It’s hard to believe – 2014 is almost in the rear view mirror! Nolensville continues growing at a fever pitch with town leadership estimating we’ll be closing in on 7,000 official residents after the results of the special census are released.
Nolensville real estate boomed again this year. As of this writing (December 15th), *478 homes with a Nolensville address have closed in 2014. That’s up from 433 in all of calendar year 2013 – a roughly 11% increase. *sales figures provided by RealTracs MLS
A question I’ve been asked a few times is ‘what does our local real estate market look like in 2015’? Forecasts are, of course, risky propositions. While there are factors in favor of continued strong growth (interest rates near historical lows, more affordable prices compared to other Williamson County communities), there are also unknowns in the year ahead: will the Fed hike interest rates, will job-growth taper off, will the price of homes become prohibitive?
With all these thoughts in mind, I’m making some predictions on how our Nolensville TN real estate market will fair in the year ahead…
1.) Mortgage Rates Will Go Up
Job numbers continue looking good, and the value of the U.S. dollar is on the upswing, but with oil prices dropping there is a new concern about the overall health of the economy.
Even so, chances are the Fed will begin raising interest rates in 2015. Rates have been near zero since December 2008. This means the near-historical-low mortgage rates we’ve enjoyed the past few years must soon begin heading up.
Realtor.com Chief Economist Jonathan Smoke believes mortgage rates will begin heading up by the middle of 2015. If you have an interest in buying a home, it would be prudent to get on the wagon early in 2015 while interest rates remain low.
2.) Millennials Begin Making A Greater Impact
Millennials (those young, hip kids born between 1981 and 2000) are coming into their own. The youngest of them will turn only 15 this coming year, but the older part of the crowd represents about 65% of today’s first-time homebuyers, according to Smoke.
Many Millennials are also at an age now where they’ll get hitched and start a family, but with student loan debt, short credit history, and tougher loan qualifications, Millennials are seeking the more affordable Southern and Midwestern U.S. for homes. It doesn’t hurt that Nashville has become en vogue and more and more people are relocating here for its job market, entertainment, and hip vibe.
Nolensville will remain a key consideration for people wanting to move into the Williamson County School District, while remaining within reasonable proximity to Nashville, Murfreesboro, Brentwood, and Franklin.
Smoke says more than two-thirds of household growth in the next five years is expected to come from Millennials. With much of this generation only beginning to reach home-buying age, it’s a good bet that we’ll be seeing continued growth from this demographic for years to come.
3.) Builders Continue Leading the Way
Real estate guru, Hollis Greenlaw, recently went on the record predicting that new housing starts will climb as much as 15% to 20% across the U.S. in 2015. That’s small potatoes in our fair town. Nolensville is atypical in that it’s a small community currently going through a massive new housing boom. So far in 2014, roughly 275 of the homes that have closed to date have been brand new construction. That’s 57% of ALL residential sales this year.
Let that sink in.
Almost 6 out of every 10 homes that have sold in Nolensville in 2014 are brand new construction. In 2015, we have new communities developing like Summerlyn and Sherwood Green Estates. Meanwhile, existing neighborhoods like Bent Creek, Catalina, and Benington (to name just a few) continue stretching out and adding homes.
I think Nolensville’s new home sales ratio might climb even further in 2015… possibly making up as much as 65% of all sales in the year ahead. This is an important point for existing home-owners to consider. Your biggest competitor isn’t your next-door neighbor… it’s the new build going in a few streets over. If you haven’t read it yet, click here for my blog on the top 8 things you need to know before listing your home in 2015.
4.) Credit Remains the Gatekeeper
Post-housing-crisis lending standards considerably toughened. This has shut out many young, would-be homebuyers who don’t have exceptional credit scores. While tougher standards were needed (especially considering how easy it was to get a loan in the early 2000s), a happy medium must be reached to open the door for a considerable number of people who sit on the brink of qualifying for a home loan.
Realtor.com’s Jonathan Smoke believes that as many as 500,000 to 750,000 would-be buyers across the U.S. could storm the market if lending standards relaxed somewhat.
There’s a chance the Fed could implement new housing policy initiatives in 2015 that open the door for more buyers. I believe this could be helpful for existing home sellers in Nolensville as their asking prices tend to be lower than what most new builds list for.
5.) Nolensville TN Real Estate Enjoys Another Year of Growth… But Growth Slows
Nolensville TN Real Estate year-over-year sales increased 25% from 2011 to 2012… 16% from 2012 to 2013… and 11% from 2013 to 2014. Notice a trend there?
Demand was pent up in 2012, but the market has been coming back down to Earth since then. Growth remains tremendous – but I feel we’ll continue along this path and perhaps see 2015’s numbers end in single-digit, year-over-year growth… perhaps 8% or 9%.
The job market is stabilizing, interest rates will likely rise, and I think these factors will help temper the market moving forward. I think it’s realistic we’ll see between 430 to 450 total sales in 2015… with 215 to 260 of those coming from new construction. Prices will continue appreciating, too, driven by new construction and strong-demand.
I’m a Nolensville TN resident… I’m a Nolensville TN Realtor®… and I always offer a complimentary, no commitment, no pressure Comparative Market Analysis for my neighbors. Please let me know how I may assist you in the sale or purchase of a Nolensville property.