The general outlook and forecast for the Nashville, Tennessee housing market in 2023 – 2024 mirrors those for other metro areas across the country. For the rest of this year and into next, real estate predictions for the Nashville area suggest the market will move at a much slower pace than what we’ve become used to.
Inventory gains and higher mortgage rates have fundamentally altered the supply-and-demand situation within the Nashville metro area housing market. In 2023, home buyers have a lot more negotiating leverage than they’ve had for the past two or three years. Sellers, on the other hand, will have to work harder to attract offers from a smaller pool of buyers.
With these current trends in mind, here is our best-guess real estate market forecast for the Nashville area:
Nashville Real Estate Market Forecast Into 2024
Through 2023 and into 2024, local home buyers should have more properties to choose from. This will increase the chance of finding a suitable property within budget — a welcome change from the tight inventory conditions of yesteryear.
Home prices could remain flat or perhaps rise modestly for the rest of 2023. In 2024, prices will likely begin to rise at a more gradual pace more in keeping with historical trends.
Despite these cooling trends, the Nashville housing market probably won’t experience anything resembling a “crash” or major downturn for the foreseeable future. Steady population growth continues to drive demand across the Nashville metro area, supporting home values over the long-term.
Here’s a summary of current housing market trends in the Nashville, Tennessee area, and some analysis on how they might influence future conditions within this market.
The Latest Findings from Realtor.com
On May 4, the research team from Realtor.com published their latest housing market update with data through the month of April 2023. In addition to reviewing national trends, this report offered some fresh housing market insight for the nation’s 50 largest metro areas, including Nashville.
One of the most significant trends for the Nashville-Davidson-Murfreesboro metro area had to do with inventory levels. According to Realtor.com, the total number of active real estate listings across the metro area increased by a whopping 193% over the past year.
That’s an important statistic for this real estate market. So let’s pause here to consider this…
To put it differently: the total number of homes for sale in the area has nearly tripled over the past year or so. This is a boon for Nashville-area home buyers, because it increases the chance of finding a suitable property within budget.
Among the nation’s 50 largest metro areas, Nashville experienced the second-biggest increase in active real estate listings (based on this report). Only the Austin, Texas housing market surpassed it, with a year-over-year increase of 258%.
Here are the five metros with the largest increase in active listings from April 2022 – April 2023:
- Austin-Round Rock-Georgetown, Texas: +258%
- Nashville-Davidson-Murfreesboro-Franklin, Tenn.: +192.9%
- Raleigh-Cary, N.C.: +183.2%
- Tampa-St. Petersburg-Clearwater, Fla.: +151.7%
- San Antonio-New Braunfels, Texas: +138.2%
In a March 2023 article for U.S. News & World Report, real estate reporter Aly Yale wrote the following:
“Nashville’s supply of for-sale housing bottomed out when rates were low in 2021 and early 2022, but when interest rates reversed course, the winds began to change. Supply increased steadily starting in March 2022 and hasn’t slowed down since. The city’s 4.6-month supply now outperforms the nation’s 3.2 months…”
Home Price Trends in the Nashville Area
Home prices within the Nashville metro area real estate market have also increased over the past year. The amount by which they increased varies, depending on what source you use. That’s because home prices can be measured in different ways.
According to the May 2023 Realtor.com report mentioned above, the median listing price for the Nashville-Davidson-Murfreesboro metro area reached $564,000, up 7.4% from a year earlier.
Of course, list prices only tell part of the story. They offer some insight into current market conditions (in this case, a rising trend), but they don’t reflect actual sales. According to other sources, the median sale price for this metro area was around $434,000 as of April 2023.
Zillow, on the other hand, currently shows the median home value at around $428,000 for the Nashville-Davidson metropolitan area.
Slower Price Growth Ahead
The one thing all of these different sources and metrics agree upon is that prices have actually come down since the summer of 2022. In June and July of last year, home values within the Nashville real estate market had reached an all-time high. But they’ve since come down a bit, following several months of modest declines.
