While it’s not new news that Nashville’s housing market is booming, the figures that illustrate the boom are still impressive. In the first quarter of 2022 alone, for example, Tennessee homeowners saw an average increase of $66,000 in their homes’ equities. In the last five years, homes’ values have increased a staggering 85%!
For homeowners who bought-in to the market before the growth surge, this has translated to incredible appreciation on their initial investment.
Unsurprisingly, plenty of homeowners have considered selling their homes to cash-out their profit, especially those who now qualify as luxury homeowners.
Nashville Luxury Homes
A luxury home in Nashville begins with the threshold of $2 million in value. In the Nashville area, there have been 275 luxury home sales within the last year (2021-2022), with the median sales price being $3.5 million.
What’s more, Nashville currently is the leading city in the U.S. for luxury housing, surpassing cities like Charleston, Hilton Head, and even Tampa. Tennessee’s low property taxes, lack of income tax, and Nashville’s growing appeal as a supernova city have all made the metro a desirable place for luxury home buyers to invest – and get more for their money. Residents moving from California, for example, can afford almost twice as much home as they could in the Golden State.
Recent Shifts in Nashville’s Housing Market
Even for buyers who aren’t interested in luxury homes, per say, Nashville has proven to offer incredible value when it comes to investing in real estate. Here’s proof: By the third quarter of 2021, the median sale price of Nashville homes was $345,000 (Sept. 2021). Now, it is $498,700 (May 2022)!
Unlike during 2020 and 2021, the supply of Nashville homes is slowly on the rise. At one point in 2022, new listings totalled 1,167 (a 21.9% increase), giving interested buyers more time and more options when it comes to finding and making offers on their dream homes. Still, Nashville is a seller’s market!
Selling Your Nashville Home?
Are you a Nashville resident looking to sell your home? Before you jump in head-first, you will want to consult a real estate lawyer for several reasons:
Avoid Capital Gains Tax
If your home has appreciated in value by leaps and bounds, and especially if your home now qualifies as a luxury home, you may be subject to the capital gains tax. What is the capital gains tax? It’s a tax payment that must be paid when a certain profit is made on a home sale. However, if you meet certain requirements, you might be able to avoid the capital gains tax. For single homeowners, this can mean a tax break on earnings of $250,000 in profit for single homeowners, and a tax break on $500,000 in profit for homeowners who are married (filing jointly).
Your luxury home is an asset, and not one that you want to take lightly. Closing on your property may, in fact, be one of the largest financial transactions you make in your life. A real estate attorney can play a critical role, first and foremost in the early stages of the sale and later in the closing and final transactions.
From reviewing contracts to home inspections, a luxury real estate lawyer will be thorough and actively looking for flaws. A Nashville real estate attorney also will know how to navigate and interpret laws that are unique to the state.
Rest Easy at Closing
Selling a luxury home involves a complex network of legal documents, and the closing process is one of the most critical aspects of the entire sale. Entrusting a lawyer to review and assess the necessary documentation (deeds, settlement agreements, titles, etc.), as well as oversee the multi-step process, can not only take the stress and burden off your plate, but help assure you that your affairs are in order.