The West End Building in Midtown Nashville

The West End condo building in Nashville

Many people have been asking me about The West End condo building in Midtown. The questions have ranged from, “is that an apartment building?” to “is that building in foreclosure or something?”. I suppose the lack of activity in the building would cause most to assume the worst, but the truth is the opposite.

The West End is a 12 story, 72 unit, luxury condo tower that only has sold a dozen condos to discerning buyers. This building is one of Nashville’s few true luxury buildings. The average size of the condos is over 2,200 square feet and each unit features very large kitchens, baths and closets that remind me of the executive homes in Brentwood.

So why haven’t more of these condos sold? The answer is simple. This building is a victim of the real estate perfect storm.

1) The developer built this building without pre-selling the condos
2) The economy then turned sharply downward
3) The developer was slow to tell the public what this building is and how great it is
4) The developer and sales team then failed to create a “want and need” for this product in Midtown

The next question people ask me is “I am scared that the developer or project go bankrupt like Laurel Cove”. Don’t worry your pretty little heads…John Coleman Hayes can and will carry this building for years if need be. That being said, no one can carry a building indefinitely, so if the building does not sell out in the next 2-3 years, I would start to worry.

The West End is the perfect building for a couple or family who want to live a truly urban “New York” style of life. It is sexy and fast and convenient all at once. It is a life that includes frequent stops at the symphony and hopping on planes that travel to European destinations. It’s very different for Nashvillians.

The West End is considering allowing owners to rent their units. You might be able to taste the good life without having to pay the price soon and that is great news for Nashville!

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The West End Building in Midtown Nashville

The West End condo building in Nashville

Many people have been asking me about The West End condo building in Midtown. The questions have ranged from, “is that an apartment building?” to “is that building in or something?”. I suppose the lack of activity in the building would cause most to assume the worst, but the truth is the opposite.

The West End is a 12 story, 72 unit, luxury condo tower that only has sold a half dozen condos to discerning buyers. This building is one of Nashville’s few true luxury buildings. The average size of the condos is over 2,200 square feet and each unit features very large kitchens, baths and closets that remind me of the executive homes in Brentwood.

So why haven’t more of these condos sold? The answer is simple. This building is a victim of the real estate perfect storm plus a few developer mistakes.

1) The developer built this building without pre-selling the condos
2) The economy then turned sharply downward
3) The developer was slow to tell the public about the building
4) The developer and sales team failed to create a “want and need” for this product in Midtown

The next question people ask me is “I am scared that the developer or project go bankrupt like Laurel Cove.

Don’t worry your pretty little heads, John Coleman Hayes can and will carry this building for years if need be. That being said, no one can carry a building indefinitely, so if the building does not sell out in the next 3-4 years, I would start to worry.

The West End is the perfect building for a couple or family who want to live a truly urban “New York” style of life. It is sexy and fast and convenient all at once. It is a life that includes frequent stops at the symphony and hopping on planes that travel to European destinations. It’s very different for Nashvillians.

The West End is considering allowing owners to rent their condos. You might be able to taste the good life without having to pay the price soon and that is great news for Nashville.

12 Nashville Real Estate Predictions for 2009

One of the many tasks my clients expect me to be able to do is to predict what is going to happen with home prices, appraisal values, and time on the market. I only wish that I had a crystal ball to be able to advise them 100% accurately, but unfortunately, that tool does not exist. However, I would like to take a crack at predicting the 2009 real estate market in Nashville based upon aggregated information collected from dozens of trusted sources.

Prediction #1: I believe that the record will show that the Nashville real estate market actually hit a price bottom in late 2008.

Prediction #2: The rate of home sales will increase dramatically by summer of 2009, but not make a full recovery until 2010.

Prediction #3: Mortgage rates will continue to soften and the 30 year fixed rate will hover around the 5% mark.

Prediction #4: There will be a barrage of foreclosures in the second quarter of 2009, but there will also be buyers in the secondary market who will snap these up without hesitation. Nashville real estate auctions will become more numerous and will be well attended.

Prediction #5: Approximately 33% of the custom builders will be out of business by the end of 2009.

Prediction #6: Several large developers will unexpectedly go bankrupt.

Prediction #7: 1 large regional back and 2-4 local banks will cease to do business in Middle Tennessee.

Prediction #8: Rental rates and rental occupancy rates will continue to fall slightly until they stabilize and then turn upward in the September to October months.

Prediction #9: The price for finished lots will take a thrashing and several “Real Estate Vulture Funds” will acquire large groups of these lots. In turn, they will make a killing on the resale of these lots within 2 years of their purchase.

