Nashville Real Estate Market Update: December 2023 Price Trends

The Nashville real estate market is constantly changing which is why we felt the need to create a 'living' blog post that monitors and interprets the Davidson County real estate market on a monthly basis. As a real estate brokerage and member of the MLS, we have access to exclusive market data. The goal of this post is to democratize and interpret this data so that potential home buyers and sellers can educate themselves on the current market conditions.

Of course, the best way to get a pulse on the market is to talk with an experienced local real estate agent. If you have any questions about the state of the market or the home buying/selling process, please feel free to contact us at contact@felixhomes.com or 615-354-5731.

December 2022

Single Family Homes

Graph depicting the Nashville real estate market in December 2022 for Single Family Homes

The turbulent Nashville real estate market of 2022 was shaped by rapidly rising interest rates and low inventory. In 2022, buyers were forced to relinquish their contingencies and pay well above the listed price. As we look back on the past year, we will analyze the Nashville real estate market and provide insight into where it may be headed in 2023.

December Key Takeaways:

  • The number of new listings added to the market reached a new low (512 homes)
  • The total inventory listed for sale is down to 1,947 homes
  • The average days on market before going under contract was 25 days
  • 30-year mortgage rates dropped slightly in December (6.27%) but have since increased in January (6.48%)
  • Since December 2021, the median home price is up 4.0% and the average is up 10.6%
  • Only 569 homes closed in December 2022 compared to 1,092 in December 2021

In December, the Nashville real estate market ended the year with its worst-performing month. Despite the low inventory, the median sales price for Davidson County dropped from $480,000 in November to $457,745 in December, a decrease of 4.6%. Similarly, the average sales price went from $695,662 in November to $597,351 in December.

The significant drop in median sales price is surprising, particularly because the supply side of the market (inventory) is extremely low. In December, there were only 512 new single-family homes added to the market, a 36.3% decrease from December 2021 (804 homes). The holiday season may have played a role, but it is not likely to be the sole reason for this trend.

One possible explanation is that homeowners with low fixed-rate mortgages (around 4%) have little incentive to sell, as they would be subject to today's higher interest rates (around 6.5%) when buying their next home. In fact, 51% of homeowners with a mortgage have locked in a rate below 4%. This unintended consequence of extremely low rates will cause supply headwinds for years to come. Furthermore, fewer homes closed in December 2022 (569 homes) compared to December 2021 (1,092 homes) – a decrease of nearly 48%.

Homes that do get listed also tend to stay on the market longer. In December, the average days on market rose to 25 days, compared to just 13 days this time last year. Additionally, when homes do sell, they are selling at a significant discount compared to the initial list price. In December 2022, the percent of list price received decreased to 97.6%. For example, a home listed for $500,000 would sell for $488,000 on average.

Graph depicting the 30-year fixed rate mortgage as of January 5th

Higher interest rates were the main cause of lackluster demand in the Nashville real estate market in 2022. The average rate for a 30-year mortgage rose from 3.22% in January to just over 7% by the end of November. Even though rates decreased slightly in December, the average 30-year fixed-rate mortgage is still well above 6% according to FreddieMac.

As we look to 2023, it's unclear what the future holds for Nashville's housing market. The trajectory of interest rates will play a significant role, but we have recently seen an increase in buyers entering the market. These buyers are looking for deals and are starting to take notice of the available inventory. Our prediction is that Nashville's real estate market will remain resilient, outpacing other cities such as Austin, Phoenix, Charleston, and Denver, which have seen steeper decreases.

This resilience is due in part to Nashville's strong local economy, with companies continuing to relocate here. Additionally, for nearly a decade, the number of new homes constructed in Nashville has not kept pace with the demand for housing due to the city's population growth. At Felix, we expect the first half of 2023 to be similar to the second half of 2022, characterized by decreasing prices, longer days on market, and strong opportunities for buyers. However, we predict that the market will return to normalcy in the second half of 2023, with prices bottoming out and demand returning. While we may not see the extreme sellers' market of early 2022, we believe that by this time next year, sellers will once again have an upper hand.

If you are considering buying or selling, please don't hesitate to contact us at Felix by calling 615-354-5731. We can help you save money in this challenging economy, and our clients have saved over $1,000,000 in commission fees to date.

November 2022

Single Family Homes

Graph depicting the Nashville real estate market in November 2022 for Single Family Homes

The 30-year mortgage may have peaked in November – what does this mean for the Nashville housing market?

November Key Takeaways:

  • The number of new listings added to the market was down (746 homes)
  • The total inventory listed for sale was up (2,342 homes)
  • The average days on market was 24 days
  • 30-year mortgage rates may have peaked (7.08%)
  • Prices are down ~5.9% since June
  • Prices are up 10.7% since November 2021

Before we take a deep dive into mortgage rates, let's first recap how the Nashville real estate market performed in November.

The number of new listings added to the market in November was just 746 single-family homes. This was the fewest number of new listings added to the market since January. For context, November 2021 saw 982 new listings and November 2020 saw 1,079 new listings. It's safe to say that seasonality plays a role. After all, inventory typically peaks over the summer when most folks decide to list their home. Even taking seasonality into account, the number of new listings in November was very low.

It makes sense that inventory has been low the past few months. After all, most folks aren't going to sell their home in an environment where prices are decreasing, homes are taking longer to sell, and interest rates are at multi-year highs.

The total number of single-family homes for sale in Davidson County was 2,342 in November. Surprisingly, this is actually more inventory than the summer months which averaged about 2,000 single-family homes listed for sale. The low number of new listings but relatively high inventory is a clear indication that homes are taking longer than one month to sell due to low buyer demand.

In fact, the average days on market in November, according to Realtracs, was 24 days! For context, the average days on market in June was just 6 days.

How are prices reacting to a slow market with little buyer demand? It should be no surprise that prices are down. For example, the median sales price for a single-family home in Davidson County in November was $480,000. At its peak in June, the median sales price was $509,845 representing a decrease of 5.9%. While this may seem depressing for Nashville homeowners, keep in mind that the median sales price in November 2021 was $433,700–still up 10.7% compared to a year ago.

How competitive was the Nashville real estate market in November? Taking a look at the percent of list price received (a stat that compares the original list price to the final sales price) we can see that it is definitely a buyer's market. For example, the percent of list price received in November was 97.7%. This means that a home listed for $500,000 will have a final sales price of just $488,500. Gone are the days of selling your home for more than it was listed for.

What do we have to thank for this dismal real estate market? You guessed it...interest rates.

Graph depicting the 30-year fixed rate mortgage as of December 15th

The average interest rate for a 30-year mortgage according to a survey by FreddieMac reached a whopping 7.08% in November. Thankfully, mortgage rates have come down since then and are currently sitting at 6.31% as of December 15th. Let's hope that lower mortgage rates will begin to add more demand to the real estate market.

If you're thinking about buying or selling, feel free to give us a call at 615-354-5731. At felix, we'll help you save money in this challenging economy. In fact, our clients have saved over $1,000,000 in commission fees to date!

October 2022

Single Family Homes

Graph depicting the Nashville real estate market in October 2022 for Single Family Homes

The real estate market is at a standstill. Home prices are down in Nashville but not as much as in other markets.

October Key Takeaways:

  • The number of new listings is down
  • Demand is at a multi-year low (thanks to 7% interest rates)
  • Homes are taking significantly longer to sell
  • Those that list are doing so at a discount (prices are down 5.3% since June)
  • Those on the market are taking price cuts (33.4% of listings in September dropped their price)

Like any market, real estate prices are dictated by a simple supply and demand equation. At felix, we're here to analyze both sides of the market to see if this is 2008 all over again or if we are in a short-term correction.

Let's start with the demand side of the market. The historic rise in interest rates (see below) has brought demand to a multi-year low. Combined with rampant inflation, a struggling stock market, and talks of layoffs at Fortune 500 companies, it's easy to see why potential home buyers have pumped the brakes.

