As we move through 2024, the Greater Nashville real estate market witnessed a notable shift last month. Closings in June decreased by 13 percent compared to the same period last year. This decline in home closings across various categories underscores the potential opportunity – an almost forgotten market landscape where buyers have negotiating power.
The market dynamics are further highlighted by a 15 percent increase in active listings compared to June 2023. This increase in inventory, coupled with a 6% rise in median prices for single-family homes to $505,000 and a 4% rise in median prices condominiums to $345,000, suggests a healthy and robust market.
For the second quarter of 2024, overall closings saw a marginal 1 percent decrease compared to the same period in 2023. While residential closings dipped slightly, the condominium category experienced a 5 percent increase, and the multi-family category grew by 32 percent.
Our midyear report reflects a slight decline in year-to-date closings, down by 2 percent compared to the previous year. Despite these decreases, the condominium and multi-family categories have shown resilience, indicating potential areas for growth and investment.
Currently, we are pushing closer to 4 months of available inventory, providing a stronger balance between supply and demand. This is crucial for maintaining market stability and ensuring that buyers have ample options to choose from.
Economic factors continue to play a significant role in shaping our market. The recent decline in the 30-year fixed mortgage rate to 6.89 percent is a positive development. However, Fed Chair Jerome Powell's indication that we likely won't return to the ultralow rates of the past decade suggests that buyers waiting for historically low rates may need to adjust their expectations.
The completion of new apartment units reaching a 50-year high in June is a remarkable milestone, reflecting an oversupply that has led to a halt in rising rents in cities like Nashville. This underscores the importance of continued development to address housing affordability, despite the current slowdown in new multifamily housing starts.
The forecast from Lawrence Yun, Chief Economist at the National Association of Realtors, predicting a rise in existing-home sales in the coming years and an eventual decline to a 6% interest rate, offers a continued hopeful outlook for the future of our market.
