Murfreesboro Housing Depreciation
Murfreesboro TN based Realtor John Jones presents info on the current depreciation the Rutherford County real estate market has experienced and how it relates to the good ole idea of "location, location, location".
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JOHN: Hey, guys. John Jones, Tuesday Morning Coffee. Thank you for tuning in. It’s the day after Memorial Day, the first official day of summer as it’s called. I want to send out a special thank you to honor the veterans that have died for this country, died for our freedoms, the very freedoms that allow me to sit here and talk to you and you watch it over the Internet. There’s a lot of places this can’t happen. And for that, I want to say thank you. I also want to thank all the people out there serving right now. Thank you for all you do for us. Y’all do an amazing job and I want to take a moment to say that.
Today, we’re going to talk about something that I get asked about every day and that is depreciation. John, how much has our home depreciated? Have we lost any value on our home? And it’s tough to give somebody a specific figure because it’s a very tough economic thing to actually figure out, to actually quantify because every home’s different. Every location is different. Conditions are different. So what I’m going to do with you today is I’m going to give you kind of what I feel my estimates are from basically taking some MLS data that I’m going to share with you.
And also, just my gut on what I’m seeing in the market. And these numbers are—definitely need to throw a disclaimer up there because I’m going to give you ranges because it’s very hard to quantify the actual loss of value with experience the last few years. But getting back to it, 2006 is really when we stopped. Our sales really as we look back on it that’s when we started a small decrease in ‘06, but really our values kept rising through ‘07. Just to give you an example, our average closed sale in Rutherford County in 2007 was 185,528. If you took every sale we had, averaged them together, 185,528.
This year, year to date, our average closed sale price is 162,577. So that’s a 12% decrease in average close price. Now that’s not exactly depreciation because that is an average; it’s an aggregate total of everything. But it at least gives us some idea, and I think it really is a pretty close percentage. If I had to give you an overall number for the depreciation we’ve had in Rutherford County, I would probably say anywhere from 10 to 12 to 13% would be the number I would say. The smaller price ranges or the lesser price ranges, obviously, they have not experienced as much loss of value as the upper price ranges.
But when you average them all out, I would say 10 to 12% is a pretty good estimate. To kind of tell you about the areas of town that have been affected the most that I can see: 2007, Area 21, which is North Murfreesboro, in the city limits the average close price—and it is our most valuable area. That’s where more expensive homes, more valuable homes are per capita in our county. The average close price in ‘07 was 243,000. That’s the average close sale prices. This year, that’s a 188. So that’s a 22% decrease in average close sales price.
Another area that was even hit worse than that as far as looking at average close sale prices was in LaVergne, the east side of LaVergne, which dropped from 136,000 in ‘07 to 106,000 close price in 2010. And that’s almost a 30% drop. But there’s one or two areas in our town like Area 22 where the average close sales price in 2007 was 152,000. The average closed sales price this year is 157. So although that doesn’t give you exactness on depreciation, it helps us have an understanding of what’s going on. If I have to throw totals to it—and this is I call it my Jones estimates—Zillow has a home site out there and they call it zestimates that tells you what the value of your home is, which very rarely is ever correct by the way.
But I’m going to give you my Jones estimates, and take it for what it’s worth. But from $100,000 to $150,000 home in Rutherford County, I would say we have depreciated from our peak pricing in ‘07 4 to 6%; 150 to 200,000 I would say is more like 6 to 8%; 200,000 to 250 8 to 11%; 250 to 300,000 10 to 12%; 300 to 400 anywhere from 10 to 14%; and 400 to half a million 12 to 15%. And that’s as high as I went. All these can change a little bit depending on condition that the home was in or the second buyer may have got it in a lot better condition that it was the first time.
A lot of it has to deal with location. Some subdivisions have felt it a lot worse than others. A lot of it has to do with how many foreclosures, how many short sales in a certain subdivision have sold. And that obviously is going to bring down value a little bit. So hopefully this helps you, gives you an understanding. I don’t think I’m far off. I think it’s a pretty good benchmark on probably if you had to try to figure up how much loss of value you’ve had. I would say it’s somewhere in those percentage points for that particular price range.
Also, I want to give a special shout out to Ms. Claire Shirley. She is a third-grader at Scales Elementary, going to be a fourth-grader next year. She won a contest to color the best picture of our building, and that’s what you see behind me. She was awarded a $100 gift certificate this morning and a very sweet young lady with a very nice family. Had three brothers and sisters or three other siblings. So she was excited. She’s going to church camp next week and she was going to take that hundred bucks and buy her some things to go to church camp. So a special congratulations out to Claire.
Anyway, if we can help you in any way with your real estate, 867-3020, or you can reach us as JohnCJones.com. Thank you.