Home sales in the Nashville region increased dramatically over the summer, bringing hope that consumers are gaining confidence in the economy and that the housing market may be recovering from the recession.

“Home sales reflect a certain amount of optimism,” says Frances Garner, a Realtor with Parks Properties in Green Hills.

There were 4,323 sales in Davidson, Williamson and Wilson counties during the third quarter which ended Sept. 30, compared with 2,592 during the second quarter, according to a market analysis by Chandler Reports.

Sales during the third quarter months of 2011 – July, August and September – also were substantially higher than during the third quarter of 2010 when 3,674 homes found new owners.

Davidson County was the quarter’s brightest spot in the market, with a jump in sales of almost 17 percent. During the third quarter, 2,705 homes were sold, 391 more than were sold during the third quarter of 2010, when 2,314 homes changed hands.

Last summer’s average price was $196,021, a 4.4 percent increase of the average price of $187,728 during the third quarter of 2010.

Zeroing in on a neighborhood-level, sales were up in most Davidson County communities.

In trendy East Nashville, for example, 154 homes were sold over the summer, compared with 121 a year earlier. The average price rose to $162,488. It was $149,674 during the third quarter of 2010. In Green Hills, 123 homes were sold last summer at an average price of $504,752. During the same period in 2010, 115 homes found buyers at an average price of $440,489.

Prices did decline in some neighborhoods. In Bellevue, sales jumped more than 23 percent, but the average price slipped a bit to $182,219, down 3 percent from $187,783. Buyers closed on 173 homes, compared with 140 in 2010.

The market’s general recoveryshowcases Nashville’s economic strengths, says Zeitlin & Co. Realtor Mike Nichols.

“It really has to do with where we are as a city,” he says.

The market is benefiting from a number of factors, according to Nichols. Some buyers are residents of the city who’ve decided to change addresses. Others are corporate transfers and individuals moving here for work. Still others are graduates of the city’s numerous colleges and universities who have decided to begin their careers here.

Nashville’s unemployment rate in August was 8.8 percent, well below the state average of 9.7 percent, according to the state Department of Labor.

“It’s a good place to be,” says Nichols.

In Williamson County, 1,058 houses were sold last summer, a 17.6 percent increase over the third quarter of 2010, when there were 900 sales. The average price in July, August and September was $371,109. A year ago it was $377,205, according to Chandler Reports.

Williamson County’s housing market is traditionally strong thanks to the county’s highly regarded schools and the quick commute to offices in Cool Springs and Maryland Farms.

The Williamson County housing market should get a further boost next spring when the first finished homes in Boyle Investment Company’s 602-acre mixed use development Berry Farms become available. Located inside Franklin’s southern boundary along I-65, Berry Farms will feature urban-style lofts, condominiums, town homes and single-family homes.

In Wilson County, home of fast-growing Mt. Juliet and the Providence neighborhood, sales during the third quarter of 2011 were almost 22 percent higher than a year ago, although prices dipped 3.4 percent, according to Chandler Reports.

Last summer 560 homes were sold in Wilson County at an average price of $195,118. Last year there were 460 sales at an average price of $202,011.

At the same time more people were buying houses, existing home owners were taking advantage of falling interest rates and refinancing, says Shawn Meehan, president of Legacy Lending Group in Green Hills.

Interest rates, already at historic lows, have been falling even further. The interest rate for a 30-year fixed rate mortgage dropped to 4 percent, he says.

It’s hard to predict whether rates will fall further, says Meehan. “I think they are as low as they can go. But I’ve said that for several years.”

In the broader Nashville region market, which includes Davidson, Williamson, Wilson and several additional counties, there were 5,900 third quarter closings, which is 20 percent higher than last year’s third quarter closings of 4,906. Year-to-date closings in the same area reached 15,531 -- down 2.5 percent from the 15,929 closings reported through the third quarter of 2010.

“Home sales have increased for the third consecutive month” in September, says Greater Nashville Association of Realtors President Alice Walker. “Year-to-date numbers, which are down only slightly, still reflect the market distortion seen by last year’s tax credit, which was still in effect until early in the third quarter of 2010. It is encouraging to see that we have nearly caught up with last year at this point in the year. ”

Median prices are down about 5 percent across the market, she says.

“While we don’t like to see a drop in price, being down only single-digit percentages is much more desirable than the double-digit decreases other areas of the country are currently seeing.”

The market is showing other signs of strength.

“Pending sales were up again for the fourth consecutive month, an encouraging sign of a potential market recovery,” says Walker.