Middle Tennessee’s skyrocketing home sales – and prices that are also climbing, but at a slower pace – are no surprise to David Hughes, president of Citizens Homes, one of the area’s busiest home builders.

“We have people buying $300,000 homes for their first home,” Hughes says. “A few years ago, that would have been a move up home. People can afford more with interest rates as low as they are.”

Historically low mortgage interest rates, combined with prices that haven’t yet climbed back to their pre-recession highs, encouraged growing numbers of people in the Nashville region to buy a home in January.

There were 1,634 home closings last month, according to the Greater Nashville Association of Realtors (GNAR). That was 18.7 percent more than in January 2011, when there were 1,377 sales. This was the first January since 2008 with more than 1,500 sales.

In Davidson County, Middle Tennessee’s largest housing market, there were 756 closings in January, almost 9 percent more than in January 2012 when there were 694 sales. Last month’s average price was $194,772. That was 4.5 percent more than the average of $186,450 a year ago, according to a market survey by Chandler Reports.

In the popular Berry Hill-Melrose area along Eighth Avenue, sales were up almost 91 percent but prices headed in the opposite direction. Last month, 21 homes were sold in the neighborhood, compared with 11 in January 2012. Last month’s average price in the neighborhood, which includes the 37204 zip code, was $358,029, down more than 34 percent from the average of $543,258 in January 2012.

In the Hillsboro-West End neighborhood, sales were up more than 31 percent. Last month there were 25 sales, compared with 19 in January 2012. The average price was $401,596, an 8.4 percent increase compared to the $370,410 average price in January 2012.

“It’s the rubber ball effect” as the market recovers from the recession, says Realtor Karen Hoff. “What goes down must go up.”

She expects the recovery to continue “unless something happens” to throw the economy into turmoil.

GNAR President Price Lechleiter expresses similarly cautious optimism.

“Though these numbers are a great start to the year, challenges still remain for the overall real estate market,” he says. “It’s difficult to anticipate the impact national economic trends and government choices will have, including decisions on fiscal issues.”

Unless the White House and Congress agree on a plan to trim the deficit, large across-the board spending cuts will automatically kick in. Some economists warn that could tip the country back into recession.

In the perennially hot Williamson County market, sales were up more than 47 percent last month. There were 287 sales during the month, compared with 195 in January 2012. The average price was down more than 4 percent. Last month’s average price was $353,497, compared with $370,902 in January 2012, according to Chandler Reports.

In the emerging market of Thompson’s Station south of Franklin, sales were up 75 percent and prices were up more than 56 percent. Last month, 28 houses were sold at an average price of $290,081. In January 2012 there were 16 sales for an average price of $185,000.

In Nolensville, located at the point where Williamson, Davidson and Rutherford counties come together, sales were up more than 64 percent. There were 23 closings last month, compared with 14 in January 2012. The average price was $337,679, about 1 percent higher than the average of $334,698 a year ago.

Nolensville is so popular that it was the first community where Goodall Homes began raising prices as the market recovery took root.

“That was something we haven’t done in years,” says Goodall Vice President Chris O’Neal.

Nolensville has a unique combination of affordable prices, access to Williamson County’s highly rated schools and a location within easy commuting distance of Nashville, Cool Springs, Smyrna and Murfreesboro.

“A few miles from Concord Road with its $1 million houses, you can get a 3,000-square-foot house for $300,000,” O’Neal says.

In Rutherford County, sales and prices were both higher in January 2013. Last month there were 389 sales, 43.5 percent more than in January 2012 when there were 271 sales. Last month’s average price was $149,720, a 3.3 percent increase over the $144,880 average price a year ago.

In Smyrna, where Nissan has expanded to produce its LEAF electric car, sales were up almost 46 percent and prices were up more than 31 percent. There were 67 sales last month, compared with 46 a year ago. January 2013’s average price was $144,692. The average price in January 2012 was $110,144, according to Chandler Reports.

In suburban Wilson County, closings and prices were both higher last month. There were 151 sales in January 2013, almost 40 percent more than a year ago when there were 108 sales. Last month’s average price was $197,668, a 7.6 percent increase over January 2012’s average price of $183,710.

Lebanon’s 37087 zip code was particularly healthy. There were 41 sales last month, almost 37 percent more than the 30 sales in January 2012. Last month’s average price was $167,356, more than 23 percent higher than January 2012’s average of $135,746.