Amazing! Nashville Home Sales Skyrocket - April 2013 Market Report
This is one of those rare times in any real estate market that it is a great time to both buy and sell in Nashville. This is not real estate cliché. For sellers, low inventory and an increase in buyer activity is driving prices up and days on market down. For buyers, interest rates are still at historic lows. Even though prices are starting to rise, we are still well below the high water mark for prices in most areas.
March 2013 – Nashville Real Estate Sales
Sales for March 2013 were 31% higher than the same month in 2012 and 44% higher that February 2013. This is amazing!
Last month, I said that Nashville Real Estate sales could peak this year at 3,000 units in the summer and wind up the year at 2,500 sales per month. I have no doubt we will surpass the 3,000 sales per month mark. The last time Nashville experienced more than 3,000 sales in one month was August 2007. The last time Nashville reached 2,500 sales in one month was July 2012. We have already hit the peak of 2012.
March 2013 – Nashville Real Estate Inventory
Inventory in the Nashville Real Estate Market is slowly trending upwards; however, it is far below the levels we experienced the last five years. We have a six month supply of homes at the current sales rate vs eight months in February 2013. As the supply of homes decreases through the summer, this will fuel price appreciation.
March’s inventory has decreased 18% since the same month in 2012. We need more homes on the market to keep pace with the current demand. New construction cannot fill the gap and is likely a few years away from making a significant impact.
March 2013 – Nashville Real Estate Average Price
2013 is the Year of Price Appreciation in Nashville. It is not yet evident on the chart, but all the dominoes appear to be lining up. I am not expecting double digit increases. After several years of decline, it is easy to get excited about a modest increase in price.
The median price for single family homes in March 2013 was slightly higher than March 2012. The average Days on Market has decreased three days in the last month to 81 days.
Currently, Nashville is mostly sunshine and blue sky. For those of you who are interested, I would recommend that you are on the lookout for changes in the following areas. These factors have the potential to significantly impact the Nashville Real Estate Market and the local economic recovery.
- Inventory: We are looking at the smallest inventory of homes in Nashville in seven years. Prices can only go up as the inventory decreases throughout the summer. It is not likely, but a strong decrease in buyer activity is the only factor that could change the inventory in 2013.
- Lending: Although the Federal Reserve has been recently discussing ending the stimulus sooner, interest rates are expected to stay low well into 2014. The biggest news concerns the significant cost increases with FHA loans. Insurance costs are rising and some buyers will be required to pay PMI for the life of the loan. This could affect areas that are popular with first time homebuyers.
- Government Spending and Debt: Expect at least two more political showdowns this year with an economic spin: the 2013 budget and the debt ceiling. We will need courageous leadership in Congress to avoid continued negative effects on the economy.
- National Economy: The revised GDP for the 4th quarter of 2012 was barely positive. Many experts predict a similar result for 2013 Q1. It will be difficult to have a thriving, national real estate market with a sluggish economy. The implementation of the Affordable Health Care Act is speeding up to meet the 2014 deadline. It will be interesting to see how this law will impact the jobs and the economy.
The real estate data was provided by the Greater Nashville Association of Realtors, Middle Tennessee’s largest trade association for Real Estate Professionals.
What is Your Biggest Question or Concern for the Nashville Real Estate Market in 2013?