The Nashville TN Real Estate market has entered a sustainable period of improving conditions,” Pro Teck Valuations CEO Tom O’Grady says in the company’s most recent Home Value Forecast.
Pointing to “very low mortgage rates, stable to rising home prices, declining unemployment, declining housing inventories and a strong rental market,” O’Grady says housing is in a good position to continue growth. Those positive trends should lead to growth in the overall economy, he adds.
“As real estate has historically been one of the most important leading indicators of economic activity, this has positive implications for the economy,” he says in the report. “This is particularly true for the new home market. Even though new homes represent only a small percentage of the overall housing market, they have a disproportionate effect on the economy since data shows that on average, three new jobs are created for a year for every new home built.”
Each of the company’s forecasts picks a housing trend and studies its influence on the market. This particular update shines a spotlight on months of remaining inventory (MRI) of new homes listed for sale and examines how that statistic affects median single family home price changes. The report also examines why there has been a divergence between new and existing home prices in the recent down-cycle.
According to recent data, the inventory of new homes for sale has fallen dramatically since 2008 to 4.5 months, closing in on its lowest level in 50 years
“The primary reason for the low months of remaining inventory for new single family homes is the historically low number of new homes for sale,” O’Grady writes. “In recent years, new housing supply has been running at the lowest levels since the 1960’s due to the slow down in new home construction, the size of homes being built, and the complicated process for selling/buying distressed properties.”
The drop in MRI is expected to be a blessing for new home prices, however. Data going back to 1972 shows an inverse correlation between changes in median price on new single family homes and changes in MRI.
In short, whenever MRI starts to drop, the median price starts to spike a year or two later.
With new housing supply at its lowest level in almost 50 years, MRI will continue its steady decline, leading to another likely pickup in prices........You can view homes by price point in the Middle TN Real Estate Market here or do your own customized search in Middle Tennessee County in which you are searching for
Joseph Goodman *ABR*GRI*SRES*
The Goodman Group
C21 WMRA
615-444-7100 office
615-476-2953 direct
thegoodmangroup@me.com email
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