There aren’t enough flame emojis on the internet to describe Nashville’s housing market. In 2023, the median home in Davidson County sold for $445,000, which is down just 1% compared to 2022.
Prices show few signs of cooling off. But for those hoping to dip their toes in the home buying waters soon, it helps to know what trends to expect. Put on your floaties, and let’s hear what the local experts predict.
Look out for the ‘burbs
Kevin Wilson, president of Greater Nashville Realtors, said the big story for 2024 will continue to be the rise of suburbs. Though someone’s lifestyle heavily plays a role in where they live, home prices are king when it comes to decision making, and that’s a big factor in making the ‘burbs a desirable choice.
That means areas in Dickson County, the most affordable county surrounding Davidson, could see heavy house buying activity — especially for those who have the ability to do some work from home.
Wilson said median home prices for single-family homes in Dickson County specifically are $100,000 less than those in Davidson County. It’s also worth noting that Dickson had a 3% increase in home sale prices from 2022 to 2023.
Don’t give up on Nashville
For buyers looking for their own slice of Music City, there are still a lot of pockets in Davidson County neighborhoods that will see big investments. Josh Anderson, owner of The Anderson Group, said the Donelson area is a great example of that with its juxtaposition to downtown, room for development, and opportunity for home upgrades.
He says perhaps the biggest corridor in Nashville that hasn’t undergone many updates yet includes a chunk of Nolensville Road, like Glencliff or Woodbine. Values here continue to do well and the area is close to everything, but it might fly under the radar to future home buyers — think: less competition.
Worth it to wait?
Both Wilson and Anderson agreed, from a financial perspective, it’s not beneficial to wait. “What you pay for a property is permanent,” Anderson said. “Your interest rate can be changed in the future if it goes down.”
Interest rates are expected to drop, with Federal Reserve officials indicating a likelihood of interest rates reducing three to four times in 2024. With that comes an increase in competition from home buyers waiting on the sidelines and a rise in median home sale prices.
Pro tip: Wilson predicts that home prices will remain consistent with what they’ve been this past year for ~three more months. This timeline was reached based on a couple of factors, including the first interest rate drop and the spring market, a historically popular time for buyers to begin looking at property.
What about renting?
Oversaturation and competition in the rental market has led to an increase in incentives, whether that be deals like free months or onsite amenities.
To avoid complexes sitting empty, Wilson foresees a calming in Nashville rental prices and a stabilization — but whether they are “affordable” remains an open question. Anderson credits the primary reason for people renting over purchasing to short-term moves and lack of down payments, not monthly costs incurred.
Eyeing places east
Both experts mentioned Wilson County, and Anderson also identified Sumner County as another potential hot spot due to its proximity to the water.
Fun fact: Data even shows that Wilson County edged out Davidson for median home sale prices in 2023 at $456,810 — a 5% increase in prices compared to 2022. That said, Davidson County saw nearly 9,000 more closings.
Wilson and Anderson noted that many outlying areas (like Wilson and Sumner counties) have started to develop their own “main streets,” so folks don’t really need to trek into the city to find every day needs, great restaurants, and cultural activities.
“Belle Meade is always going to be Belle Meade, and Green Hills is always going to be Green Hills... you’ve got a lot of different hotspot areas,” Anderson said. “Some [areas] go in and out of being more popular.”
Let’s chat supply and demand
Wilson said this is the most balanced market the area has had. Normally when demand goes down, which it is in comparison to 2021 and 2022, you would expect housing prices to follow. Yet, this hasn’t happened — a benefit for sellers. According to Anderson, the price reductions you might be seeing online are due to sellers setting listing prices at numbers the home could have sold at two to three years ago.
As it stands now, potential buyers are less likely pay over list price and sellers may be more willing to pay some concessions, like closing costs. However, that’s not to say demand isn’t strong. Nashville ranked No. 7 on the National Association of Realtors’ list of Markets with the Most Pent-Up Housing Demand.
A significant number of individuals are moving to the area, and inventory won’t drastically increase, despite it being higher than it has been. Outside of the city, there is more building going on with more land to build on and housing starts. So, Middle Tennessee as a whole will see some additional inventory in that respect.