Gloom and doom.
That is the common perception of the real estate market across the country. Their perspective colored by extremely bad markets in California, Michigan, Florida, Arizona, and Nevada, the national media has relentlessly led all of us to believe that pretty soon our homes will be worth nothing and everyone will be in foreclosure.
The truth of the matter is that Tennessee in general, and Middle Tennessee in particular, are currently experiencing solid real estate markets. The problem is that we are comparing the good market of today with the record-setting, best-ever, always-rising market of the past few years.
It is kind of like comparing Vince Young with Peyton Manning. Vince is pretty good and probably going to get better. He led the Titans to the playoffs. But when you compare him to Peyton, there is no comparison. Almost any football fan would rather have Peyton Manning leading their team over Vince Young–hands down. But if you look at Vince without considering Peyton, he looks pretty good.
That’s where we’re at now in Rutherford County real estate. Good but not outstanding.
Our county has been down in closed sales about 30% all year. In our opinion, there are three big factors that have played a role in the decline. First, when the sub-prime mortgage crisis began to unfold, sub prime loans were basically taken off the table. That immediately eliminated about 20% of potential buyers from qualifying for a loan. Before the housing boom began in the mid-2000s, this first 20% wasn’t even a part of the market. The other 10-15% is a combination of lenders over-tightening their mortgage qualifications and potential borrowers opting out of the market while waiting to see how everything shakes out.
We think the Rutherford County real estate market has reached the bottom. At least one financial analyst agrees with us. Our available inventory peaked at 10.5 months in January and has been in slow, but steady, decline since, dropping to 8.23 months by the end of May. Our market remains one of the most affordable in the nation, aided by new FHA guidelines that make mortgage money accessible to more potential buyers and still-historically low interest rates.
Being at the bottom does not mean that prices will start shooting up any time soon. They may even dip some more as inventory is sold off. But thankfully the worst is behind us.
In our current market, the opportunities for buyers remain outstanding. In the stock market, you make money buying low and selling high. This market is the perfect storm of high inventory, low prices, motivated sellers, and great interest rates and mortgage terms. If you need a house, now is the time to buy. If you’ve been thinking of owning rental property, now is the time to buy. If you’ve always wanted to get in on the ground floor of a great investment, residential property in Rutherford County is the place to put your money right now. Currently, our team members and our clients are aggressively acquiring real estate in our own portfolios. We can’t say it any stronger than that. When rates start going up again (The FED held them steady last meeting, but that won’t last for long!), this window of opportunity will close quickly. If you want to get started investing or buy a home to live in, please give us a call (615-867-3020) or visit our website.
If you need to sell and buy, try to look at the whole buy-sell picture instead of viewing it as two separate transactions. If giving a buyer a good deal on your sale frees you up to get a great deal on your purchase, you are better off in the end. Not to mention living in the house you want instead of waiting out the market in an unsatisfactory home. If you’d like us to provide you some expert analysis of your current situation, please give us a call (615-867-3020) or visit our website.