Graph depicting the 30-year fixed rate mortgage as of November 3rd

We know demand is down but how about the supply side of the market?

The supply of homes currently for sale is also historically low. At felix, we predict high interest rates will lead to decreased mobility and a lower long-term supply of listings. After all, why would a homeowner who locked in a sub 4% interest rate over the past few years want to sell their current home and be forced to purchase with a 6%+ interest rate?

Let's take a look at a few examples to put things in perspective. The change in monthly mortgage payments from September 2021 compared to September 2022:

  • A $200,000 loan has increased by $381 per month
  • A $400,000 loan has increased by $762 per month
  • A $600,000 loan has increased by $1,142 per month

Now that we've explained the supply and demand sides of the market, let's look at the latest data courtesy of Realtracs MLS.

The median sales price in Davidson County in October was $497,500. On a price-per-square-foot basis, this represents a decrease of roughly 5.3% compared to the market's highs we saw in June.

This is significantly less than other markets. For example, according to Money.com, the following cities have experienced the largest decrease in median home prices since June:

  1. Austin, Texas (-10.3%)
  2. Phoenix, Arizona (-9.9%)
  3. Palm Bay, Florida (-8.9%)
  4. Charleston, South Carolina (-8.6%)
  5. Ogden, Utah (-8.6%)
  6. Denver, Colorado (-8.0%)
  7. Las Vegas, Nevada (-7.9%)
  8. Stockton, California (-7.7%)
  9. Durham, North Carolina (-7.5%)
  10. Spokane, Washington (-7.4%)

There were 2,432 active listings for sale in Davidson County in October and 932 new listings were added to the market throughout the month.

Supply and demand are both low but make no mistake, it's definitely a buyer's market. The percent of list price received which we refer to as the "heartbeat" of the market was 98.2% in October. In other words, a home that was listed for $500,000 ended up selling for $491,000 on average.

Last, homes are taking longer to sell. Gone are the days of homes going under contract in a matter of hours. The average time it took for a home to go under contract in September was 18 days compared to just 6 days on average in June.

If you're thinking of buying or selling in this challenging market, give us a call today at 615-354-5731. We'll help determine a strategy using data and analysis and help you decide if it's a good time to buy or sell.

September 2022

Single Family Homes

Graph depicting the Nashville real estate market in September 2022 for Single Family Homes.

Interest rates are up, prices are down – the Nashville real estate market has continued to cool since reaching record highs at the beginning of the summer.

There were 1,051 new listings brought to the market in Davidson County during the month of September. This is actually the fewest number of new listings added to the market since April. While seasonality definitely plays a role since not as many people list their homes in the Fall, high interest rates may also be contributing to the low supply.

Graph depicting the 30-year fixed rate mortgage as of October 6th

High interest rates decrease housing mobility. After all, why would someone who locked in a 3%, 30-year mortgage decide to move and be forced to purchase their next home with a 6% interest rate?

The number of active listings in September was 2,411. This is slightly higher than the number of active listings in August as a larger percentage of unsold inventory has carried over from the previous month. Homes have stayed on the market longer. In fact, the average days on market in Davidson County during the month of September was 16 days. While 16 days may not sound like a long time, keep in mind that the average days on market in June was just 6!

Higher interest rates and a slight increase in supply are causing prices to come down. Luckily, this is not a "crash". Instead, it's a healthy pullback in the market which was previously growing at 20%+ per year. The average sales price of a single-family home in Nashville was $597,737 during the month of September. This is 13.6% lower than June's average sales price ($691,468). The median sales price for a home in Davidson County was $475,000, 6.8% lower than the June high ($509,845).

The market has gotten less competitive. Gone are the days of paying over the list price! In fact, the average percent of list price received during September was 98.2%. In other words, a home listed for $500,000 would sell for $491,000. Compare this to April when homes were selling for 4.1% over the list price on average and that same $500,000 home would have sold for $520,500.

Rising interest rates are in large part to blame for the slowdown we've been experiencing. From just over 3% for the average 30-year mortgage at the end of December to 6.7% at the end of September, rates have more than doubled.

What does this mean for the average home buyer? Let's look at two scenarios:

If a buyer purchased a $500,000 home in December and put down 10%, their monthly mortgage payment would have been just over $1,900 per month. Today, that same $500,000 home with 10% down would result in a monthly payment of approximately $2,900! In a nutshell, this is why the national real estate market has cooled so quickly.

If you're thinking of buying or selling in this challenging market, give us a call today at 615-354-5731. We'll help determine a strategy using data and analysis and help you decide if it's a good time to buy or sell.

August 2022

Single Family Homes

Graph depicting the Nashville real estate market in August 2022 for Single Family Homes.

Have you ever been fishing where you sit out on the water all day and leave without a single bite... not even a nibble? This is the current state of the Nashville real estate market. It is safe to say that the fish just aren't biting. The second half of June was when the first signs of a slow down became apparent. This slow down hasn't been reflected in the market data until August.

August saw 1,089 new listings brought to the market. This was slightly fewer than July, however the total number of homes available for sale has increased to 2,273 as homes listed in previous months have remained on the market. That being said, supply is still not as high as it was in August 2021 (3,186). The steady increase in supply over the past couple of months is not helping prices.

According to data provided by Realtracs, the median sales price for Davidson County in August ($470,000), was down 3.69% since July ($488,000). On the ground, we are seeing price reductions becoming the norm. When buyers choose to make an offer, no longer are they accustom to pay over the list price. In fact, the percent of list price received in August was 99.2%, falling below 100% for the first time since March 2021. This is a clear indication that we are officially in a buyer's market.

The lack luster demand for housing is largely being driven by higher interest rates. The average rate for a 30-year mortgage started out the month of August at 4.99% and ended the month at 5.66%. Currently, the interest rate for a 30-year mortgage is the highest it has been since 2008.

Graph depicting the 30-year fixed rate mortgage from September 13th 2021 to August 29th 2022.

What does all of this mean for folks looking to buy or sell in the Nashville area?

For sellers, the key is to remain patient and understand that it may take a few weeks or more to receive an offer. In our experience, higher priced listings are taking especially long to sell since higher borrowing costs means there are fewer buyers that can afford that price point.

For buyers, the key is to understand that prices are negotiable. If you see a home that you are interested in, however you think the price is a bit on the high side, don't be afraid to make an offer that may be significantly lower that what the home is listed for.

July 2022

Single Family Homes

Graph depicting the Nashville real estate market in July 2022 for Single Family Homes.

It's official, the music has stopped. Inventory is up, and the insane housing market that has lasted roughly two years has come to an end.

Every market relies on supply and demand to determine price and the real estate market is no different. So, for those looking to buy or sell in the near future, what does a high supply, low demand environment look like for the Nashville real estate market? Will prices go down and if so, by how much?

For the past two years, Nashville homeowners have had a dream scenario – low supply and high demand which has resulted in home prices appreciating by nearly 30%. Keep in mind that real estate is not supposed to appreciate by 30% in just two years. Under normal circumstances, it would take roughly 6-10 years to see the same level of growth.

Let's take a look at the supply side of the market first. Determining the supply side of the market is straightforward since we can take a look at how many listings were added to Realtracs in Davidson county. Since January 2021, the number of single-family homes for sale at any given time in Davidson county fluctuated between 1,100 - 1,700. This was shocking because prior to 2021, we were used to having about 3,000 active listings on the market at any given time. Simply put, the supply side of the market was cut in half.

Gauging the demand side of the market is a little more difficult as there is no way to accurately assess how many serious buyers are out there. That said, I think we can all agree that demand for Nashville homes in particular surged during the past two years. This was due to:

  • Increased mobility due to "work from home" policies.
  • Flight from high-cost coastal cities to lower-cost cities.
  • Historically low-interest rates which made getting a mortgage seem like "free money".
  • Millennials gaining the buying power to go from renting to owning.
  • A booming stock market and healthy economy that allowed "mom & pop" real estate investors to purchase multiple homes.
  • Institutional real estate private equity funds that purchased single-family homes by the tens of thousands.

