The skyline of gorgeous Nashville, Tennessee, often known as “Music Metropolis” alongside the banks of the … [+]
In 2023, the Nashville housing market presents a paradox that has left each patrons and sellers scratching their heads. Whereas the worth tags on houses proceed to soar, reflecting a strong demand and a metropolis bursting with potential, the tempo at which properties are altering palms has noticeably decelerated. This juxtaposition poses a mess of questions in regards to the underlying components driving the market dynamics and what they portend for the way forward for Music Metropolis’s actual property panorama.
Learn on to seek out out what’s occurring within the Nashville housing market and whether or not it could be facing a crash.
Nashville Housing Market 2023: Overview
We analyzed 19 main cities plus the housing marketplace for the Nashville metro space total. Whereas many different main American housing markets, such because the Austin housing market, have skilled marked declines in residence costs year-over-year, within the Nashville housing market, costs have elevated most often. In 12 out of 19 cities within the higher Nashville housing market we analyzed, the median sale value elevated year-over-year from August 2022 to August 2023.
As you’ll be able to see, residence costs within the metropolis of Nashville correct and costs for the Nashville metro space total have moved carefully in line with one another over the past 5 years. The median sale value within the Nashville metro space rose by 2.3%, from $444,820 in August 2022 to $455,000 in August 2023, whereas in Nashville correct, it rose by 3.3%, from $445,000 to $459,900 over the identical interval. The state-wide median sale value for Tennessee elevated extra, by 5.8%, from $361,000 in August 2022 to $381,900 in August 2023. Moreover, the three-year change in residence costs is almost equivalent throughout all three areas: The median sale value in Nashville elevated by 37.3% from August 2020 to August 2023; within the Nashville metro space, it elevated by 37.9%; and for Tennessee total, it elevated by 37.8%
The median sale value in Nashville reached a peak of $470,000 in Might 2022 and, regardless of the speed hikes instituted since then, town’s median sale value reached one other excessive in July 2023, when it stood at $460,000. The desk beneath breaks out the median sale costs in all of the cities of the Nashville metro space we analyzed, from August 2018 via August 2023. The desk is ranked so as of areas that skilled the best year-over-year improve of their median sale value:
Hendersonville skilled the biggest year-over-year decline, falling by 9.1%, from a median sale value of $549,950 in August 2022 to $500,000 in August 2023. Nonetheless, this have to be tempered by the truth that, in pre-pandemic days, residence costs in Hendersonville had been far decrease: In August 2018, the median sale value in Hendersonville was $298,500. Thus, Hendersonville skilled one of many greatest pandemic-induced boosts in residence costs within the Nashville housing market. On the opposite finish of the spectrum, Goodlettsville witnessed the biggest improve year-over-year, rising by 24.1%, from $352,500 in August 2022 to $437,500 in August 2023. Goodlettsville, nonetheless, was additionally one in every of cities that was hit hardest by the pandemic’s impression — little doubt harm by the truth that the Tyson Meals
TSN
Stock within the Nashville Housing Market Presents a Blended Image
A lot of the cities we analyzed within the higher Nashville housing market skilled decreases in accessible stock since final 12 months. Nonetheless, in each town of Nashville correct and within the Nashville metro space total, stock grew year-over-year, by 11.6% and 0.8% from August 2022 to August 2023, respectively. That being mentioned, the expansion in Nashville’s accessible for-sale stock is minor in comparison with different American cities, such because the Denver housing market the place stock rose by greater than 80%. The desk beneath particulars the change in accessible for-sale stock within the higher Nashville housing market:
Hendersonville, which has seen its median sale value drop by 9.1% year-over-year, additionally skilled the greatest increase in for-sale inventory: From 213 houses on the market in August 2022, Hendersonville’s accessible stock grew by 21.6%, reaching 259 houses on the market in August 2023. In complete, 4 out of 18 of the Nashville space housing markets analyzed right here witnessed a rise in stock year-over-year. In any other case, the vast majority of cities within the higher Nashville space skilled declines.
Nashville’s surrounding suburbs typically noticed accessible stock lower from August 2022 to August 2023. In six cities, the year-over-year decline in stock was 10% or extra, with town of Springfield experiencing the biggest drop: From 108 houses on the market in August 2022, stock fell by 38.9%, to solely 66 houses on the market in August 2023.
Homes for Sale within the Nashville Housing Market Are Staying on the Market Longer than Earlier than
An extra, very helpful metric for analyzing housing market exercise is the size of time a house on the market spends in the marketplace earlier than getting purchased up. Redfin
RDFN
What’s startling is that, in a number of cities within the Nashville space, the median days on market have reached ranges increased than pre-pandemic days. In Lebanon, for example, the median days on market rose probably the most, by 114.3%, from 28 days in August 2022 to 60 days in August 2023. This latter determine is increased than the median days on market again in August 2018, when it was 48 days. The identical goes for:
- Murfreesboro housing market: 40 days in August 2023 versus 36 days in August 2018
- La Vergne housing market: 50 days in August 2023 versus 41 days in August 2018
- Gallatin housing market: 55 days in August 2023 versus 50 days in August 2018
- Dickson housing market: 66 days in August 2023 versus 49 days in August 2018
- Hendersonville housing market: 49 days in August 2023 versus 48 days in August 2018
This means a considerable normalization in housing activity in these markets. And that is mirrored within the knowledge on sales-to-list ratio — the imply ratio of every residence’s sale value divided by their listing value masking all houses — in these markets. Usually, in sizzling housing markets, the sales-to-list ratio tends to be above 100%, as a result of houses are promoting for greater than their preliminary listing value. Within the 5 cities listed above, the sales-to-list ratio has not moved a lot since final 12 months and even over the past 5 years. Within the metropolis of Nashville housing market, the sales-to-list ratio was 98.6% in August 2018 and was 98.5% in August 2023.
The Backside Line on a Nashville Housing Market Crash
The concept that the Nashville housing market will crash appears unlikely, largely as a consequence of the truth that it has already skilled a noticeable slowdown in homebuying exercise. In distinction to many different housing markets in the U.S., costs within the higher Nashville space have elevated year-over-year and the beneficial properties have been pretty modest. The variety of month-to-month residence gross sales have declined year-over-year in most cities we analyzed, however that development has been pretty constant over the past three years, versus a pointy and extra instant downturn. And the proportion of energetic listings that had their costs dropped — which generally will increase year-over-year in housing markets which might be within the midst of a bubble — has decreased by 5.4% within the Nashville housing market from August 2022 to August 2023. Certainly, solely two cities within the higher Nashville space — La Vergne and Smyrna — skilled an increase within the share of energetic listings with value drops year-over-year.
