For years, Nashville and the surrounding neighborhoods have been featured on many housing lists as one of the hottest and fastest-growing markets. 2020 is no exception. In a recent poll, Nashville was ranked number 4 out of a list of 25 large real estate markets across the nation. Meaning, if you are looking to buy a home, Middle Tennessee will have a lot of options.
If you’re buying a new home this year, we’ve rounded up some trends you can expect to see in the Nashville 2020 real estate market.
Home Prices will Increase in 2020
Whether you are buying or selling, understanding market value is crucial. Experts agree that the pricing for homes will increase, much as they have done for the past few years. This trend is mostly a result of limited inventory and high demand. Many construction companies are focusing on bigger budget projects that will see a higher return on investment. For buyers who are looking for entry-level homes, they might be a bit fewer and far between.
Who it affects:
Ultimately, buyers will feel it the most. Sellers need to be aware as it can impact the negotiating process and might have an effect on how many interested buyers come through. As a buyer, you need to set a realistic budget and do some market research on available loan options.
2018 housing market grew at an average of 5%, and in 2019 it slowed to 3.3%. The good news is, while the pricing will increase in 2020, it’s estimated to grow even slower at 2.8%. If you’re buying a home, have between 10%-15% of the downpayment to reduce monthly mortgage costs. For a home that’s even more affordable, consider expanding your search to other areas of Middle Tennessee.
Mortgage Rates are Expected to Drop
If you’ve never bought a home before, it’s good to note that you can expect the mortgage rate for 2020 to go down. In fact, in 2019, many mortgages rates were already declining. However, we can expect the trend possible to dip below 4% this year. That’s almost a 1% difference year over year.
Who it affects:
Both buyers and sellers. The good news for sellers is that the lower mortgage rate will mean the increased prices might not dampen plans to purchase a new home. However, with affordable interest rates out there, there might be more competition on the market. If you are a seller, this means you might get a higher offer on your listing.
While the mortgage rates are low now, that doesn’t mean they will stay low forever. Trade wars or tariffs impact pricing. Find a trusted title company or real estate agent with experience in the Middle Tennessee housing market who can help you make an informed decision.
Millennials will be the Biggest Buying Group
In a recent article for Forbes, it was stated: “Millennials rank homeownership as one of their top goals in life—higher than even marrying or having kids—and with interest rates low and incomes up, it’s the right time to buy a home for many.” In September of 2019, 46% of mortgages were purchased by Millennials, growing 3% from 2018. When looking at the data, Baby Boomers and Gen X showed a declined activity.
Who it affects:
Millennial buyers are mostly affected by this as the Baby Boomer generation owns many homes. Despite past trends, Boomers are deciding to “age in place,” which means more homes stay off the market. To put that into perspective, Forbes said, “if today’s older adults—those born between 1931 and 1959—behaved like earlier generations, then an additional 1.6 million homes would have hit the market by the end of the last year.”
When you’re house hunting, know your audience, and get savvy. Nashville couple Abby and John told Davy Ramsey how they decided to get personal and include a letter to the seller when they made an offer. Abby told Dave Ramsey, “The best thing you can do is to include in the letter things you love about their house. If they have a deck or screened-in porch, tell them how you envision using the space. We did that, and the sellers accepted our offer—out of multiple offers—within 24 hours.”
Middle Tennessee Real Estate Market
Looking for a bit more local data? We’ve got you covered. Local news station News 4 put together this information when it comes to real estate trends in Nashville 2020:
- 59% of panelists expect home values to grow faster than their expected national rate (2.8%).
- 31% of panelists expect home values to grow slower than they do nationally
- 10% of panelists expect home values to grow about the same as they do nationally.
Getting Prepared: Buying a home in the Nashville area
Owning a home is a valuable asset. And, with the market trends looking favorable in 2020, homebuyers can get savvy by surrounding themselves with professionals. First, get yourself a trusted real estate agent. They’ll know the ins and outs of the market and have insight and recommendations as to what Nashville neighborhoods would suit your budget.
Second, find a trusted title and escrow company. Once the mortgage and offer are in motion, you want to have a smooth transition during the closing process. An established title company can help. Title companies like Hyde Park Title & Escrow have been assisting buyers and sellers in Middle Tennessee to perform a title search, obtain title insurance, and help with escrow and other real estate services.
Choosing a Hyde Park Title & Escrow ensures outstanding attention to detail. With a market this favorable and tight, you can’t go wrong with next-level service that will ensure you get the home of your dreams.