NASHVILLE, Tenn. (WKRN) — The monthly checkup on Nashville’s housing market is out. Closings have dropped since last year, and in some cases, prices have dropped too. But, that depends on what you’re buying.
The housing frenzy of the pandemic is in the rearview mirror.
“2021, 2022 were, in many ways, an unhealthy and definitely an unsustainable market,” said Kevin Wilson.
Wilson is president-elect with Greater Nashville REALTORS. His team’s research shows that sales are down 13%.
Take single-family homes. Last May, the median price was $497,785, but this May, it’s lower at $479,900. But that’s year over year. Month over month tells a different story, where sales are up.
“If you look month over month, it’s an increase of 24%, which tells me that we are in the beginning phases of a strong and robust spring and summer market,” said Wilson. “That tells me that we are probably even in a healthier market than we were this time last year.”
But, higher interest rates are pushing many buyers to go smaller and less pricey, purchasing condos instead of single-family homes. And that demand has median condo prices up from $340,506 last May to $349,900 this year.
“Buyers still see the value in home ownership. And so they are finding a path. And right now, that path is to move toward a condo. They can stay in that home for a few years, build the equity, and then move into the single-family home with their family.”
Wilson predicts that once interest rates drop, the homebuyer rush will skyrocket again. “Once we get into something below a 5% interest rate again, we’re going to get back into an environment that looks a lot like 2021 and 2022—and that could happen in the next 12 months.”
Right now, Davidson County has 3.5 months of inventory—up 60% since last year.