It's no secret that the Nashville housing market is one of the hottest markets in the country. In fact, it's ranked #6 on Zillow's most desirable housing markets for 2022. But, while the housing market is still on fire, the real estate market nationwide is starting to fizzle out. As we sit in the middle of 2022, we thought we'd dive in and look at Music City's current market trends. What can we expect from the Nashville housing market for the remainder of the year? Will prices continue to rise? Or will we see a slowdown in the market? Let's take a closer look at the numbers.
As we look at the Nashville housing market stats, remember that housing data will be behind by about 30-60 days and sometimes as high as 90 days. Sales that closed in June would have gone under contract in April or May. In this analysis, we will compare May 2022 real estate closings Vs. Junes sales.
Nashhville's Housing Inventory:
Music City Housing prices continue to rise, but buyers may have an easier time getting their offers accepted since inventory seems to be on the rise as well. In May 2022, inventory for a single-family home was 4,114 homes, while June's numbers were 5,309. If this number continues to tick up as many have predicted, this may make it easier for some buyers to get their offers accepted.
Nashville's Days on Market:
The DOM (Days on Market) has basically stayed the same. In May, the average was 25 days for a home to sell, while in June, it was 24. The difference in these numbers is not enough to reflect a change in the housing market. However, as we move forward, we need to consider whether those numbers will go up or down. Longer DOM means a slowing market, while a shorter DOM reflects a hot seller's market.
Nashville's Median Home Price:
In May, the median sales price for a single-family residence was $498,785, while in June, it was $495,070. This is not a significant difference. As we are getting close to August, we will be able to look at July's numbers as a whole, so we will have a better idea of whether or not the median sales price is actively going down.
Months Supply of Housing:
The "months supply" refers to the number of months it would take for the current inventory of homes on the market to sell, given the current number of homes for sale. A balanced market sits at about 6-7 months of supply. Anything under a six months supply is considered a seller's market, while a buyer's market is seven months or above. The current inventory in the entire MLS is a supply of 2.3 months. So, despite higher interest rates and the slow down in sales, we are still in a seller's market. As I stated in the beginning, market data lags behind the current market by 30-90 days. As we get new data for July's closings, we should expect the months supply of housing to rise, but it will take a long while before we enter into the actual definition of a buyers market.
Are buyers being priced out of the market?
The rise in mortgage rates has priced some buyers entirely out of the market. In 2021, the 30-year rate averaged 3.04%, which is nearly 2%-3% lower than our current rates. That 2%-3% difference adds hundreds of dollars to the monthly financing for a home buyer. This has priced many people out of the market.
Sales price vs. list price:
In May, the average home sold for 104.1% over list price, while in June, homes sold for 102.7% over list price. While 102.7% is still a healthy number for home sellers, this is a number that is important to keep an eye on. As we enter August-September, I predict we may see this number drop even lower.
In conclusion, we are still in a seller's market, but the tides are beginning to change. Buyers are beginning to having an easier time getting their offers accepted and may now have more options regarding things like asking for repairs or a credit to cover their closing costs. In most cases, buyers will no longer have to do things like waive their appraisal contingency or offer $50,000-$100,000 over the asking price to get the home of their dreams. Basically, we are entering a more normal and balanced real estate market for now.
If you are considering relocating to Middle Tennessee in this shifting market, we would love to help you strategize your move and guide you in the right direction. Don't hesitate to get in touch with our team of relocation experts. We love assisting newcomers in discovering what makes Music City so great!