Greater Nashville Realtors reported last week that home sales in the Nashville area were down 13.5 percent in September.
Here’s what analysts have been saying about the Nashville residential real estate market in recent weeks:
According to Redfin, Nashville saw the biggest year-over-year increase in the typical down payment among major cities. In Nashville in July, the typical down payment was $64,250, up nearly 40 percent from a year earlier. Other big jumps came in Newark, New York City and Charlotte. According to the Redfin analysis, Nashville buyers were putting down 15 percent in July, up from 12.1 percent in July 2021.
Redfin also reported that Nashville saw the third-highest year-over-year increase in the number of homes for sale last month, at 38 percent. That figure trailed only Austin and North Port, Florida.
“The bottom line is that homeowners don’t need to sell in this environment,” Redfin chief economist Daryl Fairweather said. “They locked in rock-bottom mortgage rates last year and are sitting on piles of equity. The jobs market remains very strong, so there’s little risk that mortgage delinquencies or foreclosures will rise significantly. It would take a severe — not soft — recession to send homeowners into distress. We will have to wait and see if the broader economy steers towards normalcy or recession in the upcoming months.”
Zillow found that fast-growing markets in the South, including Nashville, Atlanta and Charlotte, are expected to “retain their heat” while more inexpensive Midwest markets like Indianapolis and Minneapolis are also expected to see more limited home price declines in the next 12 months.
That means, Zillow reported, that rent growth should remain strong in the short term as high home prices keep some buyers in the rental market. Specifically, analysts said, rent growth is expected to outpace inflation, home value growth and the stock market in the next year.
"After the frantic rush for real estate over the past two years, buyers are finally seeing a calmer market. Those still able to afford homeownership are quickly regaining lost leverage, but this shift to a more balanced market is still in its early stages," said Nicole Bachaud, senior economist at Zillow. "Home shoppers priced out of the market are in a tight spot, though, as high and rising rents could cut further into their ability to save up for a down payment."
Knock reported that 19 of the 100 largest American housing markets were expected to favor buyers by August 2023, meaning sellers will be more likely to accept offers below asking price. The list of cities Knock identified includes Nashville, along with Austin, Charleston and Charlotte.
"Although the general consensus is the housing market is undergoing a much-needed reset, which is welcome news to many home shoppers who will have more choices and less competition for the foreseeable future, not all markets are seeing the same trends," said Knock co-founder and CEO Sean Black. "In reality, there's a great housing divide taking place in the U.S., especially in the East and South, where despite a slowdown in sales and slower home price growth, many markets continue to favor sellers."
According to a Realtor.com analysis, for-sale housing inventory has increased dramatically in Nashville in the past year. Inventory jumped 125.3 percent in Nashville compared to last year, lagging just Phoenix and Raleigh at the top of the list. Nashville also saw a 19.6-percent increase in the number of new sellers from September 2021 to September 2022. That increase trailed just New Orleans, where 2021 numbers were dampened by Hurricane Ida.
"For homeowners deciding whether to make a move this year, remember that listing prices – while lower than a few months ago – remain higher than in prior years, so you're still likely to find opportunities to cash-in on record-high levels of equity, particularly if you've owned your home for a longer period of time,” Realtor.com chief economist Danielle Hale said. “And for prospective buyers grappling with affordability, you may have more bargaining power than you realize, particularly in areas where time on market is rising."