So, now that we know what caused the "dream scenario" for homeowners which led to 30% appreciation in two years, let's take a look at where we are at today. In July 2022 there were 2,250 active listings for sale. So, we're still below 3,000 active listings, however, back in April 2022 (which was the peak of the housing market), there were only 1,297 homes actively listed for sale. This represents an increase in inventory of 73% in just three months! It's likely inventory will continue to increase in August and September as sellers rush to list their homes in an attempt to capitalize on what was a perfect seller's market.

What does higher inventory mean for buyers and sellers?

  • Increased days on market: In June, the average days on market before getting an offer was just 6 days. This number increased to 10 days in July and it will continue to increase. Similar to the pre-pandemic market, it will become normal again for a home to be on the market for 14 - 30 days before getting an offer.
  • Homes will not sell for more than the list price: At Felix Homes, one of our favorite stats is the percent of list price received. This number represents the relationship between the final sales price compared to the initial list price. For the past two years, the average percent of list price received was over 100% meaning that homes were actually selling for more than their list price. April for example saw homes selling for 4.3% more than their list price. In July 2022, the average percent of list price received was just 100.9% and we will likely see this number dip back below 100% in August for the first time in over a year.

But will prices decrease and if so, by how much?

Yes, it's likely that prices will go down – that is just simple market forces at work when supply is greater than demand. While we are confident that Nashville will be sheltered from a significant decrease that other cities may experience, there is no doubt that prices could realistically come down by 3% - 7% over the next year. While we don't have a crystal ball, it's logical that any market that has appreciated so much, so quickly would see a correction. Keep in mind we are using the word "correction", it will NOT be a crash. This is not 2008.

How should sellers handle the new market environment? Be patient. Your home will likely not sell in the first few days and that's okay. Adjust your expectations when it comes to price. Just because a neighbor sold their home for $500,000 in April or May doesn't mean that you will be able to sell your home for that price if you list in September or October.

How should buyers approach the new market? Understand that the tide is shifting. If you see a home you like but you feel the price is too high, offer a price you think is fair even if it is significantly below the list price. Buyers should also be thinking long-term with the assumption that they will live in the home for at least three years. This is enough time to weather the current market conditions and build equity.

There's no denying that we are entering a new chapter in the housing market. If you're thinking about buying or selling in the near future, let's have a conversation. We will understand your unique situation and recommend a path forward. Plus, our reduced commission model on the buy and sell side means you'll save a whopping $8,100 in Realtor commissions on average. Give us a call today at 615-354-5731 to talk about how the market is doing or to schedule a complimentary home valuation.

June 2022

Single Family Homes

Graph depicting the Nashville real estate market in June 2022 for Single Family Homes.

You've probably heard in the news lately that the real estate market is on the brink of a major correction. Just Google "real estate market" and you're bound to see articles explaining that sellers are reducing their prices at a level we haven't seen since the great recession. The recent inflation headlines and soaring gas prices add to a rather bleak outlook for the economy. Luckily, we live in Nashville, the "it city" which should experience less of an impact if there is a slowdown in the housing market, right?

The June market data courtesy of Realtracs is in but unfortunately, the numbers may not tell the entire story. The main thing to keep in mind is that real estate data lags behind the actual market. Take for example the June market data. Homes that closed in June likely went under contract in April or May since most home closings take approximately 30 - 45 days. We won't actually know how the market performed in June until the August data is published. Not to worry, as your local real estate expert, Felix Homes is here to fill in the gaps and tell you how the market is currently doing from a "boots on the ground" perspective. More on this in just a bit but first, let's see what the numbers say.

The number of new listings added to the market in June was 1,281. This is a healthy number and is fairly consistent with the number of listings added in May (1,225). The total number of homes available for sale in June was 1,894 which is about 300 more than May (1,589). This is slightly concerning as less demand for homes and more supply of homes for sale means that prices are likely to come down.

While lower prices may be on the horizon, we haven't seen lower prices show up in the data...yet.

June set another price record with the average sales price of a single family home in Davidson County reaching $691,468. The median sales price was not far behind at $509,845.

Our favorite metric at Felix Homes is the percent of list price received. This metric compares the initial list price to the final sales price. In other words, if the percent of list price received is over 100%, that means on average, homes are selling for more than the list price. The May market data included a percent of list price equal to 104.1%. On average, homes were selling for 4.1% over the list price in May. June, however, saw a percent of list price of 102.7%. This is still a healthy number although it is a bit concerning the extent to which it has decreased compared to the previous month. The sky may not be falling down but it's definitely something to keep an eye on.

Homes are still selling fairly quickly. In June, homes went under contract in just six days on average.

Graph depicting the 30-year fixed-rate mortgage from July 15th, 2021 to July 14th, 2022.

What's causing the market to slow? It's largely attributed to the abrupt increase in interest rates. At the beginning of January, the rate for a 30-year mortgage was approximately 3.22% according to FreddieMac's Primary Mortgage Market Survey. The beginning of June saw the 30-year mortgage rate cross 5% and it continued to increase throughout the month. Rates peaked the last week of June and hit 5.81% but have since come down slightly. This unpredictability is causing many buyers to put their plans on hold as they wait to see if rates come back down in the coming months.

Are you considering selling your home but think you missed the boat? At Felix Homes, we pride ourselves on being your local market expert. Plus, our reduced commission model on the buy and sell side means you'll save a whopping $8,100 in Realtor commissions on average. Give us a call today at 615-354-5731 to talk about how the market is doing or to schedule a complimentary home valuation.

May 2022

Single Family Homes

Graph depicting the Nashville real estate market in May 2022 for Single Family Homes.

What did May have in store for the Nashville real estate market? According to Realtracs MLS data, the number of homes for sale in Davidson County throughout the month was 1,589 which is a slight increase compared to April (1,297) but still over 50% lower than May 2021 (3,232). The number of new listings added to the market in May was 1,225 which is roughly the same as the number of new listings added last May (1,314) and slightly more than the number of listings added one month ago (1,009). While it is typical for the supply of listings to increase as we head into the peak summer selling season, it is definitely something to keep an eye on.

May was yet another month of increasing prices. The median sales price for a single-family home in Davidson County surpassed $500,000 which is more than $80,000 compared to this time last year. The average sales price set another record in May coming in at $673,740 which is $20,000 higher than April 2022 ($653,998).

Our favorite metric at Felix Homes is the percent of list price received. We refer to this as the "pulse of the market" as it allows us to gain insight into how competitive offers are. April 2022 came in at an astounding 104.3% and May was about the same at 104.1%. This means that on average, homes are selling for roughly 4% over their initial list price. If this number continues to decrease, it may be a sign that the market is starting to slow down.

Last month, we wrote about the nervousness in the market as rampant inflation, rising interest rates, a declining stock market, and talks of a possible recession caused some buyers to put a pause on their home search. So, are interest rates still rising rapidly? According to Freddie Mac's Primary Mortgage Market Survey, the 30-year peaked in the second week of May at 5.3%. Rates have since come down slightly ending the month at 5.1%.

Graph depicting the 30-year fixed-rate mortgage from June 2nd, 2021 to June 2nd, 2022.

What are we seeing on the ground? We've definitely noticed a slight slowdown in the market. A slowdown doesn't necessarily mean that prices have decreased – yet. However, we are seeing homes stay on the market for a slightly longer period of time. In addition, over 20% of home sellers have had at least one price reduction since listing their homes. According to Bloomberg News, home sellers are cutting prices at the highest level since 2019.

