NASHVILLE, Tenn. (WKRN) — What a time to buy or sell a house in Middle Tennessee. Realtors use words like unprecedented. Right now, Nashville has the largest spike in inventory in the country.
Inventory is up a whopping 170.5% in one year, according to a new RE/MAX National Housing Report. Home sales are down 29% and median sales price is down 4.9%, but still, realtors say the housing market is strong.
“It’s really historically unprecedented what’s happening right now,” said Jeff Checko, relocation director with the Ashton Real Estate Group of RE/MAX Advantage.
Checko said the 170% spike is only part of the big picture. At the end of the day, there is still only a 45-day supply of homes. A 90 to 120-day supply is needed to be called a buyer’s market.
“Percentage-wise, big increase. It’s not like we have this huge amount. In fact, there’s inventory constraints at certain price points,” said Checko.
It’s a story of two different housing markets. Luxury homes priced at a few million are, in fact, seeing price cuts. But the entry-level and middle-class prices are still seeing intense competition and sometimes double-digit offers.
“You’ve got a logjam at entry-level and middle-income housing. They’re not going anywhere, they’re not going down at all.”
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One underlying culprit is the interest rate, making many monthly payments 40-50% more expensive than one year ago, which has buyers fighting over the fewer and fewer less expensive homes.
“When you have now the rates in the 6.25 to 6.75% range last I checked, those rates are pushing people downward.”
Checko forecasts that if interest rates drop back into the 5 percentage point range, more buyers could jump in and that could create a real housing shortage.