“Market Activity decreased significantly as the rates rose 200 basis points since the start of the second quarter.”

That’s the August assessment from Steve Jolly, whose tenure as president of the Greater Nashville Realtors could have come at a better time. His predecessors had nothing, it seems, but good news to report as the market enjoyed a long winning streak.

The leadership path in the Greater Nashville Realtors historically has included a year or two as vice president, a year as secretary/treasurer and a year as president-elect before jumping into the frying pan. During Jolly’s service, there was reason to be, well, jolly. Not so much now.

For the year, Nashville-area sales are resting at 21,435 through the end of August compared to 22,169 last year. Pending sales have dropped from 3,608 last August to 3,245 this year.

It should be no surprise that inventory has increased with the rate manipulation and lower sales figures. At the end of August last year, inventory was 4,615. This year it’s 7,310.

It is worth noting that in 2020 – before the deluge – inventory was 8,459.

Meanwhile, prices are still rising. The median price for a single-family home in August was $495,000, up from rose from $415,000 in 2021. The median price for a condominium rose from $292,580 to $348,000 for the same period.

Interestingly, unit sales also increased for condominiums in 2022. Jolly’s take is that interest rates have pushed some buyers from single-family homes into more affordable condominiums.

With the skyscape filled with cranes, there will be ample opportunity for condominium buyers to purchase homes in the months and years ahead.

Businesses have committed millions to move into the Greater Nashville area, and jobs are following. The rental market is as much in demand today as the residential sales market was two years ago, so there is demand for housing that is not going to be diminished by rate hikes.

Short-term rental demand is high, and there is a strong market for investors in these properties.

Consequently, there will be sales, either to investors or owner-occupied units. Perhaps the price increases will slow, but the prices have not dropped. Owners are not selling for less than they paid for properties.

Sale of the Week

The real estate team of Jonathan Heard and Lacey Newman recently sold the property at 4706 Belmont Park Terrace for $3.45 million even in the aftermath of the 200-basis point penalty the Federal Reserve Board has levied against its stubborn foe, an enemy also known as inflation. Heard and Newman hail from Compass RE.

4706 Belmont Park Terrace

Perhaps the interest rate affected the sale of this home as the Heard/Newman team had priced the home at $3.6 million, a number that might have worked in the Dark Ages of 2021. In this market, the home lasted 56 days before selling for $150,000 less than the list price.

But weep not for the sellers who paid $1,569,900 in 2016.

During the six years of ownership, the sellers had added a swimming pool described by the Realtors as a “gunite pool with a hot tub and a tanning ledge.” The tanner need not worry about privacy, as “lush landscaping abounds from the climbing clematis around the front door to the mature trees around the pool.”

The owners also “reimagined the space to include a spacious bonus room with a wet bar” and – sticking with the bar(re) theme, added “a barre studio/exercise room.” Was it “imagined” first and then “reimagined?” I hope Yoko didn’t read about this property lest she reimagine a new line of Lennon material. It’s easy if you try.

Even with the pool, the reimagined rooms and the other improvements, the 2016 investment likely paid dividends. The buyer was awarded a magnificent home with four bedrooms, four full bathrooms and one half bathroom for $600 per square foot.

Tim Thompson of the Tim Thompson Premier Realtors represented the buyer and helped save $150,000 for his client.

Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty and can be reached at [email protected].