Real estate market booming but inventory is limited - WSMV Channel 4

Real estate market booming but inventory is limited

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NASHVILLE, TN (WSMV) -

The Dow Jones Industrial Average closed in record territory again Wednesday, and experts agree the economy seems to be improving, including the real estate market.

So could now be the best time to buy?

"Right now, the market in Greater Nashville and Middle Tennessee is very much encouraging and very much on a positive track," said Don Klein, CEO of the Greater Nashville Association of Realtors.

Stocks continue to climb to a series of record highs this year, and in Nashville, the optimism continues to buoy home sales.

"It's building back at a sustainable rate, and that's really important," Klein said.

But for all the good news, challenges remain - namely, inventory. There might not be enough homes for willing buyers, a problem nationwide.

"We have very high demand and very low supply. That means home prices are gonna rise very quickly for the foreseeable future," said CNBC Real Estate Correspondent Diana Olick.

Another issue remains interest rates.

The average on a 30-year fixed mortgage hit 3.9 percent Wednesday - the highest rate in a year.

"That kind of news will likely move some people off the fence who have kind of been waiting around and wondering, you know, 'Are they going to go lower? Are they going to stay the same?'" Klein said.

In the past week, applications for new mortgage loans and refinancing dropped, signaling a reality check of sorts for those who specialize in optimism.

"You know, let's not get too fast before we start taking things out from underneath the economy. It's still needing to do some healing and recovering from where I see it," Klein said.

As the number of home sales jumps, so did the prices for those homes.

In April 2012, the median for a single-family home in Greater Nashville was $165,120.

This April, it jumped to $185,000.

A lot of sellers seem to be waiting to maximize their return, which only further limits the number of homes for sale.

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