NASHVILLE, Tenn. (WKRN) – A new study ranks Nashville third in the nation for bidding wars and it’s clear this competition in the housing market isn’t slowing.
The homes available are going fast, with the latest RE/MAX National Housing Report finding the average Nashville home now sells in just 10 days.
However, that doesn’t mean there’s much supply. Housing inventory is down nearly 32 percent over last year, RE/MAX says.
Due to high demand and lack of inventory, we continue to see multiple offers.
“I had 33 to 34 offers on a house in East Nashville about three months ago,” said Robbie Drimmer with Compass Real Estate.
These multiple offer situations result in interested buyers paying tens and hundreds of thousands, even a million dollars over the home’s original list price.
“It’s tough to say ‘Hey, this person closed for 50 thousand less on the same house within 60 days, but you go ahead and spend $50,000 more because there’s five other people lined up that will,”Jeff Checko said with the Ashton Real Estate Group of RE/MAX Advantage.
It’s a situation that’s prompting bidding wars and according to Redfin, they’re quite prevalent with nearly three quarters (74.6 percent) of Redfin agents facing competition in July. Just 33.3 percent were facing a bidding war a year prior. The Redfin report ranks Nashville third in the nation for bidding wars.
“We’re really not seeing any let up,” Checko said. “Our numbers are extremely strong.”
The number of homes selling for massive amounts over original list price isn’t letting up either.
Zillow found in the second quarter of 2021 five houses sold for $1 million or more over the first list price with 15 selling for $500,000 over the original list price. Zillow explained most, if not all of these homes are toward the top end of the price range.
“I humbly admit every time I think something is overpriced in this marketplace I seem to be proven incorrect,” Checko said. “You’ve got people from out of state that have cashed in on assets that are highly valued compared to our market and they seem to be a little bit more free with their spending, and they’re trying to get the asset and get into our market.”
Many real estate agents, like Drimmer, are warning against pricing your home too high.
“If you price something above market value and it sits in this market, I think it gets dangerous really quickly because to have to lower a listing in a sellers market indicates some issues with the property, and I think buyers at that point in time are going to start low balling you,” Drimmer said.
Checko says some of these high price points are pushing buyers away. He says it’s a small sign the market is starting to push back.
“You’ve got people living here already that may be trying to best gauge the best time to re-enter or enter the marketplace and they’re trying to be strategic, but they’re failing because things keep going up and the longer they wait, the more it’s costing them,” he said.
The numbers don’t lie; the median home sale price is now $390,000 in Metro Nashville, up 18.2 percent over last year, according to RE/MAX.