Nashville Sellers ‘Need to Pack Their Patience’ For a Housing Market That Now Strongly Favors Buyers

• Nashville is the nation’s second-strongest buyer’s market with 129% more home sellers than buyers in June. In other words, Nashville has more than two home sellers for every buyer actively in the market.
• Years of steady homebuilding, fast home-price appreciation and higher mortgage rates have shifted Nashville’s housing market to favor buyers since the pandemic home-buying boom came to an end.
• Buyers in Nashville can now take their time to find the right home. Many are opting for newly built homes, for which builders are offering relatively low mortgage rates and help with closing costs. 
• People buying existing homes in Nashville are often able to negotiate with sellers on price and other terms. 
• Redfin agents in Nashville advise home-sellers to get their home in move-in ready condition and price appropriately.

Nashville is the nation’s second-strongest buyer’s market, after only Miami, and ranked ahead of three Texas markets: Houston, San Antonio and Austin. With more than two sellers for every buyer actively in the market, Nashville’s imbalance means buyers have plenty of homes to choose from, few competing offers to contend with and room to negotiate on price and other terms. 

“Buyers are taking their time these days. There are a significant number of listings on the market, people are taking their time and waiting for the right one,” Aaron Glicken, a Redfin Principal agent in Nashville, said. “Buyers feel like they need to get a significant deal. They’re submitting low offers on homes that are already priced well for the market.”

In Nashville, new listings are up 9.4%, compared to a 0.1% increase nationwide, and the typical home spends 78 days in the market, compared to 49 days nationwide. 

Nationwide, there were an estimated 48.5% more sellers than buyers in June, meaning much of the U.S. housing market also favors buyers. Nashville’s seller surplus, however, is nearly three times the national level.

Nashville Redfin Principal agent Kristin Sanchez said she thinks several factors, including increased inventory, are affecting the local housing market. 

“This market is giving homeowners confidence they’ll actually have somewhere to move after selling. Many homeowners with super-low interest rates have delayed life changes for several years. Now, those life events can’t be postponed any longer, so they’re entering the market despite higher mortgage rates,” Sanchez said. “Some sellers recognize that the frenzied appreciation of 2021 and 2022 has leveled off. They’re choosing to sell while home values remain relatively stable rather than trying to perfectly time the market.”

“Many sellers are learning the hard way. They’re turning down early offers because buyers are coming in low, only to realize down the road they’re still getting low offers or need to lower the price,” Glicken added.

Some Nashville sellers have found Redfin Early Access, which allows them to start marketing their home as a “coming soon” listing before its official market debut, helpful in determining the right price, especially for unique homes for which there aren’t many comparable recent sales.

Years of Homebuilding, Higher Prices and Mortgage Rates Have Shifted the Balance of Power Toward Nashville Buyers

Nashville’s housing market has changed considerably since the pandemic housing boom.

As new homes have been built across the metro over the last several years, inventory has steadily increased. At the same time, higher home prices and mortgage rates have reduced demand, leaving many sellers competing for a relatively limited pool of buyers.

Nashville home prices rose 2.8% year over year in June to a median price just below $500,000. Compare that to the annual price increases of around 20% or more that were common during the pandemic home-buying frenzy, when the typical Nashville home sold for less than $400,000.

Sanchez says she’s still seeing buyers migrating from Florida, California and Chicago. The number of buyers from New York has declined since the pandemic. 

Compared with the frenzied pandemic market—when buyers bid tens of thousands above asking price—today’s buyers have considerably more leverage in Nashville. 

Some of the terms buyers and sellers are negotiating on include price reductions, closing costs and repairs, Sanchez said. 

“Many buyers, especially first-time buyers, opt for new construction, where they can get a brand-new home with a super-low mortgage rate and closing-cost assistance,” Sanchez said. 

Sanchez added that she’s seen builders offering fixed rates of 4.99% and some are even offering temporary buydowns on top of that. Most sellers are giving closing costs to buyers who need to buy their rates down. 

In May, Sanchez helped some first-time home buyers using a down-payment assistance program to purchase a home for $15,000 less than its appraised value. The couple was able to get 100% of their closing costs paid for and negotiate repairs before closing too. 

“I currently have another buyer under contract for $60,000 under list price right now. A couple of years ago, these same buyers likely would have competed against multiple offers with little negotiating power,” she said.

The increased selection in Nashville has also allowed buyers to be more selective, without pressure to make quick decisions.

“Post-pandemic, we were one of the markets where prices skyrocketed and now we’re seeing a correction fueled by higher mortgage rates and lower buyer demand. I do think that prices have corrected enough to bring more buyers to the market than the previous year,” Glicken said.

Sellers Are Facing More Competition in the Formerly Red-Hot Tennessee City

For sellers, standing out has become increasingly important and “packing their patience,” Sanchez said.

With more listings competing for buyers’ attention, accurately pricing a home from the outset has become critical. Sellers should expect buyers to negotiate more aggressively than they have in recent years.

Sanchez added that inflation in the Nashville housing market has priced out a lot of locals too. 

“Home prices have risen so much that people who have been here for 10,15, 20 years can’t afford to buy here anymore,” she said. “Everything has slowed down a bit since housing prices have increased so much.” 

One way sellers can make sure to stand out is to have their home move-in ready. Glicken added. 

“The sellers that do upgrades and touch-up work like repairs and paint, tend to sell faster. Buyers today want a move-in-ready home more than ever. They have more choices in today’s market and prices and interest rates are still elevated,” he said.

For a complete ranking and overview of the balance of power in the housing market, click here.