We've also noticed buyer contingencies starting to tighten. For example, it's been common over the past two years for the buyer to pay for title insurance in Tennessee. Now, we are starting to see more offers where the seller is paying for title insurance. Same goes for the inspection. While it was the norm for the buyer to do a "pass or fail" inspection over the past two years, now we are starting to see some buyers asking for repairs.

Our final take is that the market remains relatively strong, however, we wouldn't be surprised if the market starts to cool off in the months to come. Keep in mind that a cooling market may not necessarily mean that prices will decrease. We will start to see homes staying on the market for a longer period of time, a percent of list price received that is closer to 100%, and tightening buyer contingencies related to the inspection, appraisal gap, and closing costs.

If you're looking to buy or sell in this changing market, rely on a team of experts who are up-to-date on the latest trends. At Felix Homes, we believe that the most successful outcomes start with understanding the current market environment. Plus, our reduced commission model on the buy and sell side means you'll save a whopping $8,100 in Realtor commissions on average. Give us a call today at 615-354-5731.

April 2022

Single Family Homes

Graph depicting the Nashville real estate market in April 2022 for Single Family Homes

Have we reached the peak? April was the strongest month yet for the Nashville real estate market but could we be reaching a turning point? Rising interest rates, hiring freezes, and talks of a potential recession in the near future are having an impact on the stock market but will the real estate market follow suit? (I've misplaced my crystal ball otherwise I would tell you...)

April saw nearly 1,300 homes listed for sale throughout the month, a slight increase from one month prior (1,151) but still nearly 60% lower than one year ago (3,202). Supply is expected to ramp up throughout the summer as more people list their homes to coincide with the school year. The number of new listings brought to the market in April was 1,009 – about the same as March (990) but roughly 23% less than April 2021 (1,315).

How did prices fare if inventory remained about the same? Well, the average price of a single-family home in Davidson County hit $653,998 – a new record by a decent margin. To put this in perspective, March was also a record month with an average sales price of roughly $625,000. The average sales price in April 2021 was just $512,746. The median sales price in April 2022 hit $485,445 which is nearly 24% higher than the median sales price one year ago.

One of our favorite metrics, the percent of list price received, had a blowout month coming in at 104.3%. This means that on average, buyers are paying 4.3% above the list price. This is likely caused by a rush to get homes under contract at all costs before interest rates continue to skyrocket.

Speaking of interest rates, the 30-year mortgage rate hit 5% in April, the first time since 2011. I know what some of you old-timers are thinking, "when I bought my first home, rates were at 10%". While this may be true, anyone who has purchased a home in the past 10 years was accustomed to a low-rate environment. We've been conditioned to expect low rates which have fueled our economy since the Great Recession.

Graph depicting the 30-year fixed-rate mortgage from May 5th, 2021 to May 5th, 2022.

What's more frightening is not that rates are now above 5% but rather the swift pace at which we've gotten there. Prior to January, you could have locked in a 30-year interest rate at just above 3% and while this may not seem like a big deal, it's the difference in your mortgage being $2,700 per month vs $2,100 for a $500,000 home. This is what is causing so much anxiety and fear in the market.

If you're looking to buy or sell in Nashville, don't do it alone! Let's talk about the market and come up with a strategy to navigate this challenging time. While home prices and interest rates are skyrocketing, one thing remains the same – at Felix Homes, we offer a 5-star service for a lower commission. Sellers can take advantage of our 1% commission and buyers can save up to 1.5% on the sales price of their home. Give us a call today at 615-354-5731.

March 2022

Single Family Homes

Graph depicting the Nashville real estate market in March 2022 for Single Family Homes

I think it's safe to say that the Spring "real estate season" is officially upon us! At Felix Homes, we've been predicting that the limited inventory of homes available for sale coupled with the strong demand from out-of-state buyers will create the perfect storm resulting in a highly competitive market – even in the face of rising interest rates. So far, this hypothesis has proven true.

In March 2022 the number of homes available for sale throughout the month was 1,151. How does this stack up? It's actually a slight increase compared to February (1,101) however inventory is still down over 63% compared to March 2021 (3,179). The number of new listings added to the market during March 2022 (990) tells a similar story. The number of new listings is up compared to February (786) but still about 25% lower than this time last year (1,313). Our analysis of this data is – yes, we are facing a period of low supply, however, we believe a surge in demand for Nashville homes is just as much to blame for skyrocketing prices.

Where is this surge of demand for Nashville homes coming from?

  • Buyers who have been looking to purchase homes for the past 6-12 months who now feel the urgency to get something under contract before interest rates continue to increase.
  • Costal out-of-state buyers who generally have more buying power due to the higher cost of housing in the states they are fleeing.
  • Large institutional real estate investors who are purchasing single-family homes by the thousands and renting them out.
  • Smaller "Mom & Pop" real estate investors who are building a real estate portfolio.

This is bad news for first-time homebuyers as three of the four groups above are likely paying cash (and waiving contingencies) when purchasing.

I don't think there is any question about how this is impacting prices. The average sales price of a single-family home in Davidson County reached $624,416 in March 2022 – a new record by a decent margin. This represents a 29% increase in the average sales price compared to March 2021 and just over a 5% increase compared to the average sales price one month ago! The median sales price does not paint a nicer picture at $479,890 or just over 26% higher than this time last year.

The competition in the market is not just about the price someone is willing to pay. A home seller bases their decision on which offer to choose based on the contingencies (or lack thereof). From our experience representing countless clients on both the sell-side and buy-side of a transaction, it's safe for us to say that the lack of contingencies has never been greater. For example, "pass/fail" inspections have been fairly common for over a year now but we are currently seeing an increase in waiving the inspection altogether. Appraisal gaps have also been fairly common but have generally been around 5% of the home price. Now appraisal gaps are commonly seen at 10% with some buyers waiving their appraisal contingency to compete with cash buyers. The last example is seller occupancy. It never used to be common for a buyer to allow a seller to stay in the home after closing rent-free. Now, 30-day rent-free occupancy is common with some sellers even requesting to stay longer at NO COST!

One of our favorite metrics at Felix Homes is the percent of list price received. We like to think of it as the pulse of the market as it represents the relationship between the initial list price compared to the final sales price. If the percent of list price received is 103.7% (which it was in March 2022), that means on average, homes are selling for 3.7% above their initial list price. You could say that the pulse has never been stronger.

Part of what's driving this market and a cause for concern is rising interest rates. The Federal Reserve increases interest rates as a way to curb inflation – the less "cheap money" available, the less people may spend. That said, rising rates are causing panic among homebuyers who are not paying cash (yes they exist) as their monthly mortgage payment at a 5% interest rate is noticeably higher than it was at a 3% rate. According to Freddie Mac, the 30-year rate at the end of March was 4.67% up significantly from 3.11% at the beginning of January.

If you are even considering selling or buying a home in this wild market, trust Felix Homes. We are the leaders in analyzing and interpreting the latest market data plus our business model allows us to see countless transactions on both the buy-side and sell-side. Give us a call today at 615-354-5731.

Townhomes and Condos

Graph depicting the Nashville real estate market in March 2022 for Townhomes and Condos

The market for Townhomes and Condos is just as hot as the single-family home market in Davidson County. It's being defined by low inventory and extremely high buyer demand.

Moving forward, our monthly market update will no longer breakout townhomes and condos as the analysis is nearly identical to that of the single-family home market above. If you have any specific questions about the local market for townhomes and condos, please feel free to reach out to us by email at contact@felixhomes.com or 615-354-5731.

February 2022

Single Family Homes

Graph depicting the Nashville real estate market in February 2022 for Single Family Homes

If January and February are any indication of how the Nashville real estate market will perform this year, 2022 could be on pace to set new price records.

The total number of homes listed for sale in Davidson County during the month of February was just 1,101 compared to 1,170 in January and a whopping 3,114 compared to February 2021 – a nearly 65% decrease. The number of homes added to the market during the month was 786 or about 23% less than the number of homes added in February 2021.