Prediction #10: The value of commercial real estate, especially retail space, will take a massive beating worse than the S&L crisis in the 1980’s.

Prediction #11: Despite the predictions above, 2009 will produce a healthier market than did 2008.

BOLD Prediction #12: By 2010 parts of Nashville (Brentwood, Green Hills, Forest Hills, Oak Hill, and a few others) will experience extreme shortages in both land and homes. Prices will temporarily skyrocket and quite a few folks will make handsome profits on property they acquired during very early 2009.

Obviously, we have been wrong before, but if you research the past 4 years of predictions from this blog, you will find that we are correct more than 75% of the time.

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12 Nashville Real Estate Predictions for 2009

One of the many tasks my clients expect me to be able to do is to predict what is going to happen with home prices, appraisal values, and time on the market. I only wish that I had a crystal ball to be able to advise them 100% accurately, but unfortunately, that tool does not exist. However, I would like to take a crack at predicting the 2009 real estate market in Nashville based upon aggregated information collected from dozens of trusted sources.

Prediction #1: I believe that the record will show that the Nashville real estate market actually hit an inventory bottom in late 2008.

Prediction #2: The rate of home sales will increase dramatically by summer of 2009, but not make a full recovery until 2010.

Prediction #3: will continue to soften and the 30 year fixed rate will hover around the 5% mark.

Prediction #4: There will be a barrage of foreclosures in the second quarter of 2009, but there will also be buyers in the secondary market who will snap these up without hesitation. Nashville real estate auctions will become more numerous and will be well attended.

Prediction #5: Approximately 33% of the custom builders will be out of business by the end of 2009.

Prediction #6: Several large developers will unexpectedly go bankrupt.

Prediction #7: 1 large regional bank and 2-4 local banks will cease to do business in Middle Tennessee.

Prediction #8: Rental rates and rental occupancy rates will continue to fall slightly until they stabilize and then turn upward in the summer.

Prediction #9: The price for finished lots will take a thrashing and several “Real Estate Vulture Funds” will acquire large groups of these lots. In turn, they will make a killing on the resale of these lots within 2-3 years of their purchase.

Prediction #10: The value of commercial real estate, especially retail space, will take a massive beating worse than the S&L crisis in the 1980’s.

Prediction #11: Despite the predictions above, 2009 will produce an overall healthier market than was 2008.

BOLD Prediction #12: By 2010 parts of Nashville (, Green Hills, Forest Hills, Oak Hill, and a few others) will experience extreme shortages in both land and homes. Prices will temporarily skyrocket and quite a few folks will make handsome profits on property they acquired during early 2009.

Obviously, we have been wrong before, but if you research the past 4 years of predictions from this blog, you will find that we are correct more than 75% of the time (shameless plug).

Bible Park USA – Can They Build It?

Question: With one of the original investors’ Hard Rock Park in Myrtle Beach filing for bankruptcy, will Bible Park USA feel the sting?

Answer: Sources say that Hard Rock Park and Bible Park USA are not joined in any legal or business sense and that Hard Rock Park’s success or lack thereof has no bearing upon Bible Park’s delivery.

Currently, Bible Park USA is set to be built on nearly 120 acres near the city of Lebanon, Tennessee (west of I-24 and north of I-840). The project is said to cost $175 million and will require city and county tax dollars to build. Completion is estimated sometime in 2011, but may be pushed back due to the current economic climate.

Question: Why does a real estate guy care about a Bible theme park?

Answer: Sheer economics. Theme parks bring jobs, visitors, tax dollars, and eventually housing needs. It’s almost like a mini convention center effect, just seasonal.

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Mortgage Rates Absolutely Plunge

mortgage rates drop largest in more than 7 years

In what was the largest 1 day drop in more than seven years, the average mortgage rate for a 30-year fixed mortgage fell to about 5.50% last night after starting the day at 6.38%.

According to Bloomberg.com:

“The central bank pledged to purchase up to $500 billion in so-called agency debt as well as up to $100 billion in direct debt of Fannie Mae and Freddie Mac, the world’s two largest mortgage buyers, and Federal Home Loan Banks. The announcement was released at 8:15 a.m. New York time yesterday.

The Fed also said it would set up a $200 billion program to support consumer and small-business loans. Together, the programs almost match the $864 billion of U.S. currency in circulation, as reported by the central bank in a Nov. 20 statement.”

It is refreshing to finally see the Fed make a material move that will actually help the Nashville real estate market rather than fundamentally unsound Wall Street companies.

Will this change help the commercial market?

It is our opinion that only a trickle down effect will be felt in the Nashville commercial market, there are just too many other deep issues at play.

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