2016 Nashville Real Estate Info
What to Expect in 2016’s Real Estate World, Especially in Nashville, TN
1. Experts say that the majority of distressed sales, including foreclosures and short sales, will no longer play much of a role in 2016. That’s good news because it allows homebuyers to get a more accurate understanding of a home’s real value. There will be fewer “I’d like to find a four bedroom, three bath home, with a nice big yard. For $85,000.”
2. We should begin to see more builders offering homes for first-time homebuyers. For the last few years, many builders have focused on more luxury markets, giving them, of course, a higher profit margin. In 2016, expect to see builders shifting towards more affordable housing, capturing a larger spectrum of the homebuyers market. This change will be especially welcome in/around Nashville.
3. Rental rates are still accelerating, and about 85% of renters spend more than 30% of their income on rent. Hence, renters will be a great market to court in 2016. With a down payment and a decent credit score, many current renters will be able to purchase a home. For example, a $1,600 per month rental payment will likely qualify a renter to purchase a $250,000 home. That creates a good path towards building equity and financial stability.
4. In coordination with the above point, we should see an increase in buyers aged 25-35. These buyers represented about 30% of the market in 2015, but should account for an even larger percentage in 2016. On the other side of the spectrum, those in the “baby boomer” generation, aged 60+, are likely to be seeking to downsize. With both of these generational elements in play, expect that inventory will remain tight and homes will sell fast.
5. Don’t be surprised to see higher mortgage rates in 2016, but they are not expected to rise dramatically enough to kick people out of the opportunity to purchase. Expect modest increases: say $26 more per month for a typical $225,000 mortgage loan.
6. As an ABR, my primary duty is to serve my buyers. I would very much appreciate it if you recommend my to your friends and family.
Here’s to a prosperous 2016! Send along any real estate questions you may have to sfelton@realtracs.com or call me at 615.870.4094.