The low supply of homes for sale and the prospect of rising interest rates are sending buyers into a frenzy. This imbalance in supply and demand is predictably sending home prices higher. In fact, the average sales price of a single-family home during the month of February was $594,187 – 20% higher than the average sales price one year ago. The median sales price in Davidson County was $459,500 or over 25% more than February 2021.

The percent of list price received is a stat we like to pay close attention to because it is a proxy for how competitive the market currently is. In a normal market, we would expect the percent of list price received to be less than 100%. This means that on average, the final sales price of a home will be less than the initial list price. In February 2022, the percent of list price received was 101.8%. This tells us that on average, a home will sell for 1.8% above its list price – although many competitive listings will have a percent of list price received well above this figure.

Sales price is only one variable that comprises an offer. With multiple-offer situations common in today's market, buyers are not only paying well over the list price but they are waiving contingencies to make their offers more attractive. In fact, many of the winning offers we receive on the homes we list have limited contingencies. Whether the buyer is willing to waive the inspection, include a significant appraisal gap, or allow the seller to have a short-term leaseback at no-cost – these are just a few of the variables that a winning offer typically includes.

What's causing this frenzy? There are really three key components:

  • The likelihood that interest rates will rise throughout the year is causing buyers to increase their aggressiveness.
  • The limited inventory of homes for sale is causing a major supply crunch.
  • The demand coming from out of state buyers – many of whom are able to offer higher prices and better terms to sellers.

The 30-year mortgage rate according to Freddie Mac reached a peak of 3.92% in February but has since come down off its highs. While rates will likely rise above 4% throughout the year, we should keep in mind that even 4% is extremely low for a 30-year mortgage by historical standards.

Townhomes and Condos

Graph depicting the Nashville real estate market in February 2022 for Townhomes and Condos

The market for townhomes and condos in Davidson County throughout the month of February remained competitive. The total number of condos and townhomes for sale was just 280 compared to 1,240 in February 2021 – a 77% decrease! There were 246 new listings added during February but many went under contract a day or two after hitting the market.

Similar to the single-family home market, townhomes and condos are typically selling for over their initial list price. The average percent of list price received was 101.8% or 1.8% over the list price.

Prices have risen dramatically with the average sales price of a townhome passing $420,000 in February 2022 – the median price was $346,058.

By all measures, this is a competitive market. The question we have to ask ourselves is when will it start to slow?

January 2022

Single Family Homes

Graph depicting the Nashville real estate market in January 2022 for Single Family Homes

A new year and a fresh start to the Nashville real estate market. So what does the first month of the new year predict for Nashville's housing market in 2022? Unfortunately, it looks like we'll be facing many of the same trends we have for the past two years including low inventory, multiple offer situations, and bidding wars primarily coming as a result of out-of-state buyers.

In January 2022, there were 1,170 single-family homes for sale in Davidson County. A slight increase compared to December 2021 (1,151) but still significantly below the number of homes for sale one year ago in January 2021 (3,146). 721 new listings hit the market throughout January which is 120 more than in December 2021.

Unsurprisingly, prices remain high. In January 2022, the average price for a single-family home in Davidson County was $572,319–a nearly 18% increase compared to one year ago. The median sales price was $429,900.

The percent of list price received which represents the difference between the list price and final sales price was 100.9%. This means that a home listed for $500,000 will end up selling for $504,500 on average. Move-in-ready homes in certain neighborhoods in Nashville can sell for quite a bit more with a few routinely selling for 3%-7% above their list price.

Interest rates are projected to rise over the course of 2022 with sub 3% interest rates likely a thing of the past. According to Freddie Mac, the 30-year rate averaged 3.5% during January. While still low by historic standards, increasing interest rates could potentially help cool the red-hot real estate market as borrowing costs rise.

Townhomes and Condos

Graph depicting the Nashville real estate market in January 2022 for Townhomes and Condos

The market for townhomes and condos during the first month of 2022 remained strong. With just 272 townhomes and condos available for sale throughout the month, it is no wonder prices increased. The average price was $358,126 which represents a nearly 15% increase compared to January 2021. The median sales price was strong too at $309,250 compared to $299,950 in December 2021.

Bidding wars were common among townhome and condo sales in January 2022 with the percent of list price received averaging 100.6%.

December 2021

Single Family Homes

Graph depicting the Nashville real estate market in December 2021 for Single Family Homes

2021 was a year defined by low inventory and the final month of the year brought with it the lowest inventory we've seen yet. Just 1,151 single-family homes were listed for sale in Davidson County during the month of December. This is 59% lower than December 2020 and nearly 400 fewer homes compared to November 2021.

The number of new single-family listings added to the market during December was just 601 explaining why the total number of homes for sale hit a new low.

Demand for housing across the Nashville market is still strong. Like any market defined by low supply and high demand, prices increased. The median sales price for a single-family home in Davidson County in December 2021 was $440,000. For reference, the median sales price just one year ago was $359,900. The average sales price for a home in Davidson County was $538,144 in December 2021.

The percent of list price received which compares the final sales price to the original list price was 100.9%. This means that on average, homes are selling for slightly more than their list price. Bidding wars, especially for desirable "move-in-ready" homes are still prevalent.

According to Freddie Mac, the 30-year mortgage rate ended the year above 3% and has accelerated during the first few weeks of 2022 hitting 3.22%. While rates are still historically low, if this trend continues, it could be the catalyst that causes the market to cool.

What will 2022 hold for the Nashville real estate market? Will 2022 also be defined by low inventory causing the bull market to continue or will rising interest rates cause the market to cool off? If you're interested in buying or selling in 2022, give us a call at 615-354-5731 to discuss the market and get the latest insight on what we're seeing as Nashville's low-commission brokerage.

Townhomes and Condos

Graph depicting the Nashville real estate market in December 2021 for Townhomes and Condos

Similar to the market for single-family homes in Davidson County, the townhome and condo market saw historically low inventory to end the year. Just 317 townhomes and condos were listed for sale in December 2021 compared to 1,156 one year ago. Just 163 new listings were added throughout the month which was a new low.

Interestingly, even with low inventory, we saw the median price for townhomes and condos decrease in December 2021 to $299,950. While still significantly higher than prices a year ago, the median sales price in November 2021 was $322,000. The average price for a townhome in December 2021 was $367,307.

The percent of list price received was just over 100% meaning on average, a townhome will sell for the price it is listed for. Keep in mind that more desirable townhomes will still command a premium over the list price.

November 2021

Single Family Homes

Graph depicting the Nashville real estate market in November 2021 for Single Family Homes

November is historically a period of low inventory as families prepare for the holidays and November 2021 was no different with just 850 new listings added to the market. The total number of single-family homes reached 1,538 which is 53% less than November 2020 (3,294).

The median price of a single-family home in Davidson County was $429,500 which is nearly $55,000 more than the median sales price one year ago. The average sales price rose to $583,545 which represents a new monthly record! The percent of list price received which allows us to compare the initial list price to the final sales price averaged 101.3%. This means that a home listed for $500,000 would end up with a sales price of $506,500 meaning that bidding wars between buyers is still the norm.

Townhomes and Condos

Graph depicting the Nashville real estate market in November 2021 for Townhomes and Condos

The market for townhomes and condos in Davidson County during the month of November remained healthy with 258 new listings being added to the market for a total inventory of 468.

The median sales price was $322,000 which has been steadily increasing throughout the year. In November 2020 for example, the median sales price was just $265,000. I wonder how many of you wish you could go back to the beginning of January to buy more properties? The average sales price for a townhome returned to a more normal price of $385,292 which is significantly below October 2021's average sales price of $462,431. The percent of list price received was 100.1% meaning that the market for townhomes was slightly less competitive than the single-family home market in November.

