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VOL. 41 | NO. 42 | Friday, October 20, 2017

House on the market too long? It’s probably the price

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As the autumn air finally descends, owners of houses that have accumulated significant days on the market might want to consider reducing the price.

Even with last month setting the record for the most homes ever sold in a September, according to the Greater Nashville Realtors, the number of pending sales for this September is 3,292, slightly above the 3,234 sales that were pending last year at this time. The pending number has been running some 300-400 homes ahead of last year for most of this year.

Of course, this is a time during which the market is devouring itself with inventory dropping from 10,350 in Sept. 2016 to 9,358 this year. Sales were up 3.5 percent for the third quarter and 2 percent for September only.

What is concerning for some sellers is the fact that their houses have not sold. In this low inventory/high sales era, the issue that buyers are having with some of the houses is price. As mentioned in past columns, condition is the driving force in this market, more so than ever before.

If the house is not what most buyers would consider move-in ready, the price must be reduced. The current disparity between new construction, renovated houses and those needing work is higher than in the past due mainly to the high cost of construction.

If there are two homes, same square footage, next door to each other – one in perfect condition and one needing work – the new house will sell first. For this example, let’s say it sold for $450,000.

In the past, the second home could get bids from contractors to determine how much it would take to make their house compare to new construction.

It costs about $75,000 to demolish and rebuild a kitchen, and about the same for an owner’s suite. Throw in $25,000 for floors, roof, HVAC, etc., and you have $175,000 for renovation.

That means the house has a value of about $325,000. The lot might be worth more. It is certainly not worth the risk as contractors sometimes run over budget and can take longer than they anticipated.

Also, many contractors will not accept a job that small.

Price reduction is the only solution. With construction prices high, the reductions must reflect those costs.

Sale of the Week

As East Nashville blossomed in the 1990s, Inglewood was content to sit on the sideline as a spectator and enjoy the growth of her sister neighborhood and the spoils of affordability, restoration and renovation under the radar.

The area is now a full-blown participant in gentrification, as proven by the house at 1017 McMahan Avenue, which recently sold for $439,900, or $202 per square foot for those who prefer the square-foot quotient.

With 2,180 square feet and three bedrooms with two full bathrooms, the house had sold last September for $422,750. One year later – and for $17,150 more – it sold in two days.

MacKenzie Strawn (Scout Properties) listed the home and noted it is “the perfect Inglewood charmer,” a 1940s cottage with a yard full of mature trees.

Utilizing a relatively new barometer of energy efficiency, the e-score, Strawn cited that the house had achieved a score of “9/10,” which she added is “very energy-efficient.” The schools for this section of Inglewood fall into the “desirable” category with Hattie Cotton Elementary, a school that played a role in the Nashville civil rights movement.

Hattie Cotton Elementary was named for a Nashville educator who had taught the chairman of the board of education, William Hume, as in Hume Fogg. It opened in 1950 and was one of six city schools to be integrated in 1957.

On the first day of school that year, 19 six-year-old African American students attempted to enroll in school, and four were turned down for “administrative reasons.” Hattie B. Cotton admitted a 6-year-old girl.

That night, following the first day of classes, the school was bombed in a blast so ferocious that it shook buildings throughout the area, shattering windows and hurling shrapnel for blocks. No one was arrested for the blast, and the young girl’s parents pulled her from Hattie B. Cotton and enrolled her in Head.

Today Hattie B. Cotton is a STEM magnet school, with the acronym STEM representing Science, Technology, Engineering and Math. The original school building was intentionally demolished to make way for a new building in 1990.

After Hattie B. Cotton, area students attend Gra-Mor Middle School and then Maplewood Comprehensive High School.

Recognizing a renovated home in an established neighborhood with high-scoring schools, Allison Aufdenkamp delivered a buyer to the deal and beat her competitors to the door.

Richard Courtney is a licensed real broker with Christianson, Patterson, Courtney, and Associates and can be reached at richardcourtney.com.

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