Single-family home sales in the Nashville area dropped 4.6 percent in October from their September levels, the second consecutive month-to-month dip after a sales sprint this summer.
There were 1,446 single-family homes sold in the nine-county Nashville market last month compared with 1,513 in September, the Greater Nashville Association of Realtors reported on Wednesday.
But compared with year-ago sales, October’s report showed single-family sales were up 12.6 percent.
Realtors called that a bullish sign and a more sensible comparison than month-to-month swings, which can be influenced by weather, holidays and other factors.
“This is very indicative of us having reached a floor and quite possibly a turnaround,” said Jim McCann, head of mortgage banking at Nashville-based Avenue Bank, noting that four straight months of year-over-year sales gains are encouraging. “If it’s sustained, then you’ll likely see a reversal in property values,” McCann said. “They’ll start to go up.”
At the moment, though, median prices are slipping lower and other analysts don’t expect much relief from that trend until the middle of next year here.
Supply dropsHome inventory decreased 12 percent from year-ago levels, with roughly an 8.5-month supply of homes up for sale as last month ended, compared with an 11-month supply a year earlier, according to GNAR’s figures. Those estimates are based on sales rates of homes at each point in time.
Some Realtors suggest that the shrinking inventory means more on-the-fence homebuyers are beginning to act and eat into supply. In healthy economic periods, a six-month supply of homes is considered normal.
“This shows that we’re willing to buy homes without a shot in the arm,” said broker Price Lechleiter of Zeitlin & Co., referring to federal incentives for first-time homebuyers that ended in July 2010.
Other real estate analysts say, however, that local home prices are likely to languish until next summer before showing renewed signs of life.
In the Nashville metropolitan area, average home prices are expected to fall an additional 0.1 percent by the summer of 2012, according to Fiserv Case-Shiller projections released this week.
The median home price for a single-family home in October was $162,000, the lowest since April and a decline of 6.6 percent compared with last fall here.
The 188 condominium units sold were nearly the same as the previous month. Condo sales are up 30 percent over year-ago sales volumes, though, with median prices much weaker.
The median condo price of $139,515 was the lowest since February and represents an 8.8 percent decline in price from October 2010.
According to Fiserv Case-Shiller, Nashville area home prices are expected to gather some momentum beginning with the second quarter of next year and then rise 3.7 percent by summer 2013.
“There’s still some foreclosures in the market, which can drag median prices down,” Lechleiter said. “I’m optimistic that those numbers will improve next year.”
“Newcomers seem pleased with buying opportunities — both in inventory and price — available to them here in the Middle Tennessee area,” GNAR President Alice Walker said in a statement. She said the Middle Tennessee region is “increasingly attractive to both corporations and families.”
