Stay informed about any recent legal or regulatory changes that may impact the real estate market. This includes changes in property taxes, zoning regulations, or any other relevant policies.
12. Consult with Professionals: As a realtor, consulting with other real estate professionals, such as appraisers and mortgage brokers, can provide additional insights into market conditions and trends.

Ultimately, the decision to sell a property should align with your individual circumstances and goals. Keeping a close eye on market conditions and seeking professional advice can help you make an informed decision about the timing of your sale.

Is NOW a good time for YOU to BUY or SELL?

This is totally up to you, but to best prepare yourself, let’s help you get all the intel you need to help make an educated decision.