This is the future of the Nashville Real Estate Market
When you have a low inventory market and the buyers demand continues to increase, it can create run-away prices.
And that’s not a good thing for the long term health of the market.
When markets experience significant increases year after year, what typically follows is a correction that is even worse.
Remember 2005 and 2006? They gave us five years of a market that no one wants to revisit.
Before I get to my outlook, let’s rejoice in this months numbers!
3,474 homes sold in Greater Nashville during the month of September. That is up 0.8% over the same period last year. We are slightly down in the third quarter and up year-to-date as compared to 2015.
Denise Creswell, the President of the Nashville Association of Realtors said, “Our region’s ability to remain stable given the inventory shortage is a strong indication of the healthy market we have.”
Our current inventory of homes for sale is 11,886, which is down 9.6% over September 2015. Over the last few months we have hovered close to 10% inventory reductions when comparing year over year.
When compared to this summer, we are down about 3% in the number of homes for sale. This reduction is typical as people tend to pull homes off of the market as we move into the fall and winter.
The sales price, on the other hand, continues to rise. The average price for a single family home in Greater Nashville is $256,900 and for a condo it is $188,495. This is up 8.5% from September 2015 for single family homes and 10% for condominiums.
I’m not so sure how long we can maintain 5-10% annual appreciation. That is the sweet spot for healthy growth in Nashville. Anything more than 10% sustained and I expect that we would be setting ourselves up for a correction.
Baring any national disaster, the outlook for the rest of 2016 and 2017 remains strong. We should wind down to about 3,000 sales per month by years end. And I expect to hit 4,000 sales per month in 2017.