This, as a result, has led to a rapid rise in home prices. From a price-per-square foot of living space perspective, home prices have reached 50 percent above pre-crash highs.
"Unlike similar metros across the country, Nashville didn't experience drastic price reductions post-crash, only losing 6 percent of value before the last four years of impressive appreciation," said Tom O'Grady, CEO of Pro Teck. "This combination of population growth and job creation has insulated Nashville from the downturn – limited inventory also played a part."
But while the growth in Nashville should be looked upon as a good thing from a recovery standpoint, a noticeable drop in housing starts post-crisis has made housing inventory scarce.
According to recent housing data, in the four years before the crash (2003 – 2006) Nashville averaged 15,000 building permits a year. This number bottomed out at less than 5,000 in 2009.
By 2014, the slowdown in Nashville housing starts had ballooned to a shortage of 53,000 new homes – which in turn has created a nearly four-year backlog when compared against the historic norm of 15,000. Fortunately, an increase in housing starts in 2015 and 2016 are chipping away at this number.
Another unfortunate impact of this pent-up demand has been economic displacement, as some residents can no longer afford to live in Nashville because of the rising prices. "Looking at Months of Remaining Inventory (MRI) by price show there are not many options for those looking to purchase a home for less than $300,000," said O'Grady. "With investors paying a premium for land near the city, they are building bigger and more luxurious homes to make a profit, thus leaving a shortage of affordable housing."
Click here to read the entire forecast, including data and graphs that further highlight market trends discussed in this release.
CBSA Winners and Losers
Each month, Home Value Forecast uses a number of leading real estate market-based indicators to rank the single-family home markets in the top 200 CBSAs and highlight the strongest and weakest metros.
Top 10 CBSAs this month include:
- Bellingham, WA
- Colorado Springs, CO
- Greeley, CO
- Mount Vernon–Anacortes, WA
- Nashville–Davidson–Murfreesboro–Franklin, TN
- Ogden–Clearfield, UT
- Sacramento–Roseville–Arden-Arcade, CA
- Seattle–Bellevue–Everett, WA
- Stockton–Lodi, CA
- Warren–Troy–Farmington Hills, MI
This month's top ten includes three metros from Washington state, two from Colorado and two from California. We have been waiting for a slowdown in these markets, but haven't seen it yet.
Bottom 10 CBSAs this month include:
- York–Hanover, PA
- Las Cruces, NM
- Albuquerque, NM
- Scranton–Wilkes-Barre–Hazleton, PA
- El Paso, TX
- McAllen–Edinburg–Mission, TX
- Killeen–Temple, TX
- Miami–Miami Beach–Kendall, FL
- Huntsville, AL
- Naples–Immokalee–Marco Island, FL
Similar to the Top Ten, the Bottom Ten has some familiar states. There are three metros from Texas represented, two from Pennsylvania and two from Florida. Recovery in these markets is still being impacted by foreclosure sales and large REO discounts. With the current lack of inventory, the REO discount should shrink, helping these markets to recover.
About Home Value Forecast
Home Value Forecast (HVF) is brought to you by Pro Teck Valuation Services. HVF provides insight into the current and future state of the U.S. housing market, and delivers 14 market snapshot graphs from the top 30 CBSAs.
HVF is built using numerous housing and economic data sources. The top 750 CBSAs as well as data down to the ZIP code level for approximately 18,000 ZIPs are available with a corporate subscription to the service. To learn more about Home Value Forecast and Pro Teck's full suite of residential real estate valuation products, visit www.proteckservices.com. You can also find Pro Teck on Twitter at @ProTeckServices.
Reporters interested in national, regional or metro level housing data tailored to meet story needs, please email your inquiry to email@example.com.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/pro-tecks-home-value-forecast-nashvilles-housing-market-shows-good-and-bad-side-of-recovery-300414672.html
SOURCE Pro Teck Valuation Services