Like many markets in the South, the Nashville real estate market has experienced a severe repositioning since the onslaught of the U.S. housing market collapse brought about by the subprime mortgage crisis. Since the beginning of the crisis, the Nashville real estate market has seen declines in home prices, lower sales volume, higher inventory and more foreclosures as homeowners grapple with the effects of the recession.

Recently, however, real estate in Nashville has begun to stabilize out slightly, with smaller fluctuations in prices and sales volume. In October, inventory continued to clear out, much being taken off the market as home buyers continued to cash in on the government rebate program offering first-time buyers who qualify up to $8,000 in tax rebates. The rebate has been extended to more potential buyers and is expected to continue to buoy the market. In Nashville, the inventory level was down 2.4% in October from September. The inventory was down 3.58% from 2008 levels.

Homes for sale in Nashville are still seeing low sales prices, however, compared with the highs of 2005 and 2006. October’s median price stood at $157,761, slightly changed from September’s $157,863, showing that the price levels may be stabilizing. The inventory stands currently at an eight-month supply, down from October of 2008’s 10.3-month supply.

Sales were spurred in October. Since January, according to local realtor Grant Hammond, pending sales have skyrocketed by more than 60%. Sales volume in October was 40% higher than at  the same time last year, an encouraging sign that the market is certainly active. Closed sales in October were up nearly 20%.