People have been asking me about this for a couple of years now. Are we in a bubble? When will it burst? Should I buy (or sell) now? Or wait?
Hard questions to answer if you don’t have a crystal ball. But lately they have become more germane. We are in a slowdown.
So, what does this mean? Depends, of course, on who you ask. And your point of view.
First, about the slowdown …
The dam ain’t bustin’ and no one needs to head for the hills. This is a slowdown, not a crash.
What’s actually happening?
I was listening to a presentation by a local broker last week, and I think he said it well: the current market favors sellers – but just barely – and by this time next year the market will have shifted to favor buyers – but just barely. This makes sense. It’s a shift, but not a radical realignment.
Interest rates are rising, and inventory, while still tight, has loosened. Higher interest rates take some people out of the market altogether and reduce the purchasing power of many of those remaining. This puts downward pressure on prices. Increased inventory does the same thing. More houses for sale + fewer people shopping = lower prices.
What does this mean to sellers?
Your house will sell, but you might need to adjust your attitude and expectations. Gone – for now – are the days of demanding a high price and expecting multiple offers over the course of a few days. Unless a property is fairly aggressively priced from the outset, it can take a few weeks, or few months, to sell.
What does this mean to buyers?
You’ve got a little breathing room. Gone – for now – are the days of having to make a life-altering decision on the basis of a 15-mintue walk-through. If a property is well priced, buyers will still have to be decisive. But not frantic. And there is sometimes room for bargaining.
And overall …
We are seeing the Nashville market come back into a semblance of balance. In the great scheme of things, this is good. The market has been out of control over the past several years, and that’s not really healthy. I’m glad to see the adjustment. It gives all of us – buyers, sellers, and realtors – a more rational working atmosphere.
The real estate business goes on! Albeit at a more dignified pace.