Yours Truely Featured in The Tennessean Newspaper

The Tennessean Article Featuring Grant HammondBusiness column: Housing slump pushes prices down in Middle Tennessee suburbs

Appeared in The Tennessean on July 14, 2008, written by Chas Sisk:

“Home sellers from New England to Southern California have been slashing prices this year, and many people have held that before long, local homeowners would capitulate as well.

New data from the Greater Nashville Association of Realtors seemed to prove them right last week. The median price of a single-family home sold in June was a sharp 6 percent less than in the same month a year ago.

But not all Middle Tennessee homeowners are feeling pressure to accept less for their homes.
According to Richard Exton, principal appraiser at Manier and Exton, a gap has opened between sellers in Davidson County and those in other parts of the region.

Average asking prices for single-family homes in six of Davidson County’s eight real estate zones are actually up, Exton says, but average asking prices are down in practically every major suburban community.

In five towns — Franklin, Mt. Juliet, Lebanon, Columbia and Dickson — homeowners have come off their prices by more than 10 percent.

“It’s most notable in areas where there’s been a lot of new construction,” Exton said. “It appears they’re not getting their money back out of it and having to sell it for less.”

Buyers settle for less

Lawn signs declaring price cuts abound in the suburbs. But prior to June, lower asking prices had not translated into a decline in home values across the region.

Exton’s data may help explain that discrepancy. Davidson County, which accounts for about one-third of the region’s home sales, appears to be stabilizing the market.

So why the shift in the suburbs? Builders may be taking the lead. They’re far more apt to accept less profit than sellers who have their life savings tied up in a home. It could also be higher gas prices or the demographics of Nashville’s urban core.

But just as likely, it’s a change in the mentality of suburban buyers.

A few years ago, with valuations on the rise and money cheap to borrow, many were eager to stretch into a bigger home. Now, with valuations unlikely to take off again and banks avoiding risky loans, more suburban homebuyers are settling for less.

That has put downward pressure on asking and closing prices, said Grant Hammond, a real estate agent who deals in high-priced homes.

“A family that was willing to stretch to get into a $900,000 home is just making the sound economic decision for their family not to do so,” he said.

In Williamson County, lower asking prices have led to a 3 percent decline in closing prices so far this year. That means the average homeowner got about $10,000 less than his neighbors did a year ago.

But with the median price for a home in Williamson County still at $370,000, buyers there shouldn’t think they’ve gotten a huge bargain. Three years ago, the median price of a home in Williamson was $315,482 — more than $50,000 less than today.

So don’t pity the suburban home seller quite yet. That seller may be getting less than he or she wanted. But after years of gains, many are still pocketing profits.”

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Yours Truely Featured in The Tennessean Newspaper

The Tennessean Article Featuring Grant HammondBusiness column: Housing slump pushes prices down in Middle Tennessee suburbs

Appeared in The Tennessean on July 14, 2008, written by Chas Sisk:

“Home sellers from New England to Southern California have been slashing prices this year, and many people have held that before long, local homeowners would capitulate as well.

New data from the Greater Nashville Association of Realtors seemed to prove them right last week. The median price of a single-family home sold in June was a sharp 6 percent less than in the same month a year ago.

But not all Middle Tennessee homeowners are feeling pressure to accept less for their homes.
According to Richard Exton, principal appraiser at Manier and Exton, a gap has opened between sellers in Davidson County and those in other parts of the region.

Average asking prices for single-family homes in six of Davidson County’s eight real estate zones are actually up, Exton says, but average asking prices are down in practically every major suburban community.

In five towns — Franklin, Mt. Juliet, Lebanon, Columbia and Dickson — homeowners have come off their prices by more than 10 percent.

“It’s most notable in areas where there’s been a lot of new construction,” Exton said. “It appears they’re not getting their money back out of it and having to sell it for less.”

Buyers settle for less

Lawn signs declaring price cuts abound in the suburbs. But prior to June, lower asking prices had not translated into a decline in home values across the region.

Exton’s data may help explain that discrepancy. Davidson County, which accounts for about one-third of the region’s home sales, appears to be stabilizing the market.

So why the shift in the suburbs? Builders may be taking the lead. They’re far more apt to accept less profit than sellers who have their life savings tied up in a home. It could also be higher gas prices or the demographics of Nashville’s urban core.

But just as likely, it’s a change in the mentality of suburban buyers.

A few years ago, with valuations on the rise and money cheap to borrow, many were eager to stretch into a bigger home. Now, with valuations unlikely to take off again and banks avoiding risky loans, more suburban homebuyers are settling for less.

That has put downward pressure on asking and closing prices, said Grant Hammond, a real estate agent who deals in high-priced homes.

“A family that was willing to stretch to get into a $900,000 home is just making the sound economic decision for their family not to do so,” he said.

In Williamson County, lower asking prices have led to a 3 percent decline in closing prices so far this year. That means the average homeowner got about $10,000 less than his neighbors did a year ago.