So while the annual data show an increase in home values over the past year, the monthly figures reflect a housing market that might be starting to level off.
And that’s to be expected. In fact, this is part of a trend we are seeing in many real estate markets across the United States. After two and a half years of overheated home price growth, many markets are now beginning to decelerate and level off.
This seems to be the case within the Nashville housing market as well, and it circles back to the real estate market forecast we started with.
Through the rest of 2023 and into 2024, we will probably see a more moderate rate of home price appreciation in this metro area. We could also see additional month-to-month declines, as the formerly red-hot housing market “resets” to a new normal.
Better Conditions for Buyers in 2023
Overall, the Nashville real estate market is a lot more “buyer friendly” in 2023, compared to the previous three years during which buyers struggled.
The area still has a relatively low level of supply, compared to what’s considered “normal” from a historical standpoint. But those conditions have improved greatly over the past year. This in turn has given local buyers more room to negotiate, when it comes to the sale price and other terms.
According to a recent housing market assessment from Bankrate.com:
“Given the increase in Nashville properties’ average days spent on the market, along with more homes dropping their prices, buyers are likely to have more leverage in 2023 than they would have had a year ago.”
The Nashville housing market is also moving at a slower pace in 2023, a trend that could continue into 2024 as well. As of late spring 2023, homes listed for sale in the area spent a median of 32 days on the market. That was 21 days more than a year earlier, which indicates a slower pace of home sales.
In other words, it’s taking a lot longer to sell a house in the Nashville area today than it did a year ago (on average). Sellers now have to go above and beyond to attract offers from qualified buyers. So they might be more willing to offer certain concessions, such as a contribution to the buyer’s closing costs.
A Significant Shift from a Year Ago
This is a significant shift from where we were a couple of years ago, when house hunters were lining up to compete for a limited number of homes.
We’ve also seen a significant reduction in the number of homes selling above the list price. During 2021 and the first half of 2022, a fairly high percentage of homes were selling above the original list price. Stiff competition and bidding wars drove buyers to make bigger and bigger offers.
But this too seems to be a trend of the past. In 2023, hardly any homes are selling above the list price. This provides further evidence of an ongoing shift from seller’s market to buyer’s market.
A Housing Market Trend to Watch in 2023…
Inventory levels within the Nashville, Tennessee real estate market have increased significantly over the past year. But the monthly data show that this trend might be reversing, and that supply levels could shrink as we approach the second half of 2023.
Data provided by the national real estate brokerage Redfin showed that housing market supply in the Nashville area has declined over the past few months (after rising sharply during 2022).
Several factors could be driving this trend. For one thing, mortgage rates have risen substantially over the past two years, making some homeowners reluctant to list the properties.
In May of 2021, the average rate for a 30-year fixed mortgage loan was hovering around 3%. But by May of 2023, that average had risen to around 6.3%. As a result, a lot of homeowners who might otherwise be inclined to sell now have concerns about giving up their low mortgage rates. The Wall Street Journal published a story on this trend just last month.
This is one of the most important variables influencing real estate market trends and forecasts for the Nashville, Tennessee area. While this housing market has experienced significant supply gains over the past year, they could be diminished in 2023 due to seller reluctance and other factors. If that happens, the Nashville real estate market will become more competitive for buyers.
But for now, at least, home buyers in the area can benefit from higher inventory levels, less competition, and more bargaining power than they’ve had for a while.
Disclaimer: This article includes long-range predictions and forecasts for the Nashville-area housing market stretching into 2024. Those views are the equivalent of an informed opinion and should be treated as such. The Home Buying Institute makes no claims about future real estate or economic conditions.
Brandon Cornett is a veteran real estate market analyst, reporter, and creator of the Home Buying Institute. He has been covering the U.S. real estate market for more than 15 years. About the author