NASHVILLE, Tenn. (WKRN) — For the first time in a decade, hopeful buyers are finding less competition closer to the city than in the suburbs, according to a new Zillow analysis.
This data shows that while prices are sky high, it may be a bit easier to get a home near a skyline.
“I think that there’s an even flow of buyers that are coming into Nashville that are looking at urban core and suburbs,” Robbie Drimmer said, an affiliate broker with the Drimmer Group of Compass Real Estate.
“Demand is incredibly high still id say what were seeing is rising interest rates um are making homes more expensive than ever before,” he added.
However, there’s a difference in competition due to lack of inventory in the suburbs, and it’s making home values rise.
“The suburban market is really based on the school system and schools haven’t yet gotten out. So, inventory will start going up as kids get out of school, and they’re on vacation and those homes are easier to show,” said Drimmer.
The typical suburban home is worth $414,423, while the typical home in an urban ZIP code is worth $533,667.
Over the past year, suburban home values have grown by $102,527 compared to $95,178 for urban home values.
These numbers signal a shift in demand, with home buyers searching for more affordable options in the suburbs, especially as mortgage rates keep rising.
“On a $500,000 house this time last year at 2.6 percent you’re looking at about $2,100 a month. That home that’s gone up by 20 percent is now $600,000 and interest rates have gone from 2.6 to 6 percent so now that same house is now about $3,500 a month which is almost $1,400 dollars a month more,” Drimmer said.
Faster home value growth in the suburbs comes as remote work has changed the U.S. landscape amid the pandemic, but there are signs that demand may be shifting back in favor of urban homes.
“I think the demand is equal across the board between urban core and suburbs. I think that if it’s showing more demand in the suburbs right now, it’s because inventory is very, very, very low so there are fewer homes for the buyers who are looking.” Drimmer continued, “But as more inventory ticks up, I think that demand will level out a little bit.”