But with the median price for a home in Williamson County still at $370,000, buyers there shouldn’t think they’ve gotten a huge bargain. Three years ago, the median price of a home in Williamson was $315,482 — more than $50,000 less than today.

So don’t pity the suburban home seller quite yet. That seller may be getting less than he or she wanted. But after years of gains, many are still pocketing profits.”

If you you liked this post, you might also like:
Foreclosure in Historic East Nashville
Leipers Fork Estate Home Foreclosures
Remarkable Homes Team Now Has Corporate Housing

“For Sale” Becoming “For Rent”

With the national housing market in the tank, demand for rental property is increasing. But it looks like the supply of apartments also is rising quickly despite little new apartment construction.

According to a new report from Goldman Sachs’ U.S. Economic Research Group, about 1 million for-sale units were converted to rentals during the past two years (These are existing for-sale properties that are now being rented out, not new rental units). The new supply of rentals has so far kept rent inflation in check.

But the apartments could easily be put back on the for-sale market when home prices stabilize and that could slow the recovery, the report said.

“The shift of houses toward rental uses also points to another problem for the real estate market: a large amount of ’shadow’ housing supply that could come back into the market at signs of improvement. Just as housing converted to rental, it can be converted back if demand shifts. Signs of price stabilization, or improvement, would be greeted by owners as an opportunity to bring homes back onto the for-purchase market. In addition to rental conversions, over the past two years there have been sharp increases in the number of homes either ‘held off the market for other reasons’ or ’seasonally vacant’; the combined increases in the two compared to the start of 2006 is nearly a million homes. These sources of shadow supply make a robust ‘V’ shaped housing market recovery unlikely.”

[SOURCE: Business Week]

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“For Sale” Becoming “For Rent”

With the national housing market in the tank, demand for rental property is increasing. But it looks like the supply of apartments also is rising quickly despite little new apartment construction.

According to a new report from Goldman Sachs’ U.S. Economic Research Group, about 1 million for-sale units were converted to rentals during the past two years (These are existing for-sale properties that are now being rented out, not new rental units). The new supply of rentals has so far kept rent inflation in check.

But the apartments could easily be put back on the for-sale market when home prices stabilize and that could slow the recovery, the report said.

“The shift of houses toward rental uses also points to another problem for the real estate market: a large amount of ’shadow’ housing supply that could come back into the market at signs of improvement. Just as housing converted to rental, it can be converted back if demand shifts. Signs of price stabilization, or improvement, would be greeted by owners as an opportunity to bring homes back onto the for-purchase market. In addition to rental conversions, over the past two years there have been sharp increases in the number of homes either ‘held off the market for other reasons’ or ’seasonally vacant’; the combined increases in the two compared to the start of 2006 is nearly a million homes. These sources of shadow supply make a robust ‘V’ shaped housing market recovery unlikely.”

[SOURCE: Business Week]

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5th and Main Condos are Taking Offers
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Mid-Year Nashville Market Update

Greater Nashville Association of Realtors

MID-YEAR CLOSINGS REMAIN CONSISTENT; CONDOMINIUM MARKET SETS NEW PRICE RECORD

According to the Greater Nashville Association of Realtors (GNAR):

There were 2,591 homes sold in the month of June, which is down 27.8% compared to the 3,588 closings reported for June of 2007.

Second-quarter closings are also down, with 7,234 sales reported. that is a 28.2% decrease compared to the second quarter of 2007.

Year-to-date closings are also down 28%, with 12,997 sales reported so far in 2008, compared with 18,070 reported through mid-year 2007.

The median price for a single-family home during June was $183,615 and for a condominium is was $185,500. This marks the first time that the median price of a condo exceeded that of a single-family home. Last year’s median prices for June were $196,000 for single-family and $155,800 for condominiums.

Inventory is now 24,935, compared with 21,236 at the end of June in 2007. There were 2,684 sales pending at the end of June and single-family homes were on the market for an average of 76 days.

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Mid-Year Nashville Market Update

Greater Nashville Association of Realtors

MID-YEAR CLOSINGS REMAIN CONSISTENT; CONDOMINIUM MARKET SETS NEW PRICE RECORD

According to the Greater Nashville Association of Realtors (GNAR):

There were 2,591 homes sold in the month of June, which is down 27.8% compared to the 3,588 closings reported for June of 2007.

Second-quarter closings are also down, with 7,234 sales reported. that is a 28.2% decrease compared to the second quarter of 2007.

Year-to-date closings are also down 28%, with 12,997 sales reported so far in 2008, compared with 18,070 reported through mid-year 2007.

The median price for a single-family home during June was $183,615 and for a condominium is was $185,500. This marks the first time that the median price of a condo exceeded that of a single-family home. Last year’s median prices for June were $196,000 for single-family and $155,800 for condominiums.

Inventory is now 24,935, compared with 21,236 at the end of June in 2007. There were 2,684 sales pending at the end of June and single-family homes were on the market for an average of 76 days.

If you enjoyed this post, you may also enjoy:
Nashville Housing Inventory Declines
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Nashville Housing Market – July Report

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