NASHVILLE, Tenn. (WKRN) — With anything in life, popularity comes with a price.
“If you want to be in Nashville proper there’s going to be a premium to pay for that,” said Chris Grimes, Managing Broker at RE/MAX Homes and Estates, Lipman Group. “We have almost historic shortage of supply and demand is almost at a historic high. With all the corporate re- locations, tons of people leaving California, New York, Illinois and coming to Nashville it’s great because our city benefits a lot of from that, but we just don’t have the housing supply for that.
Homes in Greater Nashville continue to sell fast and are on the market for an average of only 20 days, according to the latest RE/MAX National Housing Report.
That same data shows the median home sale price in Greater Nashville reached $339,677, the highest price recorded in the report’s history, which started in 2009.
In addition, home sales are up 10.6 percent over last year and home prices are up 9.6 percent over last year.
Jeff Checko, broker with The Ashton Group of RE/MAX Advantage says the numbers are a reflection of supply and demand in the marketplace. Low interest rates are driving activity, at the same time, people are reluctant to sell due to fears related to COVID-19.
“I think the more telling data is when you look at what happened between 2016 and 2020, you can go back just a few years and see the median price in greater Nashville in the $200,000’s like $230,000-$240,000 and to see where it is today, that’s a spike,” Checko said, “Of course, it’s going to go up but the pace at which it’s risen within the last few years is dramatic.”
That dramatic increase may be a turn off to first-time homebuyers or retirees looking to downsize. Checko wants those potential buyers not to worry.
“You know, even though prices are up, affordability is also up because it costs less to obtain a mortgage,” Checko said, “Everybody can get a mortgage under three percent right now, that is historically significant.
Checko says you have to think of it as buying a monthly payment, not house price as a whole. He says those who are taking advantage of what’s happening right now in the market will benefit greatly down the road.
“There are going to be those who took advantage of this and those that did not,” Checko said. “It’s going to be similar to those who bought Microsoft stock in the year 1990, it’s that significant. You’re going to see interest rates go up, you’re going to see affordability change and you’re going to have regrets if you don’t lock something in.”
Grimes says it is possible for this trend to continue, but it won’t last forever.
“I’m hopeful the [COVID] vaccine will help some potential home sellers feel more comfortable about people coming into their homes and them going to the process of finding their next home,” Grimes said. “I’m also hopeful more developments and subdivisions will be built out as laborers are available.”
Of course, more homes in the area will ease the dire lack of inventory and more houses will increase supply, meaning the price tag on houses will eventually dip back down.
“When it comes to making a decision to buying a home now and thinking you’re buying at the top of the market, my opinion is that well, it’s a fact all real estate appreciates on the long curve. You are going to have peaks and valleys on that curve,” Checko said.
If you are looking for a cheaper home, Grimes suggest looking in Bellevue, Spring Hill and White House.
News 2 is reporting on Nashville’s historic growth and the growing pains that come with it. Click here for more Nashville 2020 reports.