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What's Going On With The Nashville Real Estate Market?

Tyler Forte

Apr 22nd 2021

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.

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%.

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.

So why isn't the market for townhomes and condos as crazy as the market for single-family homes? Part of the reason may be due to who is moving to Nashville. Generally speaking, condos are less expensive, smaller, and have fewer bedrooms compared to single-family homes. If families are primarily moving to Nashville, then it makes sense why there is increased demand for single-family homes compared to condos. Keep in mind that condos and townhomes also haven't experienced such a large decrease in new listings which means that the supply side of the condo market is healthy.