Stable and unpredictable? Sales trends defy reason
(As seen in the 5/17/19 Ledger column)
The Nashville real estate market is nothing if it is not baffling.
At the end of last month, there were 3,158 sales that fell into the “pending” category, meaning the properties were under contract, not being shown and the listing agent was confident that the sale would close.
Normally, those sales close the following month. It is rare for a property to go under contract, for the buyers and sellers to negotiate repairs, for the appraisal to be completed, for the loan to go through the underwriting process, the title company to prepare all of the various documents and searches and for the property to finally close within a 30-day period.
With contracts being terminated right and left – yes, contracts are being terminated, voided, pitched, dropped, breached – perhaps the listing agents are continuing to show the properties all the way to closing for fear of the terminations.
Whatever the reason, the month of April yielded 3,833 closings on the 3,158 pending at the end of the month.
With the magical 675 sales that appeared out of nowhere, the Greater Nashville Realtors reported that sales increased 1.8% compare to the same month last year and 7% compared to March. There were 3,833 pending sales at the end of April, compared with the 3,430 at this time last year.
Those 3,430 pending sales spawned 3,767 transfers last year, but who knows what it will spell for next month’s sales after the 675 unit jump last month?
Inventory numbers are considerably higher, with 11,627, compared with 8,876 last year. That trend has been rolling along for several months, as the March inventory was reported at 11,276.
The area grew by 242 sales, and inventory expanded by 351 properties.
In short, the market is at once stable and unpredictable.
A major development over the past three years is that buyers are not bashful when it comes to walking on a deal, especially when sellers refuse to make repairs or in cases when the appraisals come in lower than the sale price.
Understandably, buyers feel inspectors and appraisers are experts in their respective fields, and they heed their advice. The cost of selling a house twice usually exceeds the cost of the repairs.
Area homes are commanding higher prices in many areas, and buyers are expecting darn-near perfect homes to go along with the price tags.
Tis the season of the handy man. The not-so-small print in the real estate contract requires the plumbing, HVAC, structural and electrical work to be performed by licensed contractors.
Sellers should not be confused. Even if the task is flipping a switch, the flipper must have a license to flip that switch.
Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty LLC and can be reached at [email protected].