NASHVILLE, Tenn. (WKRN) — According to a study from RE/MAX, Nashville is number one in the nation for home inventory growth—sales are way down too, but prices are still up. We took a look under the hood of the real estate market right now, and what we can expect in the new year.
In November 2021, there were 2,187 active units, but fast forward to November 2022 and that number jumped to 7,328—a 235% jump. That number puts Nashville above other hot metros like Raleigh, Seattle, and Salt Lake City when you’re talking active inventory.
Jeff Checko, Relocation Director with the Ashton Real Estate Group, said that the high interest rates are one big reason behind this inventory spike. “For now, we’ve got to get through this sort of pause that we had with interest rate hikes and start absorbing that inventory back into the marketplace.”
Checko believes if rates fall in the new year from where they are now in the mid-6% range to closer to 5%, the market could come alive again. “I think after the holidays we’ll see a little bump after New Years, like we always do, then a slower 45 to 60 days, and then we’ll get into the spring market. And having a little bit lower rates will be the icing on the cake with that scenario.”
Those home prices haven’t budged yet. Checko said that in the next few months, keep an eye on the big box builders because they have tremendous power. If the big guys start chopping prices, smaller sellers will follow. But for now, the median price still sits higher than a year ago at $430,000.
“I think that even though the median price has not really moved much yet, I think that’s a combination of lag and builders saying, ‘let’s not necessarily chop these prices in this rash response. Let’s hang out for a minute and see what happens’.”
We asked Checko how far he thinks home prices could fall in 2023.
“I think it’s safe to say that somewhere of a 5% to 10% drop off from where we were in June, July of 2022. I think we’ll end up in that fourth quarter, December 2021 range as far as looking at prices at that time.”