VOL. 37 | NO. 1 | Friday, January 04, 2013
Phenomenal 2012 sales good sign for new year
As the year ends in the residential real estate market, buyers, sellers, Realtors and all associated with sales are dancing in the “sold” sign-filled streets and counting their blessings.
There was a time in the not-so-distant past in which there was concern as to whether the industry could rebound at all. In the wildest dreams of most, there was never a vision of the recovery occurring this quickly and with such might.
Some may recall 2011 when unit sales rose for the first time in four years by a modest-yet-impressive six percent. The sale data for 2012 is unavailable as this is being written, but it appears sales might be up an additional 28 percent, marking a cumulative increase of 34 percent. That 34 percent figure is important because sales never dipped that low during the recession.
Following a 13-year growth period, most experts felt the area would be forced into a slowdown, and it speaks to the economic diversity of the city, along with its leadership, that it took an international economic meltdown and national recession to slow growth.
In the late 1970s, the market slowed and ARMS (adjustable rate mortgages) were created to help combat 20 percent interest rates. As markets improved in the 1980s, 100 percent loans were introduced to stimulate the real estate growth. This caused the savings and loan downfall, and the real estate market once again crashed.
In the early 1990s, the markets returned with conventional, conforming loans, requiring some form of cash investments by the buyers. As the economy boomed, 100 percent loans reappeared and the industry rode that horse into the Great Recession.
So, what’s next? It appears the federal government has lost its zeal for subsidizing the housing industry with funny money. That’s a good thing for, as we have seen, the market can grow with conforming loans.
This 34 percent growth over the past two years supports that argument. The hope among Realtors and mortgage bankers is that the government can leave well enough alone.
U.S. Rep. Jim Cooper, who represents Tennessee’s fifth district, has stated on a number of occasions that any increase in interest rates would lead to an immediate recession, so he says the government will continue its support of the bond market, keeping rates low. That government intervention and investment is most welcome.
The guidelines to qualify for new loans are stringent and, as a result, the number of foreclosures is diminishing. The foreclosure inventory is evaporating. While it seems highly unlikely that the area can experience expansion in the 20 percent range, a return to normalcy would seem a possibility. In this region, normalcy is in the 10 percent range. With that stability returning, it should bode well for the year to come.
Sales of the Week
The sales of the week this week originate in Crieve Hall, now the community of choice for a number of Nashville’s hottest songwriters.
Those writers who do not have permanent residences there seem to spend most of their days and nights there anyway. So many in the creative community have wonderfully entertaining parties with a bond so great that they often include impromptu slumber parties.
The next day, they awaken and write songs around the yarns they wove the previous night. The writers of the television show “Nashville” have yet to discover this practice, but look for in the upcoming season.
If you are curious, drive through Crieve Hall late one night, any night, perhaps the Caldwell Hall section, until you see any number of SUVs, trucks and cars parked in unorthodox manners in the front, side and backyards. Go on in, you’ll be welcomed with open arms and you may even get a co-write.
The first sale of the week is located at 4803 East Longview Drive and was listed by Clay Kelton, who is in the Brentwood (Jim Terrell) office of Pilkerton Realtors. The home consists of 1,655 square feet, enough to sleep 18 songwriters, with three bedrooms (four songwriters each) and one and a-half baths. There is a patio if needed, and it’s covered so rain is not a factor. There also is a fire pit, a must for these bashes. There are living rooms and dens for the other six to find repose.
Scott Hudson of Bob Parks Realty represented the buyer, who paid $180,000 for the home. As is the case these days, the previous owner fared well in their investment, having paid $154,500 in 2004. It’s a split-level design, a plan shunned by Area 2 buyers but embraced in Crieve Hall since it allows the party to flow into two levels and allows the more conventionally employed spouse some privacy for much needed slumber.
The residence is situated on a flat .32-acre lot that affords plenty of privacy. Since the neighborhood was developed in 1961, there are mature trees protecting the boundaries.
The next sale is yet another split level. This home can be found at 301 Garrett Drive and was built in 1960 on a .30-acre lot that also is heavily vegetated with enormous trees. The kitchen is granite with stainless steel appliances, a plus for this breed of writers to use as they cook the magnificent dishes that their respective mamas and daddies prepared back home. From Cajun to Southern to Tex Mex, the aromas pouring from the houses are exquisite.
And trees of this age are strong enough to hold the deer carcasses. This herd of songwriters uses the grocery store only to complement their game.
And they are fresh water Jacques Cousteaus, many with more knowledge of the fish found in the local waters than area ichthyologists, one and all with the ability to fry, bake, sauté, and prepare fish dishes in exotic manners unheard of by Gordon Ramsay or Rachel Ray.
This house has 1,668 square feet, all that was needed in 1960 to raise a family of six and all that is needed in 2013 to host a soiree of 20-30 songwriters. The house has new siding, paint, carpet and a fabulous master suite for the other partner.
Of course, after three or four No. 1s, they head to the hills and build the best pools that you will ever see.
Richard Courtney is a partner with Christianson, Patterson, Courtney, and Associates and the co-author of "Come Together: The Business Wisdom of the Beatles," about some fish and chips and jam butty eating songwriters that always enjoyed a good party.