The tide has finally turned. After more than a decade of residential real estate markets favoring sellers, we are slowing down and moving into a buyer’s market.
Or are we?
The answer? As we say so often in this business, it all depends. It depends on the neighborhood. It depends on the price band you’re looking at. It depends on who you ask.
One thing is true: the market’s not quite as fast as we’ve been used to over the past decade. We can see it in some of the statistics, and as realtors, we can sorta feel it in our bones. But aside from that, the signals are decidedly mixed.
Slowing into a buyer’s market …
Inventory is Up Current residential listings in all categories are up 28% from June last year.
Days on the Market Up from 36 days in May last year to 57 days this May (67%). Up from 43 days last June to 60 days this year (39%). Things aren’t exactly flying off the shelf these days.
Price reductions The number of active listings with price reductions was up 30% year-over-year in May, and up 24% year-over-year in June. Sellers are wanting prices from a year or two years ago, and they aren’t getting them.
Builders’ Price Reductions The number of new home builders cutting prices rose 29% in April, 34% in May and 37% in June. Good news for buyers.
New-build Mortgage Discounts Buyers of newly built houses are getting bigger rate discounts – averaging .5%. that’s up from .25% two years ago.
Steady as she goes …
Closings Holding Steady Residential closings are up slightly for June and down only slightly for the first half of 2025.
Pending Sales are Up Properties with accepted contracts awaiting closing were up 24% year-over-year in May, and up 35% year-over-year in June. Properties are selling at a fairly crisp pace.
Mortgage Rates Steady The brave souls who predict these things aren’t offering much help to buyers. Averaging several sources, the prediction is a slight decline from the 6.7% range, to just under 6.5%. An improvement, sure, but hardly a bonanza.
Rents Declining Rents are falling for the second year in a row – 2% below where they were in 2023. With mortgage rates holding steady and rents easing, fewer renters will feel the pressure to leave a lease and buy – putting fewer buyers in the market.
New Builds Declining Annual rate of new home starts declined by 8% from January through May of this year. Fewer new houses built leads to tightening of inventory, which eventually disadvantages buyers.
So, Like I said, it’s a mix. And I did mention above that the tone of the market depends on where you look … ?
Buyers Market Neighborhoods Statistically speaking, it’s said that 6 months of inventory is a balanced market, favoring neither seller nor buyer. As it happens, inventory in most Nashville neighborhoods is still a little under that magic 6-month supply. But, several areas are way over-supplied at present. Starting with 37201 Downtown at 25+ months of inventory, followed by 37219 Downtown at 14 months, Midtown/Gulch/WeHo at 13 months, Germantown North at 13 months, Belmont/12 South at 10 months, and 12 South/Oak and East Nashville at 8 months.
So there may be some relative bargains in some pretty pricey neighborhoods.
Which leads to the question I ask and answer every so often: Is this a good time to buy? Or sell? And the answer, as always, is: Yes! If you need or want to buy or sell a house, now is always the best time. Waiting for the market to shift delays realizing your wants and needs, and it could make things worse …