More homes than ever sold in Franklin in 2015 (2,230)
Remember the crazy housing bubble and the bust? Well, in Franklin, TN, you’ve surged well past simply “recovery.” With more than a 14% price increase *above* the highs of 2007 - including $86,474 in just the last three years - and having just sold more homes than ever in 2015, it really is a new world for our little ‘ol Main Street USA.
New Times, New Changes
81% of the already closed homes in 2015 were existing properties; so many of the gains went to folks who had invested in Franklin (+8.29% from 2014). As we start into 2016, 62% of the homes currently under contract are brand new homes. What does that tell you? Even though existing home demand was twice as strong as new home demand in 2015, there are just not enough homes to choose from, so many of us are choosing to build new.
We are also growing, so whether homebuyers are entering our market for the first time from out-of-state or the ever popular migration from Davidson County, we are currently shifting towards new home options here in Franklin, TN. However, new home inventory is now near four months of available homes (versus just 1.6 months for existing homes). What does that mean?
Keep in mind, balanced housing demand is considered 4–6 months of available homes. More months of available homes means prices decline (8m-12m+), less means prices increase (national builders typically target less than 90 days of inventory).
With Franklin currently showing 3.98 months of available NEW homes, new construction homes have slightly cooled their price premiums to stay in line with existing home prices. Over the full year, the median NEW home price was $34,490 higher than the rest, but the 90 days trend is only $17,013 higher today (for a home that has shrunk by roughly 100 square feet). As you would expect, builders are keeping JUST ahead of the curve. You want to do the same. Compare your different choices closely: Existing vs. New, New vs. New, and Location vs. Location. Also, choose your lot carefully, it matters not only for your real life enjoyment, but also for your resale down the road.
BE READY. Beforehand.
For those looking to stay in the tried-and-true neighborhoods that we all love, you’ll want to be READY to see them as soon as they hit the market, if not BEFORE they come on the market. Have your homework done ahead of time. And please keep TWO old investment mantras in mind:
1) “You MAKE money when you BUY, not when you sell.”
2) There will ALWAYS be another house.
Can it change? Will the bubble burst again?
Not likely in 2016. This is not a bubble.
Look at the percentage-of-homes-sold in 2006 and 2007. BEFORE prices fell. What changed? The number of homes sold dropped dramatically. Prices barely shivered down $2,500. Compare that to our last six years. 2014 could have been a concern, but continued appreciation in value and 2015 numbers all proved that inventory levels (and our builders) just couldn’t keep up with demand the previous year. 339 homes currently under contract now, plus nearly two months worth of sales, speaks to that point right now. We only have 2.2 months of available homes right in Franklin, TN today.
And never underestimate the importance of our economic development. Nissan’s past move, the near one million square feet of A+ office space coming up at Franklin Park in Cool Springs, the growth surrounding the entire South Carothers corridor. Pending developments like Ovation creating a new ‘downtown’ off of McEwen or Harpeth Square potentially changing the magnitude of our Historic Downtown Franklin.
Let’s chat specifics when you are ready. Obviously the details and the data are critical, because these are significant times in Franklin. We are just so lucky to be here. Take advantage of that good fortune.
Please feel free to reach out by TEXT or e-mail, if you want to discuss your specific area of interest or your current neighborhood. I’d be happy to send you the Market Update report above, customized for your specific criteria. It’s been a great visual for my homeowner and homebuyer clients who want to bring the data into perspective quickly.
Any follow up questions or additional data points that you would like to chat about?