Real estate exec: Nashville housing market is ‘stabilizing.’ Here’s what that means. – Nashville Business Journal
August 2, 2022
Our CEO, Christie Wilson, was recently interviewed by the Nashville Business Journal on the stabilization of the Nashville housing market. Find the full interview below and at this link for NBJ readers.
Real Estate exec: Nashville housing market is ‘stabilizing.’ Here’s what that means.
By Ian Bradley – Reporter, Nashville Business Journal
August 1, 2022
The coronavirus pandemic fueled the fire already burning through Nashville’s housing market, with owners regularly receiving multiple offers well above asking price.
The market appears to be stabilizing though, as inflation, rising interest rates and fears of a recession have reduced the number of buyers. A recent study by Greater Nashville Realtors found sales have slowed — there were 4,257 sales in June, down 8% compared to June 2021. Inventory in Middle Tennessee increased to 7,370, the highest it’s been in recent months but still an underwhelming number for the region.
Christie Wilson, the President and CEO of The Wilson Group Real Estate Services, sat down with the Business Journal to discuss what changes she and her team are seeing on the ground in Nashville.
Has Nashville’s housing market slowed in recent months?
The past two months we’ve been in the normal summer doldrums, for lack of a better word. It’s a historically normal slowdown. Typically after Labor Day things ratchet back up. I think we all felt in mid-May … [the market] wasn’t like hitting the brakes but the foot came off the gas. Between the rising interest rates and inflation, gas prices, it felt like everything converged at one time and really gave people a reason to pause. That lasted about a month and then it felt like a normal summer in Nashville, pre-pandemic.
So it’s not like in the past, where you put out a “coming on the market” sign and the owners immediately start getting offers.
I’m calling the last two years a vortex because it feels like a tornado funnel, what we went through. I think the market is stabilizing, which is a real positive for the entire marketplace. Our previous pace was not sustainable, we all know that. Now buyers have an opportunity to actually take maybe 24 hours to think about buying. Very few people are waiving inspections, but they’re still doing purchases pending a satisfactory inspection.
Are you still seeing homes go well above asking price?
It depends on price points, but I feel like, let’s say a $600,000 house, priced accurately it can generate multiple offers. It’s not necessarily happening in the first two hours on the market, it’s maybe after a full weekend. The biggest phenomenon, even pre-pandemic, something could be on the market for 30, 60, 90 days with no activity, and then out of nowhere, two or three offers. I’ve never known why that happens, how that happens, but it’s something that we’re starting to see happen again. “Oh my gosh, it’s been on the market for 10 days” — which seems like a really long time right now, and then you get three offers in two days. We’re figuring it out as we go.
Are sellers adjusting to the new pace or do people still think they just have to list a home and wait for the offers?
It depends on the seller. Some sellers are very aware of what’s going on, they’re paying attention and they understand. Other sellers … I was just talking to a seller, she was throwing out values for what she thinks her home should go for, but she’s talking about selling next year. It’s like, “Maybe? Maybe your head’s a little in the clouds.”
What about increased neighborhood values? If someone saw three of their neighbors’ homes go for well over asking price, they’ve got a strong case for thinking they’ve got an opportunity?
I don’t see the market really coming down. I think the last two years it’s appreciated 35% to 50%. I feel like those prices are there [to stay.] What we struggle with as Realtors is when someone sees a house sell for let’s say $700,000, most of them say, “Well, my house is better than that,” and sit back and celebrate. It’s having that conversation and helping people understand what the true data says. You can’t just look at Zillow. You need a Realtor who can really go deep on that data and explain, “I don’t have a crystal ball but the probability of your home selling for that much is not high.”
In the past three months, the average days on market was five days. From the same time period in 2019, the average days on market was 16 days, which is still a very, very short time to be on the market. So your seller now has a home that’s on the market for two or three weeks, the sky’s not falling. But if you price it right, you’re still going to sell. You just have to really figure out what the pricing is and not overshoot it. And that’s the conversation because there are still those sellers who want to overshoot, there always has been.
Do you think it’s still a seller’s market?
It’s still a seller’s market. If you’re on the market for less than 30 days, it’s a seller’s market. It’s going to probably take a year for people to get out of their heads that 2020 to 2022 was an anomaly in Middle Tennessee real estate, with all the folks moving here. People are still moving here but it’s not that same deluge.
Recession is obviously a big concern but I think a lot of people, especially young people, equate that with a housing market crash, because of 2008.
My agents who are say 35 and under correlate a recession to a real estate crash and nothing could be further from the truth. We are constantly educating what a recession is and what a real estate crash is. We’ve only had like three or four severe real estate downturns, 2008 probably being the worst ever, and numerous recessions.
That’s my favorite part of my job right now, educating agents to be smart and also to elevate the professionalism of the industry. So what happens, whether it’s our two-year vortex or if the tech market gets good, a lot of people go into real estate and they think it’s easy money. It’s not easy. I mean, most people are out of business within the first year to two. You have to bring so much knowledge to the table and you always have. It will be very interesting to see what the rest of the year looks like, as we’re going to have a little bit more inventory, but it’s just not going to be that crazy.