Heading into the Nashville spring buying market, the Nashville housing market is following the strong national trends that are starting to emerge.
The inventory of homes for sale has increased on a year-over-year basis for eight months in a row.
Home price appreciation in Nashville grew 7% in 2017 – the latest year we have complete data for.
And the appreciation continued to grow in 2018 as well.
The home ownership rate has reached heights last seen in 2014, with millennials and Generation X leading the way!
Let’s dive a little deeper into some of the recent reports that have been released and what they mean for the spring buying season!
1. National Association of Realtor’s Existing Home Sales Report
Sales of existing homes were down for the third consecutive month in January.
Some of this can be explained by the natural seasonality that the real estate market experiences every year, and some can be explained even further by a lack of homes available for sale on the market.
Since 2017, the supply of homes for sale in Nashville has been far behind the actual number of homes needed.
While the feeding frenzy of 2018 has certainly tapered off, the demand for starter homes has remained high.
First-time homebuyers looking for a starter home are often competing with investors and institutional buyers to stand out, often outbidding each other.
Lawrence Yun, NAR’s Chief Economist, agrees that the market is still experiencing an inventory shortage.
“In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed.”
The median home price for Nashville-Davidson county homes sold in January was $273,700 with only 20 days on the market.
This is up 2.0% from from $269,250 in January 2018 where homes only averaged 15 days on the market.
The 2.0% growth in home prices represents the smallest year-over-year change since February 2016 but is a welcome change for buyers who had feared being priced out of the market.
Days on the Market
The median days on the market Nashville homes sold in January 2018 and January 2019 were still less than 30 days which means that homes are still selling incredibly fast in the Nashville area.
NAR’s Pending Home Sales Report
The national Pending Home Sales Index (PHSI) rose 4.6% to 103.2 in January from 98.7 in December. An index score of 100 is considered normal.
All four major regions of the country experienced gains in January, with the largest increase coming in the South.
“The PHSI is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.”
Increases in the PHSI often predict increases in the level of home sales in the coming months, which is great news for the housing market leading in to spring.
Yun had this to say, “Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”
The Nashville housing market in 2019 will offer home sellers in Nashville the opportunity to still experience a fast sell when properly priced.
If interest rates continue to stay low while wages increase, and more inventory comes to market, 2019 could be one of the best years for Nashville home sales in recent history.