Cheap homes in Nashville experience strong sales in July
Sales of cheap, foreclosed homes in the Nashville metro area increased throughout a strong July, potentially portending a rebound for the homeowner market for real estate in Nashville, according to The Tennessean.
According to local real estate experts, there were 2,574 home closings reported in the month of July, representing a 27.4 percent increase from the same time period last year. Additionally, The Tennessean reported that sales of single-family homes in the same area were up 26 percent from the same time period a year ago, with a slight uptick in of $1,350 to a median price of $181,250.
Local real estate experts believe that unlocking the "shadow inventory" of bank-owned homes that haven't hit the market yet could revitalize the real estate market in Nashville. Demand for homes is currently outstripping the supply, according to The Tennessean.
"The available inventory in Greater Nashville is down 16 percent from last year," Kendra Cooke, a local real estate expert, told the news source. "Frankly, some additional inventory would be welcome. There is just a seven-month supply overall, and only about a five-month supply of single-family residential inventory. Homes that are market-ready and priced correctly tend to be very popular and move quickly."
The shadow inventory of bank-owned homes, comprising all homes in pre-foreclosure or some other stage of the process, stood at 1.5 million nationally in April, the most recent month for which estimates were available. Additionally, banks are currently withholding approximately 90 percent of their portfolios, according to The Tennessean.
Prospective home buyers are closely eyeing this hidden supply of houses. The inventory of U.S. homes for sale dropped sharply. by around 25 percent over the past year. In the Nashville area, inventory has declined by 14.6 percent since the summer of 2011.
There are several reasons foreclosed homes are not flooding the real estate market. For example, in certain parts of the metro area, these properties are in a state of dilapidation, needing repairs and touch-ups before they can be listed. Additionally, other distressed properties are still occupied by borrowers. However, sometimes the bank is simply holding back and waiting for demand to build and revitalize the market.