What to Expect from the Nashville Real Estate Market in 2023

It’s no surprise that as the 2023 year kicks off, the housing market will continue to spark interest. The Nashville market will get off easy, based on national comparisons. 

H2: Market Overview

On a national level, Realtor.com estimates a dramatic decrease in home sales in 2023, dropping by 14.1% – the lowest level since 2012. The Nashville market seems to be ironclad, though, and remains in high demand as experts expect just a 3.4% decline in home sales in the local area. Fortunately, you can also pair this decline with increased home prices. Over the next year, the Greater Nashville area will see an approximate 5% increase in home prices. While we can expect a drastic dip in the market on a national level, Nashville continues to surprise us and draw home buyers, despite inflation and media-driven talks of a recession.

H2: What to Expect from Mortgage Rates in 2023

According to the Chief Economist at NAR, Lawrence Yun, mortgage rates are expected to drop to 5.7%, a relief for homebuyers currently challenged by the 7%+ rates of November 2022. The equilibrium is likely to help the real estate playing fields even out and will invite many buyers back. This is a positive sign if you are thinking about buying in 2023, and are looking for some type of signal that things are moving in a more attainable and promising direction.

H2: Inventory in 2023

Inventory is expected to grow based on an increase in mortgage rates and higher costs. According to Realtor.com’s most recent report, we can expect a nearly 23% rise in inventory and a slight decrease in new home starts. What does this mean for home buyers? More options! The increased inventory pool yields less competition and a more relaxed buying process. For homeowners, you should expect your home to stay on the market for slightly longer but with an increased home value to drive motivation.

H2: Is This 2008 All Over Again?

In a word, no. When we compare the housing recession of 2008 to the most recent market year, 2022, we see an almost five-year upward trend in home prices and sales. This created an unattainable market. In 2022, the Feds stepped in to increase mortgage rates and control the risk of a recession. In addition, mortgage companies and banks have become more stringent since the recession, and buyers are highly qualified now.

Overall, for the new year, we can expect to fly by the seat of our pants. The housing market and economy as a whole is at the mercy of current events and political affairs. While economists do not foresee a recession in 2023, rates and increased costs will likely impact buyers’ purchasing power, and sellers will face less interest, despite a higher home value.