NASHVILLE, Tenn. (WKRN) — The slow housing market this January is a complete turnaround from the frenzy of last winter. Meanwhile, one expert predicts that prices for Middle Tennessee homes will drop 4% this month alone.
By week, Ethan Flynn is a certified public accountant, but on the weekends, he deep dives into real estate as a realtor, hosting a weekly YouTube show highlighting the wild real estate market in Middle Tennessee.
This month, he predicts prices will drop 4%, pointing to inventory currently being three times what we had last year, as well as 30% less transactions this month.
“Very dramatic. If you go back and look at 2008, these kind of volatile drops really exceeds a lot of the volatility even seen during that time,” said Flynn. “I think even the ones that can afford are just being much more cautious. They are not just accepting what the list price is.”
According to Flynn, mortgage rates recently dropped below 6%, bringing some buyers back into the market, but much like last year, these next few months will be a true test for what the rest of 2023 will look like. Flynn recommends keeping a close eye on Washington.
“The bottom line is that Congress could have a huge impact on our mortgage rates with the debt ceiling increase conversation, especially if there’s a stalemate or both sides start playing games,” he said.
In December, the median home price for a single family was $470,000. Even though homebuyers today are paying less than six months ago, Flynn believes the numbers show there is still a ways to go before the Middle Tennessee market hits bottom.
“I don’t think there’s any reason for a buyer to be in a hurry right now,” said Flynn. “I think for the next year or two, we are going to see very softened price appreciation, and more likely a significant downside from here.”
Even though people are moving to Middle Tennessee from all over, the number of new builds are able to house those people and keep prices in check, according to Flynn.
“I predict that over the next two years, affordability will come back, and I think it will be in a combination of prices dropping, wages increasing, and interest rates coming to a more palatable level, wherever that is,” he said.