Phillip's Blog

In the ongoing effort to keep you, the consumer, supplied with relevant information, this entry focuses again on the recent market numbers for the Greater Nashville Area.

There has been a lot talk in the media lately about what 2008 will look like for home sales. Some say it’s still trending downward with no recovery until 2009, others say we might have seen the worst of it. My opinion (and I’ll flesh that out in a minute) is that in our local market here in Middle Tennessee we have indeed seen the worst of it and this spring is going to be a banner selling season.

The Greater Nashville Association of Realtors^® (GNAR) and the Williamson County Association of Realtors^® (WCAR) has, within the past two days released the market stats for December on what is happening in this area. Keep in mind that the Greater Nashville numbers are comprised of Davidson County and the 5 surrounding counties that make up Nashville as we know it. While the Williamson County numbers are just for, well obviously, Williamson County. Since our company is located in the Cool Springs area of Brentwood, we belong to both associations and track both sets of numbers. With one set of numbers offering a big picture approach and the other focused in on just our local communities here in Williamson County. Normally the numbers track together in overall trends, although Williamson usually sees more dramatic movements on the trend lines simply because it’s a smaller market.

The two charts below track the Median home prices in Greater Nashville and Williamson County. As you can see, the December numbers are looking more normal for this time of year with an upward kick in prices for the month, kind of finishing out the year with a bang, so to speak.

Greater Nashville Home Prices-Dec.pdf
Williamson Co MediumPrice-Dec.pdf

Another set of numbers that we track is the gross number of units closed for both areas, as reflected in these charts. Again the red line is 2007. While the trend has been downward, the steepness of the slope is easing for Greater Nashville and has leveled off for Williamson County – actually the number of closed units was the same for both December and November. Anything other than a rapid decline is considered a positive event when compared to earlier months in 2007.

Greater Nashville Units Sold-Dec.pdf
WmsonCo Units Sold-Dec.pdf

One more set of numbers that is very enlightening is the current inventory level of available homes. Unfortunately this data is only available for the Greater Nashville area. Yes, the red line at the top of the chart is 2007.

Greater Nashville Inventory Comparison-Dec.pdf 

The bad news is that inventory is at an unprecedented level. The good news is that the decline slope has become steeper over the past two months; meaning that (finally!) builders have begun to slow the pace of new construction. It also means that some folks are just holding off on putting their homes on the market until some of this inventory gets absorbed.

What’s the summary on all this information?? While it is undoubtedly still a buyer’s market out there, prices are beginning to stiffen due to reduced inventory levels. This means the “worm is beginning to turn” as they say, with indicators trending toward a more balanced market. Economics being what they are, the market will always correct itself and that is exactly what we are beginning to see. Less product means higher prices, less product means increased competition for available product, and finally the blood bath for sellers is easing somewhat.

However, I don’t think we are out of the woods just yet, so hold up that jump onto the table and shouting for joy. There still is a ton of inventory out there still to be absorbed, and this being the winter season, the quantity of buyers active in the market is seasonally lower. And will continue to be low until spring.

So, while things look like positive trends, it appears we still have a few months of tough market ahead of us. The key to succeeding in this type of market for sellers is focusing on sound fundamentals – condition and price. Not only do you have to represent a good value in the buyer’s eye, you have to stand out in the noise of available inventory and represent exceptional value. For buyers, take all this as notice that the time for being overly picky is rapidly drawing to a close. Take your time to make the correct choice for you, but move on it while the prices are still reasonable. They won’t get much better than they are today.

Hope all this makes sense to you folks. If you want more clarification please don’t hesitate to contact me, I’d be happy to further interpret this information so you can apply it to your specific situation.

As always, keep us in mind for your real estate needs!