Live from Facebook…it’s Tuesday Morning Coffee!
Thanks to everyone who joined our very first Facebook Live stream this morning. I had a blast, and I hope you did too!
We just finished up a very successful year at John Jones Real Estate and are looking forward to another great year for the local market. Which brings me to our topic for today: “A Recap of the 2015 Rutherford County market and What To Expect in 2016.”
Last year was a great year for me both personally and professionally. For single-family residential sales, the market continued it’s growth as we saw interest rates fall to the lowest they’ve been in over a decade. Closed sales were up 10% from the previous year (2014) however total listings were down 21%, which is the lowest we’ve seen in quite some time. This is due mostly to the fact that construction came to a halt after the market crash in ’08 and because of that, inventory is down while builders attempt to play catch-up to the population growth that continued in this area during that time. We saw median days on the market decrease from 54 days in 2014 to 44 total days on the market in 2015. Homes were selling faster and at nearly an 11% higher price at $190K (from $170K) year-over-year. Median square footage for single-family homes in Rutherford County came in at 1978 sq. ft and averaged a little bit over $96 per foot, which is up 6% from 2014.
A lot of people have inquired about the value of their home and the appreciation rates as they pertain to the growth in our local market. Sometimes this is a tricky question, because experts tend to base home value on varying factors. I always look at median cost per square foot because I believe it paints the truest picture of home value. To understand the current appreciation rate in our area, I believe we must touch on exactly what happened in previous years to understand the type of growth we are experiencing today.
From 2000-2007 we had what I call the “thunder-clap” market, all of these factors were in play at once: baby boomers were at their peak buying potential, lending practices were completely unregulated and for the first time, Wall Street got involved in the mortgage game (if you haven’t seen the movie The Big Short based on the book by Michael Lewis, get to the theater. I promise, you won’t be disappointed.) All of these factors came to together to create the perfect storm which ultimately led to what I like to call “The Lost Years.” Between the years of 2008-2012, millions of people lost their jobs and their homes, and builders, developers and real estate agents - including yours truly - lost their ass…ets. I consider November 2011 to be the point our market bottomed out here in Rutherford County as far as home sales, home value and overall volatility of our local market. We finally started to see pick-up during 2012 and our market has continued to steadily improve. Prices are up 21% from that low point in Nov. 2011 and up 6% from last year as I mentioned previously. Now does that mean every home’s value has increased 6%? No. That is merely the median value increase based on that current median value of $190K. For a $250-$300K property, your home might have only appreciated between 4-5%. The value of your home is going to also be determined by the strength of our market in regards to the price point of your property. Be sure to give us a call if you have more questions regarding the resale value of your current home.
The biggest change we saw in 2015 was the growth in condo/townhome sales. In 2006, we had the most number of condo sales in the history of our market…until last year, where we were up 6% from 2006. The reason for that is because condos and townhomes have become new starter homes for first-time home buyers.
So this brings me to the topic of trends and expectations for real estate in Rutherford County in the coming year. Based on what I’m seeing from last year and experts in this industry, the next few years should be vibrant barring some unforeseen shakeup that is out of the market’s control. Millennials (<34 yrs) will continue to be the largest generation group of home buyers followed by financially recovering Gen Xers and older baby boomers who are downsizing. Interest rates will ease up but should remain manageable. Across the nation, rental rates are predicted to rise faster than home prices due to the expected demand. Overall, I expect 2016 to be another banner year in real estate sales and I am looking forward to the continued growth of our community in this optimistically stealth market.
Read up on the National Housing Market Forecast for 2016-2017 here.
Be sure to tune back in next Tuesday at 10am for another Tuesday Morning Coffee LIVE on Facebook.