I’ve been meaning to write for awhile, but the market is in such a state that I was not sure where to begin? What is happening nationally, is intensified here in Nashville at a more exacerbated level. You’ve probably already heard, there is an inventory shortage, driving competition among buyers to a level that is unprecedented, which drives up prices. Why? There are many factors at play that have come together at once.
- Lumber costs are (as of this writing) over 200% more than pre-pandemic due to multiple factors such as tariffs on Canadian lumber, supply chain disruption from COVID, and the inability to hire enough workers back to resume the level of production needed.
- Interest rates are still very low, giving buyers the ability to borrow more.
- Nashville and other comparable mid-sized cities are seeing record numbers of people moving into them from dense urban areas, and if they sold their property in those expensive urban markets, they have more money to buy than the average local does. California, New York, and Chicago transplants are the biggest influx to the area.
- Millennials are now entering the single-family home market vs the condo lifestyle many enjoyed in previous years, and they are the largest generation, so another bump of buyers looking for homes.
- Where previously inventory was low mainly because builders couldn’t keep up, and Sellers didn’t want strangers in their home during a pandemic-those who are either not afraid of the virus in their homes or fully vaccinated are still not listing their properties because they are afraid they can’t find anywhere to go. Almost no one will accept a home sale contingency, so if the buyer needs to sell in order to buy – they can be stuck with cash from their sale, but unable to purchase and have to find temporary housing. Many sellers are renting back from their buyers, but lenders will only allow a maximum of 60 days, so that isn’t always enough time. It’s a pickle!
I’ll let the graphs do the rest of the talking…..
So what’s a Buyer or Seller to do?!
If you plan to sell, now would be a good time since the data shows the likelihood of your getting the home sold is high. Your Realtor®️ should have a good network to find ways to cover the gap between selling and buying. I know the combined Parks/Village network has been instrumental in our ability to find solutions for our clients in this market.
If you need to purchase in the area, have a game plan with your Realtor®️ to navigate how best to maximize your chances of winning in multiple offers. There are some creative strategies with financing that can give non-cash buyers an extra edge to help combat the all-cash buyers who are seemingly everywhere. Some homes are receiving 40+ offers and that’s not normal, or healthy, but that’s where we are with no sign of a change in the immediate future. Your agent will be able to explain escalation clauses, appraisal gaps, and all the other intricacies that will be involved in the average transaction in this market.
If you planned to right-size to a condo – that market is much more manageable and the process will be much easier and smoother as the tightest competition is for single family homes vs condos.
In other news…..
Scammers are getting better and better with their believability and NES is the latest one going around. Be careful and never give any info over the phone, and verify any questions you may have about your account with the utility directly.
We went to a restaurant! We needed a break from the cooking marathon, and it was a beautiful sunny Spring evening so we snagged a spot on the patio of Locust in 12 South – I can’t recommend it enough!
Foodie friends will remember chef Trevor Moran as the second chef at the Catbird Seat – approximately 6 years ago I believe? Since then he has traveled, apprenticed, set up pop-ups, and has been ramping up to open this perfect spot. The beauty of it is with such a small menu, order one of everything and you won’t be disappointed.
That’s a wrap..and I miss seeing so many of you and hope to change that VERY soon!
Until next time!