NASHVILLE, Tenn. (WKRN) – Housing prices could be dropping in Nashville in the next two years, according to researchers with one mortgage company.
A study from Arch Mortgage Insurance Company shows there’s a 35 percent chance we’ll see home prices fall by 2019.
“It’s driven by the fact that home prices are expensive relative to their past for Nashville, so we think home prices relative to income, relative to their history, are about 70 percent higher than normal, so that’s just a red flag, and so the model’s picking that up,” said Ralph De Franco, the company’s chief economist.
Right now, home prices are growing at some of the fastest rates in the country, more than 10 percent in the last year.
That means the demand is here at the moment, but the question is—will it stay that way?
“Prices are expensive over their past, and they’re high because of strong demand at the moment, but eventually builders can respond by expending the supply, so that puts some prices at some risk of slowing down, down the road,” De Franco said.
So housing prices may drop in the next couple of years, but right now, we should expect prices to remain steady because the housing market in Nashville is still red hot.