October 2021

Single Family Homes

Graph depicting the Nashville real estate market in October 2021 for Single Family Homes

Yet another month of historically low supply. October added just 949 new listings to the market in Davidson County, a 35% decrease compared to October 2020. The total number of single family homes for sale in Davidson County was 1,718 compared to 1,770 in September 2021.

The median sales price for a home in Davidson County was $434,950 and the average sales price was a staggering $576,273. The percent of list price received was a healthy 101.1% which means that bidding wars are still the new normal in the Nashville real estate market.

We'll see how the next few months shape up heading into winter but as of now, the housing market shows no signs of slowing down.

Townhomes and Condos

Graph depicting the Nashville real estate market in October 2021 for Townhomes and Condos

In October, there were 322 new townhome and condo listings brought to the market. While this is 25.5% less than October 2020, it pales in comparison to the single-family home market which saw the number of new listings drop 35% compared to a year ago. The total number of townhomes and condos for sale in October was just 532 which represents a nearly 60% decrease compared to October 2020 (1,284).

The median sales price for a townhome in Davidson County reached $314,088 in October 2021 and the average sales price set a new monthly record at $462,431. The percent of list price received is hovering around 100% which means on average, a townhome or condo listed for $300,000 will end up with a sales price of $300,000.

September 2021

Single Family Homes

Graph depicting the Nashville real estate market in September 2021 for Single Family Homes

Is this the "new normal"? September showed no signs of a market slowdown for single-family homes located in Davidson County! There were 1,077 new listings added to the market compared to 1,437 new listings added in September 2020. The total number of homes for sale in Davidson County was 1,770 in September 2021 compared to 1,691 in August 2021 and 3,675 one year ago.

The median sales price for a home in Davidson County was $415,000 in September 2021. This is the third month in a row where the median sales price has declined compared to the month prior. That said, we don't believe this is necessarily a sign that the market is starting to 'slow down'. One year ago in September 2020, the median sales price in Davidson County was just $360,000. The average sales price surpassed $550,000 in September 2021. This is roughly a 20% increase from this time last year (thank you Californians)!

The percent of list price received which is one of the clearest indications of how hot the market currently is came in at 101.6% in September 2021. This means that a home listed for $500,000 would end up selling for $508,000 on average. In a 'normal' market, we would expect the percent of list price received to be slightly less than 100%. For reference, in September 2020 the percent of list price received was 98.8% meaning a home listed for $500,000 would end up selling for $494,000. We've consistently seen the percent of list price received above 100% since April 2021. This indicates that many buyers are paying over the list price due to multiple offer situations (AKA bidding wars).

According to Freddie Mac, the 30-year mortgage rate started the month of September at just 2.87%. Rates steadily rose throughout September breaching the 3% mark. We anticipate rates to hover around 3% for the remainder of the year.

The bottom line–the market for single-family homes in Davidson County remains healthy. There are no current signs of a market slowdown as we head into the winter months. How long can this market continue and is this the new normal for Nashville real estate?

Townhomes and Condos

Graph depicting the Nashville real estate market in September 2021 for Townhomes and Condos

The market for townhomes and condos in Davidson County during the month of September remained fairly consistent with the August numbers.

The number of new listings in September 2021 was 334 compared to 316 in August 2021 and 454 one year ago. The total number of townhome and condo listings in Davidson County during September (539) remains roughly 60% lower than this time last year (1,291).

Prices have stayed relatively constant compared to August 2021. In September 2021, the median sales price for a townhome/condo in Davidson County was $300,000 compared to just over $251,000 one year ago–a 19.2% increase. The average sales price was just under $350,000 compared to roughly $366,000 in August 2021.

The percent of list price received which compares the final sales price to the original list price was a healthy 100.3%. In other words, a condo listed for $300,000 would end up selling for $300,900 on average. For perspective, the percent of list price received in September 2020 was 98.8% meaning a condo listed for $300,000 would sell for $296,400 on average.

The bottom line–the market for condos and townhomes in Davidson County did not change much compared to August 2021. That said, prices are still up significantly from one year ago and the market doesn't show any early indications of slowing down.

August 2021

Single Family Homes

Graph depicting the Nashville real estate market in August 2021 for Single Family Homes

Has the Nashville real estate market hit its peak? In August 2021, there were 1,113 new listings added to the market in Davidson County compared to 1,052 in July 2021. Inventory in August 2021 was still down considerably with only 1,691 single-family homes actively listed compared to 3,752 active listings this time last year, a decrease of nearly 55%.

Do you know what else has decreased since July 2021? Prices. In August 2021, the median sales price for a single-family home in Davidson County was $424,950. While this may seem high compared to the median sales price in August 2020 ($360,000), it's down over $16,000 compared to the median sales price in July 2021 ($441,000). The average sales price for single-family homes in Davidson County has decreased as well compared to July 2021 from $560,236 to $532,233.

The percent of list price received is an important metric we like to follow at Felix Homes because it gives us insight into how competitive the market is. If the percent of list price received is over 100%, then homes are selling for more than they are initially listed for. In August 2021, the percent of list price received was 101.7%. This means that a home listed for $500,000 would end up selling for $508,500 on average. In July 2021, the percent of list price received was 102.5%. While this may not seem like a large difference, it may be an early indication of a slightly less competitive market.

According to Freddie Mac, the 30-year mortgage rate started August at 2.77%. Throughout the month of August, it slowly increased to a high of 2.87%. This time last year, the 30-year rate was slightly higher (2.87%).

What's the bottom line? While it still may be too early to tell if the frenzied Nashville real estate market is ready to cool off, we did see a few leading indicators that may suggest a return to some sort of normalcy in the market. Only time will tell if more inventory will hit the market in Fall and Winter and if the number of people moving to Nashville has finally hit its peak.

Townhomes and Condos

Graph depicting the Nashville real estate market in August 2021 for Townhomes and Condos

August 2021 saw just 319 new condo and townhome listings across Davidson County, down from 448 new listings in August 2020. Total inventory was down as well in August 2021 with just 526 condos and townhomes listed for sale. Compare this to July 2021 (592) and August 2020 (1,330).

Prices for condos and townhomes have remained relatively flat since the previous month with the average costing $366,243. The median sales price during the month of August was $300,000 which was about $8,000 less than July 2021.

The percent of list price received was 100.1% in August 2021 meaning if a condo or townhome was listed for $300,000, it would sell for roughly the same amount on average.

The bottom line is that the condo and townhome market in Davidson County still looks strong. That said, we've noticed in the past that the condo/townhome market trails the single-family home market so it may start to level off in the coming months as well.

July 2021

Single Family Homes

Graph depicting the Nashville real estate market in July 2021 for Single Family Homes

When will more inventory return to the Nashville real estate market? It's anyone's guess at this point. July saw just 1,052 new listings in Davidson County. This represents a 36% decline from the number of new listings added in July 2020 (1,649). The number of pending sales in July 2021 was up 37% compared to one year ago meaning homes are being snapped up as soon as they hit the market.

Who is responsible for buying these homes? The answer may not be what you think. Institutional buyers such as Invitation Homes and American Homes 4 Rent are purchasing single-family homes at a record pace, according to a study conducted by The Real Deal.

The total number of homes for sale in July was 1,636. How does this number compare to this time last year? In July 2020, there were over 3,700 homes listed for sale!

The median sales price in Davidson County was up 24.2% since July 2020 to a record $441,000. Great news for anyone who currently owns a home, however, incredibly frustrating for those looking to buy. Just one month ago, in June, the median sales price was $417,000.

The percent of list price received which is a strong indicator for the likelihood of a bidding war was 102.5% in July 2021. This means that on average, a home listed for $500,000 will end up selling for $512,500. In comparison, the percent of list price received in July 2020 was just 99.0%, meaning that a home listed for $500,000 would sell for $495,000.

Are mortgage rates expected to rise? Not anytime soon. According to Freddie Mac, the 30-year mortgage rate hit a peak at the beginning of April (3.18%). The month of July saw the 30-year rate steadily decline back under 3%, closing out the month at just 2.8%.

