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Changing Comforts of Home




By Lee Rennick

After a year of living very close to home with limited socializing, the shift in how we are working and virtual schooling, the real estate market is seeing some very significant trend changes. Also, the flow of new residents into the area has not slowed because of the pandemic, decreasing the number of available homes for sale and driving up the purchase price. Each of these factors is having a significant impact on home design, home sales and home remodeling.

HOW COVID-19 HAS CHANGED BUYER NEEDS AND HOME DESIGN

Many of those looking for a home are opting to get a larger home to have room for at least one home office and a space where the kids can do online classes. Others are looking for outdoor spaces to fulfill the need to stretch out and have a safe place for a select group of friends and family who have been following similar COVID-19 preventative patterns over for some social interaction.
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“Everyone needs a home office right now, and most want a bigger lot and/or house,” said Jaclyn Williams, a top realtor with Parks Realty. “Many people don’t have to commute into the Nashville area like they did before, so they want more house and more acreage since they are at home more than ever.”

“In years past, a home office was occasionally important to some buyers,” said Bill Jakes, Broker and Owner of Bill Jakes Realty, “but many were willing to just make a corner of their house work for them. However, in this new age of Zoom and teleconferencing, I now have clients who would prefer a dedicated room for their home office. And many who have previously worked in call centers or large tech companies have learned that they will not likely return to their old office routines. It seems like the home office is something that’s here to stay as the workforce evolves in this new era.”

In recent years the open floor plan has taken over home design, but it seems to be slowing down. “We’re finding many buyers are transitioning back to less open floorplans, as many of them have been working from home for almost a year now.

They’re looking for quiet spaces where they can focus with less distractions,” added John Jones, Managing Broker/Owner John Jones Real Estate.

With so many now at home for school and work, it has become important for the kids to Zoom for classes and to do school work away from their parent’s home offices. The transition away from open floorplans will continue to impact our market, according to Jones, as many builders are changing floorplans to meet this need.

“The open plans that have been so popular in the last decade are falling short of today’s unique needs,” noted Jakes. “The idea of living spaces merging with the kitchen and dining are still desirable and are a good use of square footage, but these homes must offer adequate private spaces to remain desirable to today’s buyers.”

Another area where buyers are demanding more is outdoor living areas. “Some families have looked for bigger yards or homes in a neighborhood with other kids, or a common area with a playground or pool to keep kids occupied,” said Beth Boudreaux, a realtor with Bill Jakes Realty. “And now people are putting more effort into their outdoor living area as well…adding a covered patio, an in-ground pool and fire pit.” Jones is seeing an increase in desire for fenced properties. Tall hedges are gaining popularity. Specialty areas like putting greens and basketball courts are being seen. The desire is to personalize the space, gaining use of it all year around.

SLOWING OF HOME STARTS AND SURGE OF OUT OF STATE BUYERS

“The biggest impact of COVID-19 in our market has really been on supply,” said Jones. “We have seen a sharp increase in transplants from states like California, New York and Illinois, with buyers coming here to escape urban life and state taxation. Our already slim supply of homes has become even tighter due to that infl ux, which is magnifi ed by existing residents coming into the market due to the historic low interest rates we are also seeing right now. The past two months have seen inventory down more than 50 percent from this time last year.”

As COVID-19 raged in April and May of 2020, new listings increased and sales slowed, but by fall the backlogged inventory of homes began to plummet, continuing to drive up the sales price. Home prices were already increasing with the inflow of growth Middle Tennessee had been seeing pre-pandemic. As many who were planning to sell decided to stay in quarantine and work on what they had, and others were looking for a new or more functional home, prices have consistently been well above those of 2019.

“There has been a drastic decrease in inventory,” said Jones, “but it’s really more due to an increase in buyers, rather than sellers. New listings were down most months throughout the past year, but much of that decrease was due to less new construction in our area.”

With the supply of homes being at a record low, purchasing a “spec home” is an increasingly popular way to land a dream home. Spec homes are constructed by home builders as move-in-ready for those who do not have six to eight months to wait for a custom home build. They offer the benefits of a new build, but they are not tailored to the buyer’s unique needs. During the pandemic, a number of spec homes have been built in new developments in the community, but these too are being snapped up as soon as they are completed.

One other change that has accelerated during to the pandemic is the increasing shortage of single-level homes. As land values increase, developers are building up instead of out. Yet retiring seniors and young families both have an interest in this type of home.

“Many builders are constructing houses and townhomes with maybe one bedroom on the fi rst floor and sometimes all bedrooms on the second floor,” added Jakes. “Additionally, it’s getting harder to find newer homes with big yards. The days of the single-story Ranch home on a half-acre lot are long gone. That has more to do with population density than COVID, but it is still a factor that has added its own stresses to the buying process.”

One other change that has accelerated during to the pandemic is the increasing shortage of single-level homes. As land values increase, developers are building up instead of out. Yet retiring seniors and young families both have an interest in this type of home.

“Many builders are constructing houses and townhomes with maybe one bedroom on the fi rst floor and sometimes all bedrooms on the second floor,” added Jakes. “Additionally, it’s getting harder to find newer homes with big yards. The days of the single-story Ranch home on a half-acre lot are long gone. That has more to do with population density than COVID, but it is still a factor that has added its own stresses to the buying process.”

INCREASE IN HOME REMODELING AND BUYING TO REMODEL

Homebuyers are now buying older homes where they can get what they want and either remodel them before moving in, or making plans to remodel them slowly after moving into them.

The biggest changes are kitchens and baths. “We have…seen an increase in remodeling,” said Jones, “with many of our past clients taking advantage of the historic low mortgage interest rates to refi nance and pull funds from their existing home equity for those dream remodels in the process.”

Others are looking for vintage homes with a certain sense of character they want, or land away from the rush of the growing city. As the number of transplants to the area increases, many long-time residents are opting to move into more rural parts of the county.

“If you’re wanting a home on land or an older home in a historic district,” said Boudreaux, “you’re going to have to put some money into it…Prices have gone up so much that some people have to buy a home that needs updating to fi t their budget and plan to fix it up over the years.” 

REAL ESTATE TRENDS IN THE NEAR FUTURE

Rutherford County is seeing increased interest across all price points according to Jones. The market continues to be a strong seller’s market, with even luxury homes still being well balanced with just four and a half months of supply.

Jakes believes that some of the design changes will stick with us well into the future. The most significant change being the need for a separate home office. “The home office will not be a temporary need for many families who work in phone-based or technology jobs. Many of these types of companies will not return to the large commercial workspaces they once used.

Many are making permanent plans to convert their workforce to home-based employment.” More than anything else, Jones notes a need to act swiftly and a need for some compromise. “If you are looking to purchase in the current climate, you MUST be ready to pull the trigger with the best possible offer as soon as the right home hits the market. Many of our buyers are having success, but it’s become a battle of deep market knowledge, with most purchases happening in the first few days of a new listing coming to market, often even contracting off market altogether.” market altogether.”

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