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VOL. 35 | NO. 2 | Friday, January 14, 2011

2009-10 home sale comparisons offer hope

By Bill Lewis

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No one is saying 2010 was the end of the housing crisis in Nashville and Williamson County, but some in the real estate industry are hopeful that year-end sales figures indicate last year was, at least, the beginning of the end.

“Like any true bottom, no one is sure. I think we’re there in terms of it not getting much lower,” says Lane Gerhardt, with Franklin American Mortgage Co.

But no one can say when, or how robustly, the housing market might rebound. And the market still faces tremendous uncertainties in the year ahead, he says.

Instead of falling, as in recent years, sales and prices in 2010 were almost unchanged from 2009 levels in Nashville and Williamson County, according to a report released by Chandler Reports. More information, including sales broken down by zip code, sale price range, bank vs. non-bank and new vs. existing, as well as information on individual sales, is available at chandlerreports.com.

In Nashville, 9,312 homes were sold in 2010, compared with 9,328 in 2009. The average price last year was $183,595. In 2009 the average price was $184,804.

In Williamson County, 3,149 houses were sold in 2010 compared with 3,146 in 2009. The average price last year was $361,456. In 2009 the average price was $361,405.

In an industry driven by growth in sales and prices, such flat results might not be considered good news in an ordinary year. But with the economy still mired in a recession and unemployment above 9 percent in Tennessee, the news was welcome.

“Flat is better than going over a precipice,” says Frances Garner, a Realtor with Parks Properties in Green Hills.

Sales were still far below their levels in 2006, when the market was at its height, but there are signs of hope, says Shawn Meehan, president of Birchfield Mortgage in Nashville.

“Without being able to say for sure that we’ve turned a corner, it feels like it. There’s no better time to buy a house, the (interest) rates and the deals that are out there,” he says.

There are still dark clouds hanging over the market. Meehan points out sales fell sharply at the end of 2010 after the federal tax credit for home buyers expired. First-time buyers could qualify for an $8,000 credit. Repeat buyers could qualify for $6,500.

“When that went away you saw huge declines month to month,” he says.

The tax credit was intended to stimulate housing sales and attract new buyers. Those in the industry wonder whether it actually cannibalized future sales by encouraging people who were already looking for a house to move up their schedule. If so, 2010’s encouraging numbers could be an illusion and the recovery would still be somewhere in the future.

“Since buyers were facing a tax deadline, there was a rush. After that deadline, it slowed down,” says Jason Murphy, administrative manger with Crye-Leike in Nashville. “It made sales artificially high.

But the market seemed to be more stable last year, giving signs of hope that it might be close to its floor, he says.

“We wonder if it’s near the bottom,” Murphy says.

“Whether it (the credit) brought a lot of people to the table, I don’t know. It certainly moved up the timetable for a lot of people. If they were going to buy in the next year, they put their foot on the gas,” says Scott Whelan, a mortgage loan specialist with F&M Mortgage.

The market faces other uncertainties, as well. Interest rates have risen for several months and are no longer at their historic lows. But they are still around 5 percent or lower for buyers with good credit. Prices aren’t expected to go down much further, but sales may still lag if some potential buyers hold out for a better deal.

And, Gerhardt says, the market still has to absorb the inventory of houses that were foreclosed by mortgage lenders.

“Any turnaround is going to be slow,” says Gerhardt.

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TNLedger.com Knoxville Editon
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0