NASHVILLE, Tenn. (WKRN) — Spring is one of the busiest seasons for home sales and Nashville continues to see a tightly-clenched seller’s market. As mortgage rates remain on a recent high, paired with historically low levels of inventory, real estate experts say there are still ways for homebuyers to jump into the market.
Sean Black is the co-founder of knock.com, and one of the former founders of Trulia. He warns that the spring and summer real estate market may shape up to be a bit of a rocky season.
“I have good news and bad news for Nashville,” Black said. “The good news is for home sellers is that home price appreciation is actually up, year over year, which is obviously not good for buyers and challenging for buyers, but fortunately for buyers, home inventory is up 12% year over year, so there’s a bit more inventory.”
Although there are more homes on the market compared to last year, Black points out inventory is still down by roughly 20% compared to pre-pandemic levels.
Add to that buyers hesitant to get into the market and current homeowners experiencing what’s called the “lock-in” effect.
“A lot of people who either bought a home or refinanced a home in the last couple years, especially three years ago at 3-4%, feel like they don’t want to upgrade to a 7-plus percent mortgage, and by the way, it’s a lot more expensive to do that and homes have appreciated dramatically since a couple of years ago, especially in Nashville,” Black said.
In this seller’s market, Black said it’s important for buyers to be as competitive as they can when putting in offers. Black’s company offers one way to do that in the Nashville market for anyone without hundreds of thousands of dollars available.
“You can simulate the all-cash offer by using companies like Knock, who will give you the money you need to buy your new home before you even list your old one. We work with your agent and your lender of choice, and it’ll allow you to buy your new home as if you were an all-cash buyer, move in, and then fix your home up and put it in the market and sell it for top dollar,” Black said.
Despite several challenges this spring, it still may be a good time to buy. Black, along with other real estate experts, caution that waiting on rates to drop could mean more competition amongst pent-up demand in Nashville.
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Black also predicts it will take a minimum of five years for the housing supply to catch up to our demand.
“What we tell people is date the rate. You can pay whatever the rate is today and refinance a year from now if rates are 2% lower, but what you won’t be able to do is do anything about the fact that homes will have appreciated 5-plus percent.”
Black said with Nashville’s robust tech presence, his company is currently looking for investors in the area.
