The coronavirus pandemic is creating a more balanced real estate market in Rutherford County, and is causing a decline in property values and activity, though not an extreme one, according to local home experts.
“The market has slowed, but houses are still selling,” said Juanita Thouin, a Realtor with Exit Realty Bob Lamb and Associates. “What we’re seeing now is a more balanced market with more available inventory.”
More homes have seen a price drop this year compared to last year during this period, Thouin said.
Statistics from Realtracs Multiple Listing Service show that Rutherford County homes built prior to 2019, listed for sale between Mar. 15 and Apr. 29, and closed during that same period, saw a volume drop from 64 homes in 2019 to 33 homes in 2020.
Prices have dropped too, said Thouin, but not as much as some might think.
Of homes that were listed between Mar. 15 and Apr. 22, 2019, less than 1 percent had a price drop prior to being sold. This year, during that same five-week listing period, 14 percent of homes still active or under contract have dropped in price.
Nonetheless, home prices have still risen as compared to last year’s statistics.
The average sold price of homes that listed and closed between Mar. 15 and Apr. 29, 2020, is $279,491, up from $244,460 between Mar. 15 and Apr. 29. 2019, according to information from Realtracs MLS.
“Our market is still strong,” said Kelly Gafford, an agent with Reliant Realty. “As far as home values go, they are always determined by demand. I don’t think we are going to see a decrease in our value. I think we are going to see a stabilization.
“Right now, we are still closing on people who locked in at low interest rates. Interest rates have fluctuated quite a bit this month and that is going to make a change in what happens when everything goes back to normal business.”
Broker Bill Jakes, owner of Bill Jakes Realty, says the immediate change he has seen is that people are moving faster to close deals.
“Prices in the Murfreesboro area have been very stable over the last 45 days,” Jakes said in mid-April. “This is traditionally the hottest time of year for home sales, so many people entered this lockdown with plans already in place to buy or sell real estate this spring. If anything has changed to date, it’s that people seem to be hurrying to complete their transactions as quickly as possible.”
Bigger changes are expected as lenders and appraisers become more conservative, Gafford said, and also, some people may have problems paying their mortgages or meeting the income and credit requirements to purchase a home.
But Murfreesboro has a strong economy in general and may do better than the nation overall.
“In the big picture, the United States housing market as a whole will absolutely see measurable effects of the pandemic and the safer-at-home quarantine,” Jakes said. “There are many people who are not able to pay rents or mortgages right now and it’s way too early to see if this worsens in coming months. Most banks don’t start foreclosures until the payment is 90 days behind. If too many homes go into foreclosure, then it will create a chain reaction of heavy inventory, which leads to lower values. As far as Murfreesboro goes, I think our local economy is much stronger than a majority of cities in the nation. So no matter what the end effect will be on real estate as a whole, I expect Murfreesboro to fare well overall.”
Joe DeSarla, a real estate agent with Parks Realty, said that thus far he hasn’t seen an abnormal slowdown in transactions.
“It’s still a good time for sellers since inventory levels are relatively low and a good time for buyers since interest rates are also low,” he said. “As long as our area continues to be popular and maintains or grows our current population, our real estate market should continue to be strong. If the economy is slow to recover from the pandemic, home prices may be affected, but not to a great degree. With our current population numbers, we’re at a new normal as far as property values are concerned.”
Beth Furbush, a loan officer at iServe Residential Lending, LLC, says her company has not seen the slow-down in Rutherford County that so many harder-hit areas have seen.
“Many local lenders would say that we are seeing record funding numbers so far in 2020,” she said in April. “However, the credit market has been affected as far as credit score qualifications goes and has slowed the availability for credit below a 640 credit score.”
As far as interest rates go, hovering around two or three percent, these very low rates benefit both buyers and sellers.
“When rates are lower, purchasing power is increased, so it makes it easier for a buyer to get the home they want at a lower monthly payment,” said Bryan Nale, mortgage loan executive at Iberiabank Mortgage.
“Lower rates help everyone,” he said. “Buyers, sellers, even holders of real estate fare better when mortgage rates are low. We’ve seen a rise in refinance applications as home owners are interested in taking advantage of this low-rate environment. A lot of people are shaving years and thousands of dollars in interest payments off of their mortgage. And for some households, being able to strategically skip a payment through the refinancing process is a welcome advantage. Other clients are happy to lower their monthly payment by reducing or eliminating mortgage insurance. I recommend homeowners review their current mortgage with a lender they trust and if the numbers are beneficial, lock the terms. Forecasts show rates will be low for the foreseeable future, but the reality is nobody has a crystal ball that says, ‘Today’s the day rates bottom and they’re going up from here.’”
Jakes says interest rates are already rising fairly quickly at some lending institutions, and he expects mortgage rates to continue to rise before the end of summer.
Along with a lower interest rate this spring, another advantage home buyers have today is less competition, Nale said.
“The companies like Open Door and Zillow who were buying up homes have retreated from the market until they know they’ll be able to turn around and quickly sell their investments. This reduced competition has especially given first-time home buyers a window to see more of their offers accepted,” Nale said.
Banks and appraisers are being more conservative so there is not a loss like in 2008–10, Gafford said, and there will be differences in this spring market for people to work around.
“We all have to respect each other and be patient, it is not in all of our control, but as long as we work together we can make a transaction happen and that is the importance of having good quality professional people on all sides,” she said. “A good experienced realtor and lender are important if you are going to make a deal happen versus the buyers who go out and look for themselves and don’t have an agent or not using a local lender. Having a local lender is going to make a huge impact on what you can do versus an online lender because that local lender is going to be able to be able to be right there on the sidelines making things happen day-to-day. Look for a local bank or mortgage lender.”
DeSarla said, “For those who have been adversely affected by the pandemic here locally . . . I can only imagine what they must be facing, especially if they’re a home owner and they’ve been laid off or put on leave without pay. For someone in that situation I would first point them to the Consumer Finance Protection Bureau website at consumerfinance.gov. They have information on the site about mortgage relief options due to the pandemic.”
Don’t think you are in an impossible situation, Gafford said.
“Even if you are furloughed or laid off, it is just a roadblock,” she said. “Talk to the right professional about what to do next, especially if you are a current homeowner who is looking to sell and buy again. Things like the forbearances and deferments can make a difference in your payment amounts and your debt-to-income ratio, so you really need to consult with a lender.”
___
For more information on buying or selling a home in Murfreesboro, contact Juanita Thouin at 615-896-5656, Kelly Gafford at 615-828-1645, Bill Jakes at 615-546-4600 or Joe DeSarla at 615-424-4993. For more information on mortgage lending, contact Beth Furbush at 615-330-4303 or Bryan Nale at 615-243-3976.
