Nashville Mortgage Rates Move Lower

Mortgage Rates 9-15-09

Freddie Mac reported a dip in borrowing costs for long-term mortgages this week. According to the federally chartered company, the average interest on 30-year loans fell to 5.08 percent from 5.14 percent a week ago; while rates on 15-year loans came down to 4.54 percent from 4.58 percent. Adjustable-rate mortgages declined as well, with the one-year ARM sliding to 4.62 percent from 4.69 percent and the five-year ARM moving down to 4.59 percent from 4.67 percent.

Banks are still leery of investment purchasers and are typically hitting the above rates by a full point. Lenders are really after the crème of the crop primary residence buyers in Nashville who have good credit scores and a decent amount of monies in reserve. The good news is that most banks are loosening their down payment requirements and are starting to look at second home buyers as humans again.

Average Tennessee Closing Costs Going Up recently conducted its annual national survey of average origination, title, and closing costs, for a representative $200,000 loan, assuming a 20 percent down payment and good credit.

Nationwide, the average origination and title fees on a $200,000 mortgage this year totaled $2,732, according to Bankrate’s annual survey of closing costs. The fees in the survey don’t include taxes, insurance or prepaid items such as prorated interest or homeowner association dues.

So how did do, and where did our state rank nationally?

Tennessee ranked 12th highest in the nation (a significant jump from our 24th place ranking in 2008) with total average costs of $2,901 … $169 higher than the national average. Of course, $169 in the grand scheme of a $200,000 home purchase is not that significant.


Icon Nashville Condo Prices Going Up

If you are one of those folks who thought that condo prices would continue fall this year, here is a piece of news that will surprise you: The developers of the Icon in the Gulch, Bristol Development and MarketStreet Enterprises, are raising prices today.

Specifically, the Icon is raising prices on all of the downtown facing 1 bedroom and 2 bedroom condos in the building. Looking at the total closings in the building, more than 60% of the downtown facing tower condos have closed and an unknown number have new contracts that will most likely push the total over 65% closed.

According to Brian Merrill, President of condo sales for the Bristol Group, “sales have been very strong over the past several months.” I should say that statement may one of the larger understatements of the season considering that the Icon closed 13 condos in August alone, tripling their nearest competition.

Naysayers will surely question the longevity of this price increase, but after personally selling 4 downtown facing condos in the Icon within the past month, I have seen firsthand how difficult negotiating has become. The developers are still flexible on the residential mid-rise section of the building as well as in the tower section facing the Terrazzo. But, if you wanted that panoramic view of downtown at the lowest possible price…you just officially missed the boat.

If you would like to see all 171 closings in the Icon, please reply below and Grant Hammond will contact you within 24 hours.

The last 5 closings in the Icon in the Gulch

Unit No. Name Price Floor Plan Sqaure Feet Price/Ft
1716 M. Howell $235,720 Eclipse 710 $332.00
1511 J. Bechke $315,000 Skyline 945 $333.33
1611 D. Zobl $315,000 Skyline 945 $333.33
1415 Y. Redhi $425,000 Panorama 1,298 $327.43
1011 T. Morris $310,000 Skyline 945 $328.04


View all condos for sale in the Icon in the Gulch

Tollgate Village in Thompsons Station Rumor

The previous content was removed at the request of James Carbine.

The only factual part of the story I feel comfortable posting at this point is the sales summary from the local MLS (I apologize to those sources who brought the original story to light, but I am not going to risk a frivolous lawsuit):

As of September 12, 2009: There are 21 homes listed for sale on the MLS, one of which shows an offer made. There are also 2 homes pending. Through the first 8.5 months of the year, only 4 homes have closed for an average $477,062 or $114/ft. One of these homes was a , one was sold for $140,000 less than original listing price and the other 2 were pre-sales. These prices represent rather large discounts from the year before when the 18 closed sales averaged $140/ft.

The story appears different in their condo/townhome product. Currently, there are only 4 listed for sale, 7 pending and 3 that have closed in 2009. Three of the active listings are representative ‘to be built’ listings.

Update 9/25/2009 – Thompson’s Station Officials sue Tollgate Farms

According to the Tennessean: “On Tuesday, Thompson’s Station officials filed a in Williamson County Chancery Court against Tollgate Farms, which is being developed by James Carbine. The complaint states that the development is required to dedicate land to the town for use as a wastewater treatment area. The town demanded that Tollgate convey the land on Aug. 24, but that hasn’t happened, according to the suit. The lawsuit also states that several roads in the subdivision are in need of repair.” – (thanks to Edgar for submitting the story)

* A reminder to those who wish to publish rebuttals. All of those will be published except for those who do not identify themselves. If you are willing to say it, you must stand behind it as I do.

August 2009 Nashville Real Estate Market Analysis

2009 Percent Change AugustThe Middle Tennessee MLS (Realtracs) just released August 2009 stats. The following graph and analysis are based upon the residential single family homes and condos market only. As you may recall in July, closings and prices increased while total inventory was on the fall. Did August continue to buck the national trend or is it time for our typical seasonal fall?

Total Inventory (Okay, Getting Better)
Inventory levels continued to decrease in August, down 1.22 percent from July, but still up 8.86 percent since January. There were a total of 17,318 active homes and condos in Nashville last month, compared to August 2008 when there were 18,211 on the market, an encouraging year over year drop of 5.16 percent.

