Lawrence Yun is Chief Economist and Senior Vice President of Research at the NATIONAL ASSOCIATION OF REALTORS®.
I think he LOVES Nashville, because, for YEARS, he has been able to bring GOOD news to the Realtors of Middle Tennessee. In fact, he commented that, as he speaks in other cities, he is often asked what the BEST markets are . . . and Nashville and Austin, TX are almost always the first to mind.
Early this week, he participated in the Greater Nashville Realtors NASHONOMICS
I scribbled most of comments and thought I would share the good news about Nashville’s real estate market now and in the relatively near (5 year) projections.
Of course, if you want to discuss any of the comments, feel free to connect with me . . . after all . . . I AM your sole source of ALL things real estate throughout Middle Tennessee. I don’t ALWAYS know the answers, but I CAN do the research – That’s what a real estate sales strategist does.
Here it is – Unfiltered:
- Nashville is still a BARGAIN relative to most other markets around the country
- There was a SURGE of activity as the lock-down wound down
- No worries of 2008 Drama because these sales are paid for with more CASH and “SAFER” mortgages – No risky business
- This is NOT a “BUBBLE”. (PERIOD)
- There are more National Association of Realtors members (@1.4MM) than houses available for sale
- There’s a 3:0 ratio of resale: New construction
- Builder confidence is high, and they are thinking they don’t need Realtors (they’re WRONG)
- Most new construction sales create other resales (Trade up or down Buyers)
- The $1,000,000 and above market supply is 80% above last year
- The days of $100,000 house sales are OVER . . . This begs the question: what about “affordable Housing” for “Middle Class” families?
- 36% of the houses sold above the Listing price (This surprises many of us Realtors . . . This means that 64% of the resales close at or below the listing price.
- The builders have built in the past year more houses than any other year in the past 15 years . . . Most never hit the open market.
- Most of the construction in the Urban core will be Apartments (rental)
- In the period 2007-2021, 14 years of “Underproduction” created a vacuum
- Nashville is in the top 10 cities of number of new construction houses Nationally
- The Fed does not determine the Mortgage rate – which is dictated by the 10 year treasury yield.
- Mortgage rates will likely be @ 3.5% by Christmas 2021 (Still a bargain IMHO)
- Projecting 4% rising prices overall consumer goods and food and appliances
- Used car pricing is RISING due to some difficulty with parts inventories AND “Buyer anxiety”. New car delivery can be delayed and understocked
- Construction materials are scarce and rising in cost – projected to level back to “normal” costs in the next 5 years
- Apartment rents are decelerating because, as jobs disappeared, so did renters (moving back to Mom)
- LOTS of jobs coming into Nashville more than most other cities
- Home sales will be UP – Q1 12% – Q2 42% – Q3 31% – Q4 10%
- Home prices will NOT decline
- The current conditions are projected to be the same through 2026 (5 years of the same)
This is a LOT to digest, but my analysis is that our market is one of the strongest and most resilient markets in the world. The tough reality is that living in the urban core will only be possible for the wealthy . . . everyone else will be pushed to the fringes.
This, then, opens the next discussion . . . How will we bring our infrastructure up to par for the increased population – Roads – Water/Sewer – Power grid – Transportation – Schools – Police and Emergency services
Nashville is now a bonafide MEGALOPOLIS
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