RED REPORT – July 2019
Middle TN Home/Condo Sales Report July 2019 Issue.
*BONUS
New Construction VS Total Market (Home Sales)
Our office had several discussions the last several weeks about new construction vs the total market.
Here’s some of the data we pulled- some surprised us and some didn’t, but it was all interesting/helpful as we look ahead.
2006:
In Rutherford County new construction was 45% of the total market.
In Davidson County new construction was 25% of the total market.
In Williamson County new construction was 46% of the total market.
Last 12 months:
In Rutherford County new construction was 32% of the total market. (13% lower than 2006)
In Davidson County new construction was 23% of the total market. (2% lower than 2006)
In Williamson County new construction was 31% of the total market. (15% lower than 2006)
Take aways:
– For Rutherford County, the current average sales price is about $285,000. We also know that there are very few single family homes under $300,000; so for the most part, half of our market doesn’t even have the option of a new single family home.
So a few things have happened in Rutherford:
- The new construction sector shrank 13% because we can’t supply singles family homes in the price range that is more than half our market. When you look the majority of the single family new construction($300-450,000), it is even less than the 32%(all new construction). It’s less than 15% of the total market.
- Townhomes have picked up the slack and become a desirable purchase for the entry level or first time home buyer, that was a difficult sale ten years ago.
- Apartments have exploded/built everywhere to accommodate those that can’t afford the higher price levels. Single Family rentals have increased as well.
– For Davidson County, the downtown condos have been developed in huge numbers to minimize the decrease of new construction as a percentage of their total market. Without the downtown condos, they would be in the same shape Rutherford and Williams are with new homes as a lower percentage of the total market.
– For Williamson County, I would assume they are similar to Rutherford for the reasons their new construction percentage has dropped, but just double the numbers. They can’t provide new homes in the lower price ranges and they have also depended on townhomes to serve the lower price ranges.
In conclusion:
I was surprised that the largest sector of Rutherford’s new home market is actually only 15% of the total market and all new home sales are only 32%. From all the activity, I just assumed new construction would be closer to the 50% mark that we were accustomed to in the pre-recession market. So some may say this is the new norm and some may say that we have plenty of room for growth in the new construction arena.
I hope you enjoyed the extra bonus information this month. We’ll see you next month….
Thank you,
Steven
Steven Dotson
President
Red Realty
1574 Medical Center Pkwy
Suite 202
Murfreesboro, TN 37129
Direct: 615-896-1400
Office: 615-896-2733
www.RedRealty.com
Reminder:
The monthly report is just a simple comparison of the most recent completed month to the same month last year.
The quarterly reports will be a more detailed report looking at year to date, same period year to year and quarter to quarter comparisons.
We are also including all single family and condo sales in all our reports going forward. The quarterly reports tell a better story of the big picture of what’s really going on in the market. The monthly look if just snapshot of a small window.
The monthly and quarterly Red reports include Davidsons, Rutherford, Williamson and Wilson Counties.
