Are You Stuck in the Past? Nashville Real Estate Market Report - August 2013
July was another great month for Real Estate in Nashville. Smart buyers and sellers have been taking advantage of the positive market dynamics. July continued to break records and we still have one more month of summer, which is the height of real estate activity in Nashville.
History teaches us that the highest average price for the year peaks at the end of the summer. If you are considering selling your home in the near future, I would highly recommend listing it today while there is so much pressure from buyers in a market with limited inventory. The biggest risk for home sellers today is the economy.
For those who are considering purchasing a home in the near future, I would also encourage you to speed up the process. This fall would be a great time to purchase a home, while the interest rates are still low. Your biggest risk is increasing interest rates. Rates have already climbed from their all time low and most experts expect rates to continue to climb.
Here are 50,000 reasons to consider buying today. If rates climb 1% on a $250,000 loan, that will cost you more than $50,000 in interest over the life of a loan.
Do you feel the motivation?
My best advice is to find a Realtor who understands your market, who has the heart of a teacher and is willing to guide you to success.
July 2013 – Nashville Real Estate Prices
The median price of Nashville homes has skyrocketed $22,750 since July 2012 and $37,000 since January 2013. The summer of 2007 was the last time the median price in Nashville was higher. With three months of consistent sales increases, I expect to see the same for August.
This time of the year is the peak for prices in Nashville and I expect them to slowly decline until the end of the year.
Days on Market decreased another 3 days in July to an average of 70 days. This counts the days from the time a home is listed until it is under contract. The average days to close in Nashville is holding steady at approximately 30 days.
July 2013 – Nashville Real Estate Inventory
Residential Inventory remains at their lowest levels since 2007. In July, the inventory slightly decreased from June and I expect it to continue this trend through the end of the year. The low inventory combined with an increase in buyer activity is causing the upward pressure on prices. However, the forces of supply and demand are balancing the market. It seems that the inventory is moving quickly, and is being replaced with new listings each month.
Based on our current sales rate, we have less than 4 months inventory of residential homes for sale in Nashville. I would not declare this a seller’s market until the inventory drops below 3 months of sales.
July 2013 – Nashville Real Estate Average Sales
July 2013 was the best month for the number of home sales since 2007. With three solid months this summer, Nashville also has not seen this market consistency in a long, long time. I expect that we will have sales above the 3,000 mark in August before we start the seasonal slowdown.
Sales Volume is up 24% year to date compared to the same time period in 2012.
Market Risks for 2013
I expect Nashville to continue this trend in August and then start the seasonal slowdown of activity. With the local economy in good condition, I do not expect any local factors that would derail our market.
On the national front, there are a few more concerns. Keep an eye on these three issues that have the highest probability of affecting our local economy and market recovery.
As I have said previously, I expect Nashville to continue this trend through August and then slow down through the end of the year. It is possible that changes at the federal level could affect the local market.
1. Expect a battle in Congress when the continuing spending resolution expires in the fall. Since we have not had a Federal Budget in years (what a shame!), this bill has been used to continue funding the Federal Government.
2. The National Economy continues to get better at a snail’s pace. Contrary to what some believe, we are far from a thriving national economy. Living on the edge means that any crisis could turn us in the wrong direction quickly.
3. Interest rate increases are stealing your purchasing power. While we are still near record interest rates, most economists are expecting rates to rise. This will be accelerated when the Federal Reserve stops the bond buying program. This program has kept rates artificially low in an attempt to prop up the economy. The Fed has already given signals that this is coming to an end soon.
Our Best Advice
If you are considering buying or selling in the near future, pick up the phone and call your Realtor today. For sellers, take advantage of the market while it is hot as we do not know how long this will last. For buyers, every month that you wait could cost you thousands in additional interest and price changes.
The real estate data was provided by the Greater Nashville Association of Realtors, Middle Tennessee’s largest trade association for Real Estate Professionals.