Median Home Prices Rise While Home Sales Lessen in July

NASHVILLE, Tenn. (Aug. 8, 2016) – There were 3,705 home closings reported for the month of July, according to figures provided by the Greater Nashville Association of REALTORS®. This represents a 3.3 percent decrease from the 3,832 closings reported for the same period last year. 

     Year-to-date closings for the Greater Nashville area are 22,157. That is an increase of 5.3 percent from the 21,038 closings reported through July 2015. 

     “The slight decline in home sales is not a cause for concern, and is actually a positive for the market,” said GNAR President Denise Creswell. “The furious pace homes have been selling at is not sustainable. The imbalance of supply and demand, combined with the continued gains in price, means inevitably we will reach a point where the market will slow down. This pause may be a sign the market is beginning to slow down and correcting itself until more inventory is available.

     “July marks the first time in seven months that Middle Tennessee home sales have been down year-over-year,” said Creswell. “That aside, our pending home sales numbers remain high, proving homeownership is still important and there are plenty of prospective buyers in the marketplace.”

     A comparison of sales by category for July is:

  July 2015 July 2016
CLOSINGS 3,832 3,705
 Residential 3,224 3,146
 Condominium 435 388
 Multi-Family 23 20
 Farms/Land/Lots 150 151

     There were 3,724 sales pending at the end of July, compared with 3,708 pending sales at this time last year. The average number of days on the market for a single-family home was 54 days.

     The median residential price for a single-family home during July was $267,000 and for a condominium it was $189,986. This compares with last year’s median residential and condominium prices of $234,900 and $161,500, respectively.

    Inventory at the end of July was 12,329, down from 13,728 in July 2015. The current inventory of properties by category, compared to last year, is:

  July 2015 July 2016
INVENTORY 13,728 12,329
 Residential 9,094 8,424
 Condominium 965 798
 Multi-Family 116 95
 Farms/Land/Lots 3,553 3,012

     “Despite a slight decrease in sales, median home prices continue to rise. We’re in the middle of the perfect storm that continues to drive up our median prices,” said Creswell. "Nashville is an incredible place to live, so the demand is high. But our low inventory levels make meeting the demand a challenge. At the end of July, interest rates were hovering around 3.5 percent, which is lower than the 4 percent rate this time last year. All of these factors combined contribute to increased prices.

     “Homeowners appreciate the gain in home prices, as it positively impacts their equity and investment. But for those trying to buy a home, especially those new to the market, these gains are obstacles. The simple fact remains, until we have more inventory available, home prices will continue to rise. Realtors are hopeful the recent legislative change in how condominiums are approved for FHA financing will add more units to the supply and lessen the burden on first-time buyers."

     The Greater Nashville Association of REALTORS® is one of Middle Tennessee’s largest professional trade associations and serves as the primary voice for Nashville-area property owners. REALTOR® is a registered trademark that may be used only by real estate professionals who are members of the National Association of Realtors and subscribe to its strict Code of Ethics.

 

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