Selling Against New Construction in Murfreesboro: What Builders Know That Sellers Should Too

There is a new Homes.com report out that we are going to discuss today. It talks about inventory in the Nashville area. We are also going to look at the $400,000 to $600,000 price range in Rutherford County, and I am going to show you exactly what is going on there. So if that interests you, stick around to the end, because that will be one of the last things we do.

I am John Turner, team leader of the Turner Victory Team at Onward Real Estate. This is the Murfreesboro Real Estate Report, which covers not only Murfreesboro but all of Rutherford County. We bring this to you every week. It helps us understand the market better, and hopefully it helps you understand the market better as well.

Let’s jump in with the Homes.com report. Home listings are rising the fastest in Seattle. But I am more concerned about our local market, and at number three on the list is the Nashville area, which includes us. They show 18.7% more homes on the market than this time last year. If you tune into this report every week, you already know that, because we keep you up to date on it.

Now let’s look at this week’s report. The Turner Victory Team Market Health Score is at 41. We still have it as balanced, but just barely. It is really leaning toward buyers. We have 1,709 homes on the market as of this morning, and months of supply is at 3.55.

If you look at Realtracs, which is the MLS, you are always going to see a difference between their months of supply and ours. They count homes that are under contract but still showing differently than we do, and some of the time frames they use are different. So don’t get confused. The main thing is, if you look at the same gauge every week, you will be able to tell what is going on with the market. The 30 year mortgage rate is 7.28%, the highest we have seen in some time.

So what happened in Rutherford County this week? There are 1,709 homes on the market. 161 new listings came on the market this week. The good news is 114 homes went under contract, and 103 closed. There were 145 that came off the market one way or another. You can still see the areas moving the fastest are below $500,000. If you are thinking about selling in the $400,000s or $500,000s, pay attention here in a few minutes. If you are looking to buy, I have some good information for you too.

On our weekly charts, the orange line is active inventory. It is at the highest point we have seen in quite some time. Back in 2023, we had less than 1,000 homes on the market, and now we have 1,709. That is almost double. Months of supply continues to sit right around three and a half. New listings continue to trail the past two years. That has been a thing all year. You would think inventory would be tightening, but it is not, and I will show you why.

Weekly pendings are some good news. We had 114 this week. The same week last year we had 96, so that is an improvement.

Y’all can tell I love my charts. I go on listing appointments and people love them too. What we are finding in this market is that people are looking for information. Nobody likes to hear vague answers. People want specific data, and we enjoy bringing that to you.

When we look at showings, houses across every price range are getting about half a showing a week. If you have been on the market for a while, you are probably not even getting that. Buyers, for the most part, you have some leverage. I have run into a couple of situations where you did not, but for the most part, you do.

We also compare showings this week to four weeks ago. Almost every price range is down. The big drop is in the $300,000s. Four weeks ago we were seeing 2.85 showings per listing per week in that range, and now we are at 1.82. Under $300,000 is still doing all right. We have a little glimmer of hope in the $500,000s. But the $300,000s are hit hard, and the $700,000s are being hit hard too.

One of the reasons is mortgage rates, so I wanted to look at the history. I am not here to say rates used to be much worse. My parents were both Realtors, so I understand. When I started in real estate in August 2000, rates were almost 8%. The 2020, 2021, and 2022 years were the anomaly. If you are expecting mortgage rates to go back to that level, I think you are going to be disappointed.

I do not believe mortgage rates are going back to 3%, and we based a lot of our home values on rates around that point. We have talked about the three legged stool of affordability: mortgage rates, wages, and home prices. We saw activity pick up earlier this year when rates hit 5.98%, and it continued while we were in the low sixes. I think we would see that again if we got back there. But buyers looking at 7.28% are looking for something that helps make homes affordable.

Builders are very reluctant to drop their prices, but they are very eager to give all sorts of other incentives. That is where we are seeing lower mortgage rates from builders. So I want to take a lesson from this.

I went into Realtracs and pulled the $400,000 to $600,000 price range. Today is October 4, so I went back to September 4. I am only looking at homes listed in that time that have gone under contract or closed. There are 50 homes. When I filter for homes listed as new or to be built, we go from 50 to 30.

So 60% of the homes in the $400,000 to $600,000 range that were listed in the past month and have gone under contract are new construction. That is what you are competing against as a seller. It does not really matter how I pull it. New construction is winning right now, because it is more affordable for buyers to get into new construction with the incentives builders are giving.

So there are two lessons. Number one, if you want to sell quickly, you have to think like a builder. How are you going to make this house more affordable for the buyer? That is what builders are thinking, and that is how they are selling these homes. If you are stuck on what your house was worth at the height of the market, or what your neighbor sold for six months ago, you may want to be a seller, but you are probably not really a seller in this market.

I am not seeing anything on the horizon that tells me there will be less downward pressure on pricing. Our inventory levels keep growing. You saw the Homes.com report and you see my chart every week. When we have more inventory and fewer buyers, there is downward pressure on prices. If I saw rates coming down, I might say affordability could get better, so maybe hold out.

I get the question a lot: should I wait until spring? But things change quickly, so take this with a grain of salt. We went from 5.98% earlier this year to well over 7% in September. A lot can change between now and spring. But the trends right now point to more downward pressure, not upward pressure.

There is a saying in this industry: you want to get out ahead of the market. If I am a seller in this market, that is what I want to do. You do not want to keep reducing your price by about the same amount the market is going down and keep chasing it down.

You are better off taking that leap now and getting ahead of the market. If the market keeps going down, it goes down. If it goes up, it goes up. It is like selling a stock. You may not time it perfectly, but you make the best decision you can with the information you have.

I try not to make a lot of predictions. The only one I can remember making on here is how many sales we would have in September. I am going to wait until next week to do the recap, because a few more sales are still coming in. But I will tell you I am very close on that number, so stick around next week to see whether I hit it.

Buyers, your opportunities are there with new construction. They are also there with motivated sellers. Some sellers were not very motivated when they first hit the market, but after several weeks or several months, they are probably more motivated.

Sellers, when we talk about making things more affordable, think about paying closing costs on behalf of the buyer. Most sellers are going to end up doing that in this market. Not every case, but most. Also think about rate buydowns. Those can help buyers more than just reducing your price. I am not a lender, but I can share enough of the concept to help you understand how it might help a buyer.

I hope this information is helpful. We bring it to you every week, and I am hearing more and more from people who watch it. I appreciate your comments. Again, I am John Turner, team leader of the Turner Victory Team at Onward Real Estate. Until next week, I hope you make it a great week.