Pending Sales (Excellent, Improving)
Pending sales in Nashville are up rather significantly in 2009. Since January, pending sales have soared 70.12 percent higher. Also, for the first time this year, total pending sales are higher than their levels a year ago. August 2009 levels are 1.45 percent higher than August 2008 when 2,149 total properties were pending. This is very, very surprising news and represents a 12 percent month over month turnaround in addition to being a new 2009 benchmark high.

Closed Sales (Good, But Falling)
For the first time in 2009, total closings did not experience a month over month gain. Since January closings have risen 113.7 percent, but this number does represent a 13 drop from July. Compared to the same period in 2008, year over year closings have only decreased 9.97 percent when 2,172 properties closed. In addition, we have narrowed the gap over 2008 by another 2.1 percent during the past month. The fall in closings can be directly attributed to our natural seasonal drop, it is the 2.1 percent narrowing of the year over year gap that is encouraging.

Median Prices (Worse)
August saw the largest, and first since March, month over month price drop of 2009, dropping a full 8.25 percent to $158,376. Part of this drop can be directly attributed to first time home buyers and the other to the increasing numbers of short sales and foreclosures. The median price is down 9.75 percent compared August 2008 when the median price was $175,504.

Months of Inventory (Steady)
Based on Augusts’ closed sales, it would take 8.77 months to clear it out our excess inventory. Based on pending sales (contracts accepted but not closed yet) it would only take 7.946 months. Our absorption rate is significantly better over the past 3 months when we had 10.2 months of inventory based upon the same calculations – an 18% burn off decrease.

As I begin to take seasonality into account, I am seeing that the second half of 2009 is shaping up to be stronger than the second half of 2008. Yes total closings fell, yes the median price took at hit, but the graph clearly indicates that our overall market health is improving. We do expect the median price to continue to bottom feed for the remainder of the year as less million dollar properties are trading hands.

Quite a few banks and lenders will be taking back properties this Fall. Look for median prices to decrease and closings/pending to increase, especially in the year over year analysis.

Brentwood Homes Short Sale and Grant Hammond

Governors Club ForeclosureThis article entitled “High-end homes take a hit” appeared in the Williamson AM on September the 11th, 2009. The author is Nancy Mueller:

BRENTWOOD – Short sales and foreclosure sales are now being seen in some of Williamson County’s most expensive neighborhoods.

During the first week of September, there were four short sales available in the Governor’s Club, plus one foreclosure. Down Concord Road at Hampton Reserve, there was one foreclosure and one short sale.

These distressed situations translate into some excellent buying opportunities.

“If you are an executive who is moving to Nashville and you want a $1.5 million house, you only have to spend a million point two,” said Grant Hammond, a Cool Springs-based agent who is launching a Web site called that will list short sales and foreclosure sales in the Nashville area.

But even Hammond may be under-selling some of the deals to be had in the upscale neighborhoods.

A five-bedroom, custom-built home that backs up to the second hole at the Governors Club golf course is a “short sale steal” according to agent Vanessa Stalets. The owners’ asking price is $1.25 million. Stalets says the owners paid $2 million for the house, which was built in 2005 and is at 217 Governors Club Way.

Another Governors Club short sale is a 6,000-square-foot home at 4 Spyglass Hill that was listed for $1,398,000 in May. The price dropped to $1,249,000 and then to $1,099,000. On Sept. 2, it dropped again to $1,050,000.

The house has four bedrooms, four bathrooms and two powder rooms and, according to Hammond, “another rare feature” – gap equity.

“This is going to be a heck of a deal for the just-under million dollar buyer,” he said.

Some fear stigma of cuts

The short sales and foreclosure sales in Hampton Reserve and Governors Club are among 111 that Hammond found while researching information for his new Web site. There is no central clearinghouse or system for finding such sales, and sometimes listing agents do not promote the nature of the price cuts.

“There is some debate that the words ‘short sale’ or ‘foreclosure’ stigmatize the property,” Hammond said. “A buyer may assume that there is something wrong with the property itself, beyond the financing.”

That is not necessarily the case, although it is possible that such properties might not have been maintained normally and buyers should be prepared for the fact that if the seller is a bank, it may be pointless to negotiate for upgrades or home improvements within the offer to buy.

Additional deals in Governors Club and Hampton Reserve include:

• 2 InnisBrook Lane, a short sale, has 4,735 square feet, four bedrooms, 3½ baths, a pool and hot tub. Built in 2002, its asking price is $889,000.

• 9554 Sanctuary Place, a foreclosure, has 6,988 square feet and was built in 2006. With five bedrooms, 5½ baths, a four-car garage and an elevator, it is listed for $999,999. It sold in 2007 for $1.345 million.

• 9576 Hampton Reserve, a short sale, is listed for $1,295,000. It’s a lot of money, but this house sold in September 2005 for $1,525,000. It has 7,782 square feet, five bedrooms, five bathrooms, two powder rooms, a theater room, a stocked wine cellar, a five-car garage and an elevator.

With a little effort, high-end buyers can sniff out additional deals these days, such as the mansion at 1216 Waterstone Boulevard in Laurelbrooke.

With more than 11,000 square feet, an elevator, pool and six fireplaces, it is listed for $2,399,000. According to the agent, the sellers invested $2.8 million in this house, which was built in 2006.

• 10 Sawgrass Lane, a short sale, is a 4,642-square-foot home built in 2006 listed for $749,000, down from $930,000. It has five bedrooms, 4½ baths.

• 91 Governors Way, a foreclosure, has 6,242 square feet with five bedrooms, five baths and three half-baths. It has a full basement. Built in 2007, its price is $749,900.

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