How do the latest numbers from our Nashville market compare to where we were last year?
In Davidson County, the number of home sales decreased by 6.5% from June 2016 to June 2017. This isn’t unusual considering the lack of inventory we’ve been suffering with this entire season, but it’s still a number to keep in mind.
Home values, on the other hand, increased 8.1%. For the last couple years, I’ve been reporting year-over-year home value increases of 10% or more. 10% is a number we’ve been running with for a long time now, so it’s not strange that it’s starting to slow down.
This brings me to my predictions for the rest of 2017. There are a couple of things at play that I want to talk about.
The first is interest rates. Two weeks ago, the Federal Reserve raised interest rates by 0.25%. We haven’t seen a big response to that as far as mortgage rates go, but I expect we’ll slowly start to see an effect there. We’ve been anticipating higher interest rates for a long time, and the fact that they’ve been held abnormally low has stimulated the economy. But, it’s time for the Fed to ease off of that. Interest rates have hovered in the low 4% range, and I expect that to creep up a bit.
I don’t think this will have a big detriment on real estate sales in the Nashville area. We’re seeing a little bit of a slowdown, but that’s also been anticipated for awhile. It’s not a drastic drop, and it varies wildly from area to area. If you list and buy a home in Hendersonville, it will be a completely different experience than buying or selling in Mount Juliet.
This is the nature of being in the Nashville real estate market, but I do expect sales to flatten slightly for the rest of this year. We’ve seen big peaks and have been reporting 10% increases for a long time now, so it seems reasonable and normal to see lower escalations.
If you have any questions about what’s happening in your specific neighborhood or are thinking about buying or selling a home in the Nashville marketplace, feel free to email me. I’d be happy to speak with you.