Nashville’s housing market has been on a rollercoaster ride these past few years. Let’s dive into how rising prices and interest rates have impacted residential real estate sales in Davidson County.

In 2020, Nashville saw a surge in home prices. This wasn’t surprising considering the influx of residents from expensive coastal cities like New York and San Francisco.  Historic low interest rates and low inventory due to the pandemic further fueled this fire, leading to bidding wars and homes selling well above asking price.

Fast forward to 2024, and the market has cooled significantly.  A major factor is the rise in interest rates, currently hovering around 7%. This means even with Nashville’s continued population growth (around 86 new residents daily!), affordability has become a top concern for buyers.

The result? Buyers are increasingly looking beyond Davidson County for more affordable options. This has benefited surrounding counties, while some urban core neighborhoods in Nashville are experiencing a return of buyers thanks to price reductions. At CityLivingGroup, our agents have been ferrying more buyers further from the city, as we also work with buyers and sellers of single family homes.  We have personally experienced this move to affordability.  The distance from the city these buyers might travel to find a home has been exacerbated by the high interest rate environment, which radically impacts a buyers purchasing power.  

The high cost of construction, coupled with interest rate hikes, has also impacted new developments.  With a sudden influx of new homes hitting the market, some developers are facing an oversupply situation leading to lower price adjustments to attract buyers. As prices adjust, some are slowly returning to purchase product like High View Cottages, East End Village, CityBluffs, Ontario, and some of the other communities CityLivingGroup is promoting.

The Nashville real estate industry is definitely feeling the pinch of these economic changes. That said, we are seeing the market adapt, and we will see an interest rate cut or two, which will pull people from the sidelines, and the market will rebalance.  

This blog post just scratches the surface of what’s happening in Nashville’s real estate market. If you’re considering buying or selling a home, it’s crucial to work with an experienced agent who can navigate these changing dynamics.