We saw Pentatonix at Bridgestone Arena last week - and wow, what a show. A thousand times more exciting than our Real Estate market. I don't even feel bad saying that.
The only caveat to the evening was Kirstin Maldonado performing with a migraine, wearing sunglasses to shield her eyes from the light, while appearing several months pregnant. As a fellow mother, I felt for her discomfort (though she absolutely rocked it). She powered through and none of us would have known she was so uncomfortable had she not mentioned it.
In a similar way, this is our Real Estate market.
Local home prices, sales strength and market performance have out-shined the handicap of high mortgage interest rates and weak motivation among Buyers and Sellers. Our Real Estate market has powered through. And 2024 will end with a winning performance across the country -- but especially here in Greater Nashville, Tennessee.
Predictions! But First...
Everyone loves the predictions I come out with and I'll get to that in a bit! Let's first understand where we are right now.. and that the momentum for 2025 is already building.
In Greater Nashville, which encompasses Davidson and all surrounding counties, we are seeing an increase in pretty much everything -- from prices to Days on Market.
Sure, inventory is up. But so are the number of homes Under Contract (pending sales) and the number of homes Closed, when comparing November 2024 with November 2023.
Of most significance in Greater Nashville is the median price for residential home sales. For the first time, we've hit $500,000 -- breaking a record on home sales prices -- as we approach the finish line of 2024.
Buyers may be the only ones not surprised by this. It's true, affordability is as much of a problem here as anywhere else across the country. The prices of everything keep rising. But it appears that as inventory also rises, so does Buyer interest and interaction (here locally, anyway). The most promising take-away for Buyers here is these most recent numbers show an investment made with housing here in Greater Nashville is continuing to hold its value. And sometimes all Buyers need is a little boost in confidence. Having more choices in the market is a huge help, too!
Am I worried about increasing inventory here locally? NO. In other areas of the country, it's a problem. But we clearly still have enough demand in Greater Nashville to absorb an increase of homes on the market.
In Williamson County, we are NOT seeing an increase in inventory. The demand here continues to put a ceiling on inventory levels, and a floor on prices.
In fact, our 2024 inventory, represented by the
green dot line is rivaling 2023's
blue dot line. We didn't even hit a high this year anywhere near 2023's highs. And I'll bet we start 2025 with lower inventory than we had in 2023 here in Williamson County.
And you may have guessed it... with as impressive as the Greater Nashville price gains are... Williamson County's prices have reacted even more extremely to this downward pressure in inventory.
We hit an all-time high in May 2024 of $1,050,000 median home sales prices here in Williamson County -- which blows away any of the prices we saw during the pandemic and now in this post-pandemic era.
When you look at this graph, it really gives you perspective: Local home prices this year RAN AWAY from any of the previous year's median home prices. Our lowest prices this year barely touched the high of the past two years.
The Challenges
You've probably heard and read a lot this year about the resilience of our markets, including Real Estate. Despite high prices, low inventory and stubborn mortgage interest rates, our local Real Estate market is stronger in 2024 than it was in 2023. Nationwide, there were fewer home sales in 2024, so saying our market is stronger is not a blanket term. But that's not our experience here in Greater Nashville. We continue to be in an area of high demand and our home price appreciation reflects that.
Worried about a CRASH?
This has been a conversation for
years. Thankfully, fewer people are sure that's happening. Can you imagine being one of those people who were so sure of a crash back in 2019 or 2020? Even 2021? In Davidson County alone, there has been a 35% increase in home prices in the past 5 years.
Home Buyers would have missed out of $183,000 in equity since 2019 if their fears kept them from Buying!
More recently, the difference in Median Sales Price over the most recent three Novembers show an increase of $36,000 (a 7% gain) in equity in Nashville/Davidson County-- during a market considered among the toughest in history due to high costs and mortgage interest rates.
I think we were all at least a little worried about the future of Real Estate values in 2022. But those who leaned in and stayed focused on the long-term have something to show for it today.
Soooooo... What's Next?
There is a lot of optimism for Real Estate in 2025. Don't go crazy -- it's not crazy good optimism. Just a nicer picture than what we had in 2024. In fact, a few months ago, the optimism was a lot more glowing, but that's been dialed back pending better news about inflation and the overall economy.
INVENTORY: A further increase of homes on the market is absolutely expected, and will give Buyers more options. And when Buyers have more options, there tends to be more of them. Nationwide, this will be something to keep an eye on. Certain areas will be holding their breath -- too many homes on the market will create downward pressure on pricing, once supply outweighs demand. But here locally, this is not expected.
MORTGAGE INTEREST RATES: It *is* expected that mortgage interest rates will continue to inch down. But when I say "inch," I mean "inch." There are hardly ANY expectations that we will see mortgage interest rates in the 5% range at all in 2025. It'll just likely be a gradual decrease in the 6% bracket for the next 12 months, as shown in this graph compiled from Fannie Mae and Mortgage Bankers Association projections:
HIGHER DEMAND FOR HOUSING: Get this -- One in five current homeowners say they plan to move next year.
(!!) This is according to Bright MLS. 32% of those who plan to sell their homes in 2025 bought their homes in the past five years. These are considered trade-up Buyers, and the demand they'll create doesn't count the amount of Millennials and Gen Z Buyers entering the market as first-time homebuyers.
HIGHER HOME PRICES: At least two of the three points explained above will help keep a floor under our home prices, meaning our prices certainly won't go down. Here in Greater Nashville, I expect home price gains, similar to what we have seen so far in 2024, which is just about perfect. Too much home value gains (as seen during the pandemic) is not healthy, and we've spent the past few years back-peddling on that. If we can continue to hold and slightly gain value year-to-year, that would be ideal. And there are strong indications to believe that'll be the case.
AFFORDABILITY: There is a train of thought out there that a slight increase in home prices combined with a slight decrease in mortgage interest rates will provide a "wash" on affordability. This means monthly mortgage payments may be in the same ballpark next year as they were this year when considering these factors. Hopefully household incomes rise during that time, and if they do, it could improve affordability -- or at the very least, maintain.
There will be A LOT more eyes on the housing market in 2025 -- with higher expectations that we had going into 2024. But this time, it seems that our expectations are more realistic.
I mean.. we all know we're not showing up to a Pentatonix concert at Christmas time. We know the surprises we faced with 2024 housing trends, and we've learned how resilient our Real Estate market is, especially here locally.
But two words for 2025: Cautiously Optimistic.
As with the past couple of abysmal years in Real Estate, there will be winners in 2025 too. Enough to get a standing ovation.
Thinking of moving? Need a plan tailored to your needs? I'd love to help you. I'm a Franklin resident and a Multi-Platinum Award-Winning Williamson County REALTOR ranking in the top 1.5% of agents locally. I am a top producer within Benchmark Realty, the largest brokerage in Tennessee and among the largest in the country. My continuing education includes several designations and my experience keeps me up-to-date with fast-changing market trends. I am a Million-Dollar GUILD Member of the Luxury Home Marketing Institute, my market insights are regularly featured in broadcast media, and my success planted me on the front page of a December 2021 Nashville-area Magazine. But most importantly, I specialize in helping my friends and neighbors buy and sell homes. Why look further when you've got a friend and neighbor who is among the best in the business!
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