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Rates Crushing Murfreesboro’s Blue Collar Market

Welcome to the second half of 2024. I hope this finds you well! If you’re new here welcome to the JJRE family. If you’re a longtime reader, it likely means you’ve trusted our small local brokerage with your business at some point along the way. For that, we sincerely thank you. We take pride in our company’s expert local knowledge and eagerness to serve this community. Now let’s get into this month’s local market update. June was certainly an interesting month in the Rutherford County market.

One of the most striking figures this month is the 33% drop in closed sales. In June 2024, we closed on 214 fewer homes than we did in June 2023. This is one of the largest year-over-year declines we’ve seen in a long time, signaling a substantial shift in the market. One critical factor contributing to the lower sales figures is the increase in interest rates. In May, rates jumped to around 7.25%. Rutherford County, being one of the least expensive counties in the greater Nashville area, is more sensitive to these rate increases compared to others. For example, Sumner County only saw a 3% drop in sales, Wilson 5%, Williamson 4%, and Davidson 19%. Typically our trends align closely with these counties, so this deviation is something we’re watching closely moving forward.

We saw the May rate jump impact contracts that same month in an 18% decrease. That typically translates to a similar dip in closed sales the following month, so the surprising factor here is the even sharper drop in closings. While it’s impossible to say for certain, we’re led to believe that the same rate jump that caused the May dip in contracts acted as a double-edged sword, also causing a significant number of contract fallouts before they could cross the finish line in June.

Despite a 23% drop in closed sales from May to June, there is a silver lining. In June, pending contracts in Rutherford County were up 8.99% month-over-month, and incidentally we’re feeling activity pickup here at JJRE. Year-to-date, closings are down 9.88% for Rutherford County.

We saw a 1.83% decline in median price per square foot from May, but on a positive note the median price per square foot has increased by 2.87% year-over-year. That same increase holds true year-to-date compared to 2023. This indicates that while the number of transactions has decreased, home values are holding steady or even appreciating at a normalized level. Meanwhile, JJRE listings year-to-date have continued to out perform the market, averaging $4 per square foot better and selling 32% faster.

The supply of homes saw a significant rise in May. Compared to this time last year, we have a 64% increase in home supply, and it’s up 39% from last month. Currently, we’re sitting at a 3.23-month supply of homes. We saw absorption rates increase in almost every price point this month, with the exception of the $400-450K price point. Meanwhile there was an unusual influx of nearly double the active listings in the $250-300K price point. Digging into that, we didn’t see any significant patterns developing, so that will prove interesting to watch going forward as well.

New construction plays a significant role in our current market. Of the 1,056 listings in Rutherford County, 46% are new construction. This high percentage indicates robust development activity, but also highlights the lock-in effect where homeowners with 3% to 4% mortgages are hesitant to move.

As we approach the election, historical trends show that real estate activity can slow down. People often become cautious and hesitant to make significant financial moves during election years. This factor, combined with the others mentioned, could explain some of the market dynamics we’re seeing.

These are indeed strange times for the real estate market. The combination of increased supply, fluctuating interest rates, and the impact of the upcoming election creates a complex environment for buyers and sellers. We’ll continue to monitor these trends closely. If you have any questions or need assistance with your real estate needs, please don’t hesitate to contact us.

If you are interested in staying informed about what is happening in the local Rutherford County real estate market going forward, please consider following @murfreesbororealestate on InstagramTikTok & YouTube for more on market conditions and numerous other real estate topics.

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John Jones

During his 30 years in real estate, John has helped more than 7,500 families handle their real estate needs. Nobody has sold more homes in Rutherford County than John and there is not even a close second. Before opening his own brokerage, John Jones was a perennial top producer for Coldwell Banker from 1998 to 2008, consistently ranking among the top 1% of agents in the nation. In October of 2008, John realized his vision of a small boutique real estate firm that offers the best in customer service, market knowledge, wealth building opportunities, and innovative techniques that get homes sold. Offering several revolutionary programs to his clients such as the Guaranteed Sale Program, Instant Offer, and the Fixer-Upper program, John and his team continue to perennially set production records, with 560 units sold and over $185,000,000 in volume in 2020. Those numbers again put the company's agent average at the top of both the Rutherford County and greater Nashville rankings.

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