The bottom line–if you currently own a home in Davidson County, you are loving this market as you continue to see your home equity rise. If you're looking to purchase a home, especially as a first-time homebuyer with limited cash to put down, this market is your worst nightmare.

Townhomes and Condos

Graph depicting the Nashville real estate market in July 2021 for Townhomes and Condos

The market for townhomes and condos in Davidson County has been slightly more bearable compared to the single-family home market. In July 2021, the Davidson County market added 377 new listings, compared to 465 new listings in July 2020. The number of pending sales was up a staggering 64.4% in July 2021. Similar to the single-family home market, condos and townhomes are being purchased just days after hitting the market.

The total number of townhomes and condos available for sale in July 2021 was 592. This is 54% less than July 2020, however, slightly more than June 2021 (574).

The median price for a condo/townhome in July 2021 was $307,850 which is slightly less than June 2021 ($319,950). That said, the percent of list price received was 100.5%, compared to 99% in July 2020 and 100.3% in June 2021. Yes, even condos and townhomes are selling above their initial list price.

The bottom line–the market for townhomes and condos is slightly less competitive than the single-family home market, but not by much. It's a hot market no matter which way you cut it.

June 2021

Single Family Homes

Graph depicting the Nashville real estate market in June 2021 for Single Family Homes

Is the Nashville real estate market starting to slow? It may be too early to call it. But, the number of new listings added to the market in June 2021 (1,128) did outpace May 2021 (1,065) by nearly 6%. This is the second consecutive month where the number of new listings added to the market was greater than the month prior. That said, the number of new listings being added to the market is still 26.7% less than one year ago in June 2020 (1,565).

The number of new listings added to the market each month is important, however, how did total inventory fare? Total inventory or the number of homes currently for sale has remained constant in Davidson County since May. In June 2021, inventory totaled 1,586 single-family homes for sale while May's inventory was 1,577. While inventory has remained fairly constant month to month, it's still down over 55% compared to this time last year. We are still in a supply crunch folks.

Unsurprisingly, the median home price in Davidson County continued to rise. You can expect to pay $417,495 for a single-family home in Davidson County. Nearly 20% more than what a single-family home would have cost one year ago. The average price of a home in Davidson County is even more staggering at $578,276.

At Felix Homes, we pay close attention to the "percent of list price received" which compares the final sales price to the original list price. If the percent of list price received is higher than 100%, buyers are paying more than the list price for a home on average. This is typically the result of hotly contested bidding wars. In June 2021, the percent of list price received was 102.5% compared to 98.9% in June 2020. This means that if you see a home listed for $400,000, it's likely that the final sales price will be $410,000 or more depending on the level of interest.

How are mortgage rates doing? During the first week of June, the rate for a 30-year mortgage hovered around 3%. Historically low interest rates have fueled a buying frenzy across the country. Rates steadily rose throughout June however the first week of July saw the 30-year mortgage rate drop to 2.9%.

Townhomes and Condos

Graph depicting the Nashville real estate market in June 2021 for Townhomes and Condos

There were 340 new townhome and condo listings added to the market in June 2021. Just 46 fewer new listings than May 2021 (386). Similar to the single-family home market, the number of total active listings is down over 50% compared to this time last year. In June 2021, there were 574 active condo and townhome listings on the market compared to 650 active listings in May 2021.

As with any market where demand outpaces supply, prices will rise. The median sales price of a condo or townhome in Davidson County was $319,950 in June 2021. A nearly 25% increase from June 2020. The average sales price just surpassed $375,000.

The average percent of list price received was 100.3% in June 2021 meaning that condos and townhomes typically result in a final sales price equal to the initial list price.

May 2021

Single Family Homes

Graph depicting the Nashville real estate market in May 2021 for Single Family Homes

Is the Nashville real estate market returning to some sort of normalcy? Perhaps. May was the first month since the beginning of the year where housing inventory was greater than the previous month! In May 2021, there were 1,577 single-family homes available for sale compared to 1,522 in April 2021. Not a huge increase but we'll take it! Keep in mind this is still peanuts compared to the level of inventory in May 2020 which was 3,492. The number of new listings added to the market in May 2021 (1,065) was also higher compared to April 2021 (1,011) which is a great sign for buyers who have been discouraged by intense bidding wars. Part of this increase is likely due to seasonality as May, June, and July are historically the most popular months to list a home. These are also the months when buyer demand is at its greatest.

Prices continued to rise in May with the average sales price of a home in Davidson County surpassing $550,000! This represents a 29.1% increase compared to the average sales price in May 2020 and is $37,025 higher than the average sales price in April 2021 ($514,543). The average number of days on market continues to be historically low. At Felix Homes, our average days on market since the beginning of the year is just 7 days!

Even with the slight increase in inventory, multiple offers and bidding wars are still common. Buyers are increasingly making offers above the list price. In fact, the average percent sales to list ratio in May 2021 was 101.8%. This means that on average, a home with a $500,000 list price will sell for $509,000.

The 30-year mortgage rate was at its highest since January during the first week of April but has since dropped back below 3% in May. Some are expecting rates to rise in the coming months as the Federal Reserve tries to keep inflation under its target of 2%.

Townhomes and Condos

Graph depicting the Nashville real estate market in May 2021 for Townhomes and Condos

The number of townhomes and condos for sale in May 2021 was 650, a 43.7% decrease compared to this time last year (1,154). That said, the number of new listings added in May 2021 was a healthy 386–just 10% less than May 2020.

The market for townhomes and condos has been lagging behind the single-family home market but it's safe to say it's finally caught up. The average price of a townhome in Davidson County in May 2021 was $371,996, a 24.4% increase compared to May 2020. Month over month, the increase is equally as staggering. The average price of a townhome in April 2021 was $315,827!

Bidding wars are just as common in the townhome market as they are for single-family homes. In fact, the average percent sales to list ratio in May 2021 was 100.0%–it's safe to say there are no deals to be had in this market.

April 2021

Single Family Homes

Graph depicting the Nashville real estate market in April 2021 for Single Family Homes

For those who thought the supply crunch in Davidson County couldn't get much worse, guess again. According to Realtracs MLS, just 1,011 new single-family home listings were added to the market in April 2021. This represents a 21.1% decrease from the number of new listings added in April 2020 (1,281). Unsurprisingly, the number of total listings on the market continues to dwindle as fewer new listings replenish the homes that sell every month. There are just 1,522 active listings as of April 2021 compared to 1,544 in March 2021 and 3,251 one year ago.

How are prices responding? The average price of a home in Davidson County broke $500K to $514,543 which is 21.1% higher than this time last year. Bidding wars have become the norm and buyers are waiving contingencies left and right. Hot listings are receiving offers for 5%-10% above their list price. In fact, we recently listed a home for $430,000 which sold just 8 months ago for $399,900. In a matter of 4 days, we received multiple offers and the winning offer was willing to pay $465,000. The average percent of list price received broke 100% in April to 100.8%. This means that on average, a home listed for $400,000 will sell for $403,200. Keep in mind desirable listings will typically command a significant amount over their list price.

Apprisers are having a difficult time in this market. Prices have appreciated so much so quickly that they are finding it hard to select comps that justify a given sales price. This is an issue as most buyers choose to finance the purchase of a home using a mortgage. As a listings agent, it's important to determine the likelihood a deal will close. For example, in a scenario where you receive five offers two of which are waiving the appraisal contingency, it may be worth potentially taking a lower sales price if the buyer is willing to waive the appraisal contingency as opposed to rolling the dice on an offer that is contingent on the appraised value equaling or exceeding the sales price.

It's hard to envision a catalyst that will return some sort of normalcy to this market. Our hypothesis is that the lack of inventory is due to the fact that nobody wants to be a buyer in today's competitive market. Yes, you can sell your home for a record price but unless you are planning to leave the country or rent, you will have to enter the brutal battle of being a buyer in what is turning out to be one of the most competitive housing markets in recent history. One thing is clear, if you are an investor or have an opportunity to sell your home, you likely won't find a better time to capitalize on the market.

