These Buyers and Sellers Got Results! Nashville Real Estate Report July 2013
Success not only comes from timing, but also adjusting to the ever changing market. Many of the people that I talk to on a daily basis are stuck in the market of the past. It may be last month or last year, but they are still stuck in an outdated mindset. This frame of mind is detrimental to meeting their goal to successfully buy or sell a home.
Buyers must understand the dynamics of today’s market and use it to their advantage. With prices and interest rates rising quickly, purchasing power is disappearing quicker that biscuits at the breakfast table. In the last month interest rates have climbed 1% leading to an 11% reduction in buying power. This means that you can afford 11% less home now than you could in March. Most are expecting interest rates to trend upwards. To make matters worse, the median home price in Nashville has climbed from $169,000 to $205,950 in four short months. Add both of these together and you can quickly see your dream home vanishing before your eyes.
Sellers also need to understand the market trends in order to get the best results. This is the first significant positive market trend in Nashville in more than six years and it is not guaranteed to last forever. I am not worried about the local economy and Nashville continues to attract business and individuals to relocate. However, there are other national and international events that could derail this comeback.
If you are considering making a change, Why are you still waiting?
Stop listening to the news or your friends views on the market. Find a Realtor who understands the changing market dynamics. One who has the heart of a teacher and is willing to guide you to success.
June 2013 – Nashville Real Estate Sales
Nashville Real Estate Sales are up 23.8% over June 2012. They are flat when compared to May 2013, but May was 9% higher than the previous month. Sales volume has not been consistently at these levels since 2007. There is no doubt that the market in Nashville is very active.
Several months ago, I expected that sales would eclipse 3,000 units this summer. We have hit the 3,000 sale mark twice this summer and I am expecting two more. Even with the rise in rates, I expect they will not deter buyers in the short term. The Fed recent announcements of the imminent end to the bond purchase program may cause more sales activity this year.
June 2013 – Nashville Real Estate Inventory
Another month of flat inventory levels in Nashville is a good sign. When coupled with the sales volume, this would indicate that the forces of supply and demand are in balance in our market. It seems that the inventory is moving quickly, and is being replaced with new listings each month.
Nashville is stable at 5.5 months of inventory on hand. This is the same level as last month, and another positive trend in the market. I expect the peak inventory to be in June or July 2013 and then slowly trend downward for the remainder of the year. Inventory typically peaks this time of year and slowly declines through the end of the year. Nashville appears to be trending positively in a balanced market. It is a great place to be!
June’s inventory is 12% less the same month in 2012.
June 2013 – Nashville Real Estate Average Price
Over the last few months, the change in median price has been astounding. We are at all time record levels now. This is partially due to an increase in sales of higher priced homes. The median home price is up nearly $40,000 since January 2013.
That was just a few months ago!
Prices rose another 5% in June, which makes three months of significant price increases. This upward pressure on prices cannot continue indefinitely, but I am excited to see this key indicator at the end of August. Past history tells us that home prices in Nashville tend to drop slightly in the final quarter of the year.
The average Days on Market holds steady at 73 days.
Fall/Winter 2013 - Nashville Real Estate Market
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. These areas with the most concern are the following:
- Lending: Since the Federal Reserve’s announcements last month, interest rates have risen approximately one percent. Although this seems insignificant, it equals $50,000 in additional interest over the life of a $250,000 loan. It is difficult to tell when the bond purchase program will end; we are assured it will be in the near future. This is the beginning of the end of record low interest rates. A slow rise in rates is in the best interest for the market and economy.
- Government: Our Congress has been inefficient at best lately. Investigations, Scandals, Budget Battles, and a renewed effort to eliminate homeowner tax deductions all could harm the market across the country.
- Economy: The Nashville Economy is amazing, and we continue to attract new businesses and residents daily. The National economy is my biggest concern. The American GDP has been anemic at best over the last few years. The uncertainty in the federal government and the management of programs such as the Affordable Health Care Act already appear to be dragging down our national potential.
What Would Steve Do?
If I were considering selling my home, I would make my decision quickly. This is the best market for sellers in six years and there are no guarantees that it will continue unimpeded. Take advantage of the limited inventory, high buyer demand and rising prices while you can.
If I were considering buying a home, I would be out looking at properties today. We are at the end of the best opportunity to buy in your lifetime. Interest rates are at near record lows and prices have just started to climb. Every month that you wait could cost you thousands in additional interest and price increases.
The real estate data was provided by the Greater Nashville Association of Realtors, Middle Tennessee’s largest trade association for Real Estate Professionals.
What Would Motivate You to Take Action Today?