Nashville Surprises the US by Maintaining a Thriving Housing Market During the Pandemic
Given the current state of the country and the rise of unemployment – over 36 million people had recently filed as of mid-May – it’s been assumed that the real estate market would begin plummeting. With some edge cases, that has been the consensus throughout the states, although Nashville has shocked the U.S. by maintaining a thriving housing market throughout the pandemic. Despite the fact that home sales dropped around 18% nationally in April, Nashville realtor Craig Edwards says they can’t even keep up with the demand, “If it goes on the market, it goes away.”
Nashville may just be leading the way for the country when it comes to getting the housing market back on its feet. As Edwards explains, the demand in Music City is much greater than the supply, which now seems to be the case throughout the country. When COVID-19 stirred stay at home orders, new homes weren’t on anyone’s radar – keeping their own was the only thing on their minds. While mortgage rates are at an all-time low – the 30-year fixed-rate mortgage falling to 3.47% – that doesn’t weed out the other challenges for those eyeing a new home. Considering the economic turbulence of the pandemic, lenders are being extra meticulous when checking borrower’s finances and even requiring higher credit scores and larger down payments.
We’re entering new territory in the housing market as we work our way through the pandemic, and Nashville is clearly a driving force. As opposed to the housing market crash 0f 2008, which the Case–Shiller home price index reported the biggest price drop in its history at 18.2% in just three months, the current state of the housing market is more at a halt than anything else. The national demand and shortage of homes have kept prices high and encouraged bidding wars, especially as we start to see businesses reopen across the country. While April saw a plummet in home sales, the median price for a home has in fact increased 7% from this time last year. An agent in Colorado Springs, Colsie Searcy, confidently expresses “We’re still seeing a huge sellers’ market.”
What we’re beginning to see in the real estate market across the U.S as citizens redefine the new “normal,” we’ve been seeing in Nashville from the get-go. In Williamson County, for example, the average time a home stays on the market is 38 days, and that’s including some more expensive homes that typically don’t sell as quickly. Edwards goes on to say that homes falling beneath $350,000 likely won’t be on the market for more than one week. Even prior to the pandemic, back in 2018, Zillow reported that most homes stay on the market for an average of 65 to 93 days, from listing to closing. So what has Nashville been doing that other cities have not?
While Nashville’s rise in popularity and “hot” housing market earlier in the year couldn’t have hurt, real estate professionals simply have a lot of deals under contract right now. As families are being forced to move, agents are doing their best to quickly close with locked-in interest rates. A Parks Real Estate agent, Bobby Smith, says on a mass scale, his business hasn’t really slowed down. As Smith says, “Real estate operates in 45-60 day windows, so what’s happening now will indicate the health of the local market two months from now.” With this timeline, it’s only a matter of weeks before we see a clearer glimpse of the local market.
Even with maneuvering around virus fears through video chat and conference calls, agents in Middle Tennessee have barely slowed down. In April alone, there were 929 closings in Davidson County. Joi Sherrill of eXp Realty pursued seven home showings in a few weeks, only having to cancel one. Considering the issued stay at home orders, many residents rushed to family and/or other homes, leaving their houses vacant, which made it all the easier and safer to show clients. With that being said, there are still roadblocks making the homebuying process more difficult than usual. A Nashville local Sarah Seidel, for example, was in the midst of buying her first home when not only did the coronavirus pandemic hit, but the city’s tornado in early March did as well. While many may have thrown the dream of homeownership under the rug considering the series of devastating events, Seidel managed to move into her townhome in early April with the help of her realtor and builder – Red Seal Homes. She is not alone, as many other homebuyers in the area pushed through concerns and obstacles in order to close on their home. Red Seal Homes shares that they were planning to sell their fourth home by the end of April, which the manager explains is normal for them. The manager, Becca Cunningham, says, “We haven’t lost any deals. Not one. The majority of the population wants to believe that in six or 10 months this will all be behind us.” Another local realtor with Parks Realty, Lisa Barrett, claims, “I’ve never been this busy as a sellers agent, and I’m very busy with people wanting to purchase. It’s the fact that people are still buying.”
With the increased attention when it comes to reviewing borrower’s finances, some real estate deals are bound to fizzle out, but overall, this region doesn’t have to face many challenges that other cities/states do. Nashville has been organically growing with a steady stream of newcomers moving to the city for quite some time now. Between the rising popularity and flourishing job opportunities, this city is thriving and booming real estate follows.
It’s likely that those living in metropolises – such as New York City and San Francisco – are beginning to question their high expenses, considering they’re working from home for the foreseeable future. When we chip away the conveniences of a large city, we’re left with big bills and not much else, and some residents don’t care to wait and see the result in months to come. This push will presumably attract new people to Nashville creating some more demand. As Edwards says, “The inventory is so low, but Nashville is still growing through all of this which really has kept that market afloat.”
In addition to the record low-interest rates that many are taking advantage of, homes are still appreciating by around three or four percent in the area, which, with all things considered, is very promising. Of course, there have been extraneous circumstances impacting the housing market and estimated projections. But Nashville was the only market analyzed in which no panelists voiced expectations that home values would decrease in the year 2020, and 59% of panelists expected Nashville’s home values to appreciate faster than their anticipated national rate of 2.8%. While other factors have played a part in these projections, they seem to be holding up. Edward, along with other analysts in the field, believes the housing market could skirt the current recession. As Logan Mohtashami, of HousingWire, explains, “The housing market is strong enough to handle a short term hit to global demand.” Shelly Hudson, a realtor with EXIT Real Estate Solutions, has been working with multiple new clients moving to Nashville from stats such as Chicago and Michigan, and as she says, “People still want to come to Tennessee.”