The nation’s housing market is on a multiyear bull run with no end in sight. Though the Federal Reserve has increased mortgage loan interest rates, home prices have held strong. The Nashville market has been especially torrid despite successive interest rate hikes and progressively higher listing prices.
In short, the state of the local real estate union is strong. Whether you are looking to buy or sell, rest assured Nashville’s highly active market will present several opportunities.
Nashville Homes are in Demand
It was only four years ago when interest rates hovered around 3% and home prices were reasonable for the middle class. The pandemic shifted work into the house, increasing demand all the more. Some of those who work remotely chose Nashville as their new home, driving demand to new heights. Add in the fact that the city has received an influx of new residents unrelated to the pandemic and you have one of the fastest growing areas in the nation.
Fast forward to the summer of ’22 and the average interest rate for a 30-year mortgage was 5.22%, a figure that seemed high at the time considering rates were at 3% the year prior. Today’s home loan interest rates are hovering around 8% yet those rates have not hindered demand for local Nashville properties. Rather, Tennessee’s low taxes, vibrant economy and status as a hotbed for music and culture has made it one of the nation’s most coveted real estate markets.
Is Nashville Becoming a Real Estate Anomaly?
Search the web for “best places to buy a home” and you’ll find a recurring theme: Nashville is at or near the top of the lists. While other markets have experienced residential market drop-offs, Nashville has remained blazing hot. As noted by RE/MAX’s latest Housing Report, the median sale price of homes in the greater Nashville area has surpassed the $450,000 mark.
The average Nashville home listing’s length of time on the market is 31 days. However, it must be noted local homes sold about a week faster at this time in 2022.
The overarching trend is an increase in home values resulting from an influx of new residents willing to bid at or above ask price for many Nashville homes. However, the increase in length of time on the market indicates home bidders are becoming more cautious and refusing to waive buyer-friendly home inspections.
Though Nashville real estate prices have crept upward in recent years, the picture could be bleaker. Nashville’s ever-rising home inventory has partially offset the increase in real estate values. Inventory is up slightly more than 15% compared to the previous year.
The question begs: will Nashville home inventory outpace demand if interest rates continue to increase? Additional interest rate hikes have the potential to cause home prices to stagnate. However, there is also the potential for the robust local economy to continue to buoy the Nashville real estate market amidst potential rate hikes.
A Deeper Dive Into Nashville’s Housing Numbers
Continue to crunch the numbers of Nashville’s real estate market and you’ll glean some interesting insights. In particular, it is especially interesting to track the movement of home listing prices.
The number of Nashville active real estate listings in which prices decreased dropped by 5% during the previous year. The insight plucked from this statistic is that the demand for middle Tennessee homes is so strong that 95% of listings do not require a price reduction.
A Fluid Market Benefits Buyers and Sellers
The key takeaway from the local market’s real estate dynamics is that local home seekers can bid with confidence, knowing there is a high likelihood their investment will likely appreciate or at least hold its value.
Nashville’s real estate market will likely continue to hold strong through 2024 and beyond thanks to the vibrant local economy, minimal tax burden and lovely weather. Those looking for a home in central Tennessee and those considering selling can move forward with confidence knowing the local real estate market is active, liquid and ultimately mutually beneficial to home-sellers and home seekers.