Nashville homebuyers are still having to move quickly to clinch a deal, forcing many of them to make snap decisions about what house to purchase and sometimes pay over asking price. Some potential buyers are reluctant to overpay and say they are waiting for the market to “soften” in 2022.
But newly released statistics from Greater Nashville Realtors don’t indicate that the market will cool off anytime soon. In November, the median home sales price in Davidson County was $395,000 — a 13-percent increase from November 2020.
“Soften doesn’t mean home prices are going to drop or people are going to take a loss,” GNR president Steve Jolly said. “Home prices will continue to rise but perhaps at a slower pace.”
Traditionally, homes have appreciated in value by 4-6 percent annually, but between 2020 and 2021 sales prices have had homes appreciating at double digit rates due to low supply and unprecedented surge in demand.
Jolly noted that several forecasts, including the National Association of Realtors’, predict Middle Tennessee will be the No. 1 market for real estate in 2022. These predictions, Jolly said, are based on Tennessee’s comparably strong economic recovery from the pandemic and a thriving job market, fueled in part by company relocations and expansions.
“Those who are waiting on the sidelines are going to be left out,” John Dotson, GNR’s legislative chairperson, said.
Buyers should be more concerned with rising interest rates than high prices, according to Jolly.
“For example, if you purchase a home at $350,000 at a 2.5 percent interest rate, your monthly payment is $1,106,” Jolly said. “Let’s say you wait to buy a home for $300,000 in the spring but then the interest rate is 4.5 percent — your monthly payment is $1,216.”
Freddie Mac’s market outlet forecasts interest rates to rise over the next 12 months up to 4 percent. Lawrence Yun, NAR’s chief economist, also suspects interest rates to continue to rise as inflation persists.