…$10,000 over asking price… and we didn’t win the bid…

What a week! In my decade of selling real estate, I’m not sure I’ve ever seen a market quite like this. The spring market is already buzzing all over town, but nothing is sizzling quite like East Nashville. Home to hipsters, hippies and yuppies alike, it seems that everyone wants to be in on the side of the river that the Titans call home.

The problem is low inventory. Couple that with the most vibrant market we’ve seen in years and you end up with the most frenzied market I have ever seen. Check out the screenshot my friend Steve pulled from the MLS:

 YELLOW = UNDER CONTRACT

It isn’t just the affordable market where this is happening out east. This is also happening with just about everything priced under $450,000 – and all the way up into Inglewood. There was an open house today south of Shelby and I know for a fact that at least six offers were presented to the listing agent. Welcome to crazy town.

The madness doesn’t stop in East Nashville. Other markets like 12 South, Sylvan Park, Crieve Hall, and West Meade are experiencing similar housing shortages. Homes that look good and are priced appropriately will fly off the shelves in 72 hours or less. [update: I just stumbled across this old article. Now it’s 2015 and the market is like this literally everywhere. Woodbine, Donelson, Antioch, Madison, Whispering Hills… they are all experiencing booms.] 

What’s Driving The Madness?

Good question. It’s not just Nashville. I have Realtor friends in Chattanooga, Charlotte, Atlanta, Phoenix, and Ann Arbor that are all experiencing the same thing. A recent article in the NYTimes confirms the craze.

Things always pick up in spring. At least they do in the south. But normally they market isn’t really swinging until April. Sellers are remiss to list their homes before the grass turns green. But all the fence-sitters that have been waiting on the sidelines through the recession have been driven into the market because of raising interest rates. Some economists are estimating that rates could rise as much as a full point over the next six months.

Stolen from my agent friend Wendy Monday.

Should I List My House?

Well that depends. Are you prepared to move quickly? Can you still qualify for a loan on a new home in this tougher lending environment? Do you want to move up/down in home size? If you said yes to these questions, then absolutely, sell your home now. You will benefit from today’s low interest rates. The pitfall? No one will accept a home-sale contingency right now. Your current place needs to be firmly under contract before you start looking for a replacement home.

Do you have little or no equity? You may benefit from waiting a little while. The current pace of homes is bound to drive prices up. This could help your situation. It could help you avoid a short sale. Just be aware, that when you do eventually sell, your money won’t go as far toward buying a replacement home (see chart above).

Do you have a lot of deferred maintenance? You may also benefit by waiting. The FHA and VA are extra tough on home quality and condition right now. About 40% of the Nashville buying public currently utilize these types of loans. If you wait, guidelines could loosen as more mortgage products return to the market. There is a big need for low-downpayment loans that aren’t federally backed.

I Have A Condo…

If you have a condo where the owner-occupancy ratios have gotten out of whack, well, things haven’t changed. It is still incredibly hard to finance a unit in a condo development that is considered non-warrantable by Fannie/Freddie and FHA. That being said, the market is incredibly strong for urban properties right now.  Even is some have trouble getting a loan, you should still be able to sell.

Good luck out there. If you need a good agent to guide you through the market, I’d love to apply for the job 😉