With spring just around the corner, we're beginning to see signs of the "Spring Market." Typically this means an uptick in real estate activities. Statistically, though, this year will look different from the past two years due to the changing economic conditions. And yet, Nashville remains a strong market for buyers and sellers! Let’s see what we mean by that.
With the recent banking unrest, the Fed found itself in a difficult situation for their March meeting this week. If they chose to raise rates again it could put more pressure on the banking industry. On the other hand, if they chose not to raise the rates they could be slowing down the progress made from their aggressive inflation-fighting maneuvers. Ultimately they still decided to raise rates .25%. While the Fed's decision doesn't tie directly to mortgage rates, it certainly affects them.
In November of 2022, interest rates hit their peak at over 7%. Since then they have been fluctuating up and down in the 6's. These rates may seem high to those who were able to secure mortgages when in the 3's; however 6% is still historically a strong rate. Of course, 6% can affect affordability for some buyers, leaving them hoping that prices will adjust downward. While we have seen some leveling off, or normalizing of prices, it is unlikely that we will see lower home prices here in Nashville. And it is also unlikely that current homeowners will see any depreciations in their residence or other real estate. This is because Nashville continues to have an inventory issue. The number of new builds in Nashville is still not keeping up with demand. And with the recent bank failures, banks may impose greater lending restrictions (that’s another topic to revisit). In addition, the overall flux of the economy could spur some builders to slow production.
And here in Nashville, we continue to see an influx of new people and businesses, meaning inventory will continue to be an issue. This doesn't mean buyers will see a market like last year where everything flies off the shelf as soon as it hits the market. Quite the opposite, buyers are now able to negotiate a bit more because the market in many ways has reached a more balanced state. Of course, this varies at different price points and neighborhoods. And a well-priced home in top condition in most areas WILL fly off the shelf. Clear as mud right?
The articles below take a deeper dive into the the economic movements in our market and all of us here at Kyne Property Group are staying abreast of these and how they impact your real estate investments. We are always here to discuss any questions you have about the market or your property. Give us a call anytime. We love to discuss this and always want to help you make the best possible decision whatever that may be!
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