30-year mortgage rates hit 3.18% during the first week of April according to Freddie Mac but have since relaxed to below 3% in the subsequent weeks.

Townhomes and Condos

Graph depicting the Nashville real estate market in April 2021 for Townhomes and Condos

The market for townhomes and condos didn't experience nearly the same level of shortage compared to the single-family home market. 377 new listings were added in April 2021 compared to 312 in April 2020 and 394 in March 2021. The number of active listings on the market in April was 687 which represents a 30.1% decrease from April 2020 (983).

The average townhome in Davidson County closed for $315,827 in April which is up 20.9% compared to this time last year. We listed a condo in West End in April for $360,000–a record for the neighborhood. After two days on the market, we received three offers with the winner offering $380,000. An offer so high above the list price can seem suspicious. In this scenario examining the contingencies closely is crucial to ensure your client is protected. Just because a buyer is willing to offer a certain price in the purchase agreement doesn't mean they will necessarily close the deal for that price. Now more than ever, it's necessary to weigh offers that will waive the appraisal contingency or those that are willing to pay a guaranteed dollar amount above the appraised value. In the example of our listing in West End, we negotiated for the buyer to waive their contingency. This means that if the appraisal comes in at $350,000, the buyer will need to contribute an additional $30,000 in cash at closing.

March 2021

Single Family Homes

Graph depicting the Nashville real estate market in January 2021 for Single Family Homes

The supply-side crunch continues in March for single-family homes in Davidson County with just 1,053 new listings added to the market. While this may sound like a lot, it's a 21.8% decrease from March the previous year. Not only are fewer new listings being added to the market but the number of homes that are currently listed are being purchased at a record pace.

In March 2021, there were only 1,544 homes available for sale in Davidson County compared to 3,121 homes in March 2020. A historic 50% decrease that's likely to continue if the number of new listings being added to the market continues to decrease.

Bidding wars are becoming more common and it is not unusual for listing agents to utlize an "offer deadline" which is a date and time that all offers must be turned in by. In March 2021, the average percent of list price received was 99.9% compared to 98.9% in March 2021. This may not seem like a big jump, it means that the average home is selling for its list price. Since this number is an average, it means that a large portion of homes are selling above their list price. In our experience, it is common for some homes to fetch 5%-10% above what they are currently listed at and for there to be 10 or more offers on competitive listings.

What impact is this having on prices? The median sales price in Davidson County in March 2021 was $376,000 compared to $341,000 in March 2020, more than a 10% increase. The median home price in March 2021 was also quite a bit more than February 2021 which was $368,000.

In our experience, appraisers are having a difficult time in this market since home prices have risen so quickly. This is important because if a home doesn't appraise at the sales price, it risks killing the deal unless the buyer and seller are willing to renegotiate the sales price or the buyer is willing to make up the difference in cash.

The 30-year mortgage rate in March breached the 3% threshold. While rates are predicted to continue rise from their January lows, it's likely they will remain historically low. We predict rates to stay within the 3%-3.5% range throughout 2021.

Townhomes and Condos

Graph depicting the Nashville real estate market in March 2021 for Townhomes and Condos The market for townhomes and condos continues to be stable. In fact, the number of new listings added to the market in March 2021 increased by 4.2% to 394 compared to March 2020 (378 new listings).

While new condo/townhome listings are being added to the market at a healthy rate, they are being purchased quickly. The number of condos and townhomes on the market decreased by 25% to just 700 listings in March 2021 compared to March 2020. This is a continuation of the trend we noticed in February.

The number of condos and townhomes on the market is decreasing which is causing prices to increase. In March 2021, the median sales price was $280,608 which represents a 7.8% increase compared to the prior year. While prices haven't increased as much as the single-family home market, it is definitely something to keep an eye on. If the inventory of condos/townhomes continues to decrease, it is likely that prices will rise even faster.

We don't see as many bidding wars when it comes to condos/townhomes compared to the single-family home market. This could be because condos and townhomes are desirable to a smaller demographic whereas there are more potential buyers for single-family homes. The average percent of list price received for a condo/townhome in March 2021 was 99.3%, a healthy number that is just slightly above the March 2020 figure (98.8%).

February 2021

Single Family Homes

Graph depicting the Nashville real estate market in February 2021 for Single Family Homes

The single-family home market for Davidson County extended its shortage of supply in February with only 799 new listings compared to 1,095 new listings in February 2020 and 1,136 new listings in January 2021. Seasonality is definitely playing a role as February isn't a particularly popular time to list a house although the 27% decrease from 2021 compared to 2020 may hint at something else going on.

The inventory of homes for sale has also decreased compared to the prior month with just 1,642 homes available for sale in Davidson County in February 2021 compared to 1,773 in January 2021.

Prices are up compared to February 2020, however, not as much as in January 2021. The median price for a single-family home in Davidson County in February 2021 was $368,000, an 8.3% increase compared to February 2020.

The market is getting more competitive though. Another stat we like to look at is the percent of list price received. This tells us how close the final sales price is to the initial list price. If the percent of list price received is less than 100%, then the final sales price was lower than the initial list price. In February 2021, the average percent of sales price received was 99.6% compared to just 98.4% in February 2020.

The demand side of the equation continues to be strong. 30-year mortgage rates during the first week of February hit 2.73%, up slightly from January (2.65%). There continues to be strong demand for Nashville real estate as out-of-state buyers flock to the city.

Townhomes and Condos

Graph depicting the Nashville real estate market in February 2021 for Condos and Townhomes

The market in Davidson County for townhomes and condos continues to be stable. In February 2021, there were 319 new listings added to the market, a slight decrease from the 322 new listings added to the market in February 2020.

Prices have also remained stable with a median sales price in February 2021 of $275,000, just 6.1% more than the median in February 2020.

The number of condos and townhomes listed for sale dropped by 17% in February 2021 to 733 compared to 883 condos/townhomes available for sale in February 2020. If this trend continues, it will be interesting to see if the median sales price for condos increases at a faster pace.

January 2021

Single Family Homes

Graph depicting the Nashville real estate market in January 2021 for Single Family Homes

2020 was a crazy year for Nashville real estate. As Covid-19 started to shut down parts of the economy in March, 2020, the real estate market was met with a lot of uncertainty. The real estate market got a boost from low interest rates which were allowing buyers to finance the purchases of homes extremely cheaply.

This trend has continued into the new year. The 30-year mortgage rate was 2.65% during the first week of January according to freddiemac.com. Coupled with the ongoing trend that Nashville continues to be a popular choice among homebuyers fleeing California, New York, and Illinois means that prices will inevitably move higher.

Buyer demand is only one side of the coin. The Nashville real estate market is also being impacted by a shortage of homes available for sale. Comparing the number of new listings in January 2021 to January 2020 shows that there was 8.8% fewer new listings added to the market. Even more alarming is the inventory of homes for sale which has decreased by nearly 40% from 2020 to 2021.

Increasing demand and decreasing supply for Nashville homes is creating the perfect storm for rising prices. In January 2020 the median sales price for a home in Davidson County was just under $320,000 whereas the median sales price in 2021 was over 15% higher ($369,450).

Townhomes and Condos

Graph depicting the Nashville real estate market in January 2021 for Townhomes and Condos The real estate market in Davidson County for Townhomes and Condos hasn't been impacted by the same supply-demand imbalance that we've seen in the single-family home market. Looking at the data, there was close to a 50% increase in the number of new listings in January 2021 compared to January 2020. The total inventory of condos and townhomes for sale was only lower by 4.4% in January 2021. Overall, the median sales price was up by 8.4% to $265,165 which is only slightly higher than we would expect in a growing market such as Nashville.

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