Housing Prices - Really
The recently released Case-Shiller index reports an alarming 18% drop in housing prices nationwide. What does this mean to us in Nashville and other markets in the U.S.? Does it mean everyone’s homes are worth 18% less than they were last year at this time? Does it mean buyers can expect to pick up incredible deals, and that any low-ball offer will be accepted?
Simply put, No, Yes, and No.
The Index measures median housing prices in 20 metropolitan areas in the U.S. Nashville is not one of these markets. The Greater Nashville Association of Realtors reports an 8.3% decline in Nashville median housing prices year over year, but that’s not the whole story, either. Median price, by definition, is the point at which half the houses sold cost more than this figure, and half cost less. So a decrease in median housing prices, while often accompanied by a decrease in value, means that people are buying cheaper houses. It does not mean that everyone in San Francisco just lost 31% of their value, or that everyone in Nashville just lost 8.3% (by the way, the median housing price in Nashville for November was $165,000). A lot of what has been driving the lower figures is the purchase of lower priced, foreclosed or short-sale properties.
So if you are selling in Nashville, it’s important to price your home realistically, and be able to back up your price with reasonable, accurate, and recent comparable sales. If your home is above the median price, realize that the pool of buyers may be somewhat smaller than in the recent, record setting years in late 2005, 2006 and early 2007. If you are buying, you will want that same information to make an offer that will be accepted, or at least further the negotiations to get you to a closed sale.
There are great deals to be made, but we’re not in fire-sale mode here in Nashville. Arming yourself with up to date, comprehensive information whichever side of the transaction you are on is key.
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