Listings are about to explode | Nashville Housing Update
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- Опубліковано 6 вер 2024
- This is a Data centric Analytical approach to the Nashville Tn Housing Market. We look at trends in active listings, median price, mortgage rates, contracts, rent rates
Ethan Flynn
www.ethanflynn.com
423-767-6000
tflynn@realtracs.com
www.ethanflynn.com
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Recurve Real Estate
DANA JORGENSEN
PRINCIPAL BROKER | OWNER
LICENSE: 344195
(615) 496-3837
dana@recurverealestate.com
#housingmarketupdate #nashville #housingcrash #housingmarket
I have no idea how there are so many people willing to pay a 3k mortgage on a house that rents for 2k.
Depends upon if you feel lucky I guess. My mortgage is $3300/month and I could get a similar sized home for rent for $2700/month. Say you commit to putting aside $3300/month and in the rental scenario you pocket the savings $600/month x 12 = $7200/yr.. Compare to owning the home, mortgage is mostly paying interest in the first year, but $5000 was paid down on the principal. So, same $3300/month payment comparison: I figured $5k vs $7.2k isn't that much different and one thing I'm sure of is rents go up most years. Whereas on a 30 year fix, it's mostly static - other than property taxes and insurance which can still rise. My math was even in the first year, I'd be nearly evenly building wealth as a renter or owner, but by year 2 or 3, and from then on, owning would be the clear winner. Just a bit of luck that my home value has jumped by 25k in the first year. I say that because my neighbor has the same floor plan and just sold. Counting that, my equity is $25+$5=$30k in one year. I don't need to count it, I'll be in this home for years, and we'll see what gains are realized when the time comes. But anyway, at the rate rents typically rise, in 5 years I would expect renting this same house to cost more than the mortgage payment on it. By year 5 - there would be no savings to renting at all, while the home will continue with appreciation of value and yearly payment of principal building further equity. To me, the math favors home ownership. But it didn't really matter, I just wanted the place, of course.
I agree. There are so many people that will do it. So many.
Purchasing a home is a long-term investment strategy. RE investing isn't for the faint-hearted. They are likely bullish in Nashville as a whole as well as the neighborhood they purchased in. Ex.) if you bought a home within 2-5 minutes from where that new Oracle HQ is being built, you struck gold. You pay a high mortgage for the first two years, refinance, and when the surrounding area and office is built up you can go grab that $3k+ asking rent.
Insanity continues. According to my math with a 10% down payment and the median home price in Nashville at 493k, to keep your housing payment at 1/3 of your income you would have to make $140,000 per year. You're all in at about 3900 per month (@ 7% interest) without including HOA or maintenance cost. I think I know very few people making 140k per year. The Californians and the pretty wealthy can still buy I guess.
It is crazy!
This is the end of first time home ownership for who knows how long. Until rates are 10%-12% I don't see how FED can achieve its goal without a black swan or major recession with mass layoff events.
🎉🎉🎉 Hi Ethan 😊
Thank you so much for sharing this extensive data that you put together and collect. I keep a very close eye on the Real Estate market throughout our country and this Tennessee situation has really got me confused 🫤. I used to think that I could watch the market and come up with my own conclusions as to what will be happening next.
But Nooooo Middle Tennessee has been such a strong market for so long but I’m now realizing that there are still tons of people out there that still think that it’s affordable versus where they come from (and that may be true..)
I started investing out in the Nashville area about 24 years ago and almost anything was possible. My first house out there.. I payed only $105,K my first Condo in downtown Nashville I bought for $205,k
I guess I’m particularly to blame for this crazy market because I always made awesome money on each one I sold.
Anyways….. I’m just blabbing now. So Thank you again and I’ll be looking forward to watching your next video next Saturday.
Blessings,Carlos ✝️🙏❤️😊🇺🇸
Thanks Carlos!
People are fleeing places like NY and CA to places like Nashville and surrounding areas. I was lucky enough to see this coming and sold my house in donelson for 3x what I paid 3 years prior in 2020 and was one of the best decisions I’ve ever made. I moved 2 hours outside Nashville and was able to talk down 100k on a 40 acre farm, and the place next door is under contract for almost 3x what I paid for my place.
In the end it’s kind of a wash because the native Nashvillians are selling for 3-5x the actual value and the people from places NY and CA are saving a ton too.
The best buying opportunity will be when all of the tech layoffs happen later this year and next year when everyone that moved to Tennessee can’t make their payments. I am close with someone that processes unemployment claims on a national scale and the company has been given a heads up that sooooo many are on the way.
The smart move for the average American would be to sell their home at these overvalued prices, lock in a lease for the next two years… and then buy outright without having a loan when it all falls apart.
Very understandable approach. Lease is so much cheaper. The other side though is the fed could decide to print to maintain “financial stability”. This would be a disaster for those that don’t own hard assets like houses.
Yooo Ethan, I was the guy who left the long comment on your previous vid regarding mix, glad you talked about it in this vid. :)
Curious to get your opinion on something else. Are you seeing/hearing of cases where people have stretched themselves too thin by taking on a big mortgage and planned on seeing lower interest rates in the future only to have rates be the same/higher than they were a year ago right now? Are some people trying to escape a mortgage that is more expensive over a longer period of time than anticipated? Love the vids.
Awesome. Thank you!
Yes. Mostly lower priced houses and first time home buyers who thought they could buy with little to no money down and then refi later.
Most of the expensive houses are not distressed sellers and don’t have to sell. Which means they can wait out if there is no demand.
@@EthanFlynn Appreciate the response!
Hey man, just found your channel. Super interesting information.
I would love to know what program/site you are using to see these graphs and info. Is it a MLS only thing?
Thanks! Using MLS and puthon/plotly.
Thanks Ethan! This channel means a lot to me. You are fantastic.
Thank you!
The key factor I think is if investors start to sell. The shortage to a large degree has been driven by investor demand, this is evident by how relatively cheap it is to rent a home. A nice 1,200 SF home rents for about the same in most cities as a 1-bed apartment. Strong indication that there is a massive oversupply of homes available for rent.
I ask this with all seriousness, but why would that happen? I rented from American Homes 4 Rent for 7 years. Rent went from $1725 to $2450. They have super healthy profit margins, record profits every year, up 46% in 2023 over 2022. Latest quarter "Rents and other single-family property revenues increased 7.3% year-over-year to $408.7 million for the fourth quarter of 2023." I'm using them as the example, what would cause them to become allergic to money and start selling their business? I know there is some speculation about AirBnB folks bailing, but there is also speculation we become a nation of renters. Other countries have higher rental vs. owner occupied, it seems like the U.S. is heading that way now. I hope not. I mean I hope everyone that wants a home buys one, but the logic of why investors would sell is escaping me. I'm sure mom&pop investors wouldn't want to buy with 7% interest rates, but those who invested years ago with low interest rates may want to hold onto that.
Houses in that neighborhood last year $590,000
This year $710,000
WTactualF
Dude. No way, I used to live in this neighborhood too!
No kidding!? When? Wonder if we were neighbors.
Ethan, could you cover HOA fees and transfer fees in one of your vids? They seem like such a scam to me. For example Crescent Homes new community Fairhaven off Lewisburg Pike - $265/month hoa and $3000 transfer fee! Does not even mention having its own clubhouse/pool. What is this nonsense?!
It is total nonsense! I need someone to explain it to me 😂