Dec 9, 2023 - Real Estate

Where Nashville's housing market stands heading into 2024

Data: Redfin; Chart: Alice Feng and Tory Lysik/Axios Visuals

Two-decade-high mortgage rates and an inventory crunch shaped Nashville's 2023 real estate market.

Why it matters: A year that saw record-low housing affordability is coming to an end.

By the numbers: Inventory has climbed each month in 2023, but is down roughly 6% year-over-year, per Redfin.

  • Home sales are down a whopping 35% from last year, and homes are sitting longer, too. The median time on the market was 54 days in October and peaked at 77 days in February.
  • Home prices moderated in 2023, up 7% from January to October and up less than 1% from October 2022 to 2023.

What they're saying: "While we still aren't at inventory levels that would suggest that we have entered a balanced market, we are closer than we have been in many years," Nashville agent Brad Copeland says.

The big picture: Nashville buyers faced an expensive market, and sellers had to make price adjustments to close a deal. "Many entered the market not realizing that inventories were increasing and the buyer pool was shrinking and becoming more selective," Copeland says.

Yes, but: If mortgage rates fall, "buyers waiting on the sidelines will come rushing back in 2024," Copeland says.

Zoom out: U.S. home sales have cratered as many homeowners clamp down on their lower mortgage rates.

  • "If there's nothing out there for me to buy, why would I sell? We are all kind of stuck in that paradigm right now," chief economist Matthew Gardner at Windermere Real Estate said at a November conference.

What we're watching: Mortgage rates would need to slide significantly to loosen homeowners' golden handcuffs and boost listing activity, real estate experts say.

  • America's housing shortage is particularly concerning for the wave of younger millennials and Gen Zers in the homebuying pipeline, Gardner said.
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