Nashville's Housing Bubble Has Popped, And 'There's A Lot Of Room For Sellers To Keep Cutting,' Real Estate Executive Says

Nashville has long been a darling of homebuyers and investors. However, a wave of price cuts is underway, suggesting its yearslong housing boom may end.

According to real estate analytics firm Reventure, more than a third of Nashville home sellers reduced their asking prices in June, a record high for the month and well above historical norms. The surge in price reductions comes as the median list price in the Nashville metro area has dipped 3% from last year, though it remains nearly 50% above pre-pandemic levels.

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“Nashville just set a record for price cuts,” Nick Gerli, CEO of Reventure, said on X (formerly Twitter). “That’s the highest level for June going back seven years and well above the long-term average of 24%.”

"The price cut rate is one of the most important metrics you can look at as a homebuyer or real estate investor," he said. "When thousands of sellers across an entire market begin to reduce the price, it's generally a leading indicator that aggregate price levels will drop in the next six months."

The cooling trend isn’t limited to asking prices. The Greater Nashville Realtors Association reported that home sales in June were down 13% compared to last year, with pending sales also declining.

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Yet, at the same time, according to the Greater Nashville Realtors Association, the median sale price for residential homes in the area increased from $474,000 in June 2023 to $505,000 this June. "There’s a lot of room for sellers to keep cutting," Gerli said.
Jack Gaughan, vice president of the Greater Nashville Realtors Association, sees market opportunities. “There’s more inventory on the market, meaning that buyers have more choices and a little bit more leverage when it comes to negotiating a deal,” he said in an interview with local news station WKRN.

However, some believe the market correction could be more severe. Gerli ranks Nashville as one of America’s most overvalued housing markets, estimating that prices are 30% above long-term norms. "Don't be surprised if prices drop there in [the second half of] 2024," the real estate executive said on X. 

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The situation in Nashville mirrors trends in other Sun Belt cities that saw rapid price growth during the pandemic. Areas like Texas, Florida, and Tennessee are seeing home values fall as a boom in construction in those states created too much supply. And, as mortgage rates remain elevated, many of those markets are seeing a pullback in buyer demand.

"In a best-case scenario, the market will stall for 3-4 years as incomes catch up to prices," Gerli said. "In a more likely scenario, home prices will drop."

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