As Nashville goes through the most challenging year in living memory – tornado damage, a raging pandemic, economic uncertainty, and a long-overdue reckoning on racial equality – the Nashville real estate market seems to sail on, undisturbed.
Values are still climbing – more slowly than in recent years, but still climbing. Money is getting even cheaper – currently under 3% for a 30-year fixed – offering increased purchase power for buyers. Inventory is tight, offering a field day for sellers.
Sounds like a party!
And yet … it can get bumpy.
Mixed Blessings for Buyers
Cheap money is great! The rule of thumb is that every one-point decrease in mortgage rates increases purchasing power by 10%. But, as I’ve said in recent months, cheap money brings out lots of buyers, and limited inventory makes the competition absolutely fierce! It’s great to be able to buy, but what if there’s nothing for sale?
Mixed Blessings for Sellers
It may seem odd, but this situation can make life crazy for sellers as well. Especially with listings at $500,000 and under, multiple offers are more-or-less the norm. Often, very juicy offers come in as buyers try to elbow their way to the head of the line. I’ve had several listings that received offers with escalation clauses competing against each other. Assessing which comes out on top requires some serious math, and the price has to be factored in along with the other provisions of the offer to determine highest and best. On top of this, bidders can get really crazy and offer above – sometimes way above – appraisal value, which can open another can of worms. What happens if the house doesn’t appraise at contract price? Challenging for sellers – even with people scrambling to buy their house.
What to do? A few suggestions:
Buyers, keep calm. Shop carefully and deliberately. Know what you want, know your limits, and make a strong bid on a house you really want. If you don’t get one, there will be another.
Sellers, price it right and stand back. In spite of the general frenzy, most buyers can look at comps and can tell if something is priced too high. If you price it right, they will come and you’ll get an excellent price.
Sellers, remember you are looking for both highest and best. Don’t jump at a high-dollar offer that’s larded with weird provisions and/or potential loopholes for the buyer.
Buyers and sellers, work with a good realtor. Managing challenges and stress factors is what realtors do for a living. Anybody can find a house these days. Most people can more-or-less offer one for sale on their own. It’s the complications, the pitfalls, the terrifying unknowns – stones in the road – that realtors specialize in handling.
I’m a realtor BTW, and I’d love to talk with you about how I can help!