Holidays, travel, weather, and the end of the calendar year often impact December housing sales. 2023 was an unusual year for the Nashville housing market. Mortgage interest rates above 7% led to fewer active Buyers and to increased days on market for Sellers. Comparing December 2023 to December 2022 is a good way to make sense of our current market as we begin 2024. Surprisingly, we may have a brighter outlook than expected with the late December decrease in interest rates and increase in pending sales.
Insights
- Average Days on Market increased by 8.7% (4 days).
- Median Home Price remained the same at $470,000.
- Median Condo Price decreased by 3.41% ($12,000).
- Active Inventory increased by 6.37% (523 properties). This is across all classes: homes, condos, multi-families, commercial, farms/lots/land.
- Pending sales increased by 16.55% (242).
- Properties sold or closings decreased by 4.09% (105).
Nashville Housing Market
With a 4.09% decrease in closings and a 6.37% increase in active inventory, we ended December with a 10.91% increase in supply. In December 2022 we had a 3.19 month supply. In December 2023 we had a 3.54 month supply. Those numbers don’t sound too different, but a month’s supply has a huge impact on how the market functions. We’re inching towards a balanced market, yet still in a Seller’s Market.
Closed home prices do not reflect concessions such as closing cost credits, rate buy-downs, or increased repairs provided by Sellers. These are all much more common in our current market. If they could be seen in closed home data, then I would expect them to reflect lower net prices to Sellers. While we’re still in a Seller’s Market, actual Buyers are experiencing a more balanced market.
Condominium Prices
One cause for the decrease in median price for condominiums may be more rental properties going up for sale than is typical. Increased construction of new apartment buildings has brought competition to the rental market. Accordingly, rental prices have gone down. Also, with inflation high and economic pressure, some investors need to liquidate parts of their portfolios. Subsequently, more rental properties have been sold. For the Nashville condo market, this has led to increases in inventory of older units.
Optimism for 2024
Sellers’ reactions to the market and Buyers’ reactions to lower interest rates combined to bring about an increase in properties under contract. As days on market increase, Sellers often lower their prices. Also, observing a shifting market, many Sellers price their properties competitively so that they can lower their days on market and sell with less concessions. Add to that, for the first time since July 2023, the 30 year interest rate dropped below 7% in December. All of this likely contributed to these great numbers for properties under contract. Pending sales are the bright spot in the Nashville housing market outlook. With a December increase of 16.55%, the outlook for January closings is strong.
Let’s talk about your market.
Real estate is local, and I would love to research and talk with you about your neighborhood. Call me at 615-268-0319 or complete this form, and I will get started.