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VOL. 36 | NO. 10 | Friday, March 9, 2012

Midstate's hottest markets found near auto assembly plants

By Bill Lewis

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If you want to know where houses are being bought and sold the fastest in Middle Tennessee, take a look at the cars on the road around you.

If their nameplates say Nissan or Chevrolet, you have your first clue.

Nissan makes cars in Smyrna. General Motors selected Spring Hill as the place where it will make the hot-selling Chevrolet Equinox crossover and other vehicles.

The two companies are hiring thousands of workers, many of whom can be expected to buy houses nearby. In fact, some already have.

“Nissan’s expansion has really helped” the housing market in Smyrna, Murfreesboro and throughout Rutherford County, says Sheila Prince a broker with Bob Parks Realty’s Smyrna office. “It’s enabled families to buy where they want to” instead of renting or commuting.

Nissan is creating 2,300 jobs in Smyrna, where it makes the $40,000-plus Infiniti JX crossover vehicle and plans to begin manufacturing the all-electric Leaf in early 2013. The company projects it will have about 5,800 employees in Smyrna.

GM’s decision to bring Equinox production to Spring Hill, where it once made Saturns, is creating 1,900 new jobs. The company anticipates 3,600 total workers.

Rutherford County and Spring Hill had two of the Midstate’s strongest real estate markets in January, a survey by Chandler Reports shows.

Across Rutherford County, home sales were almost 42 percent higher in the first month of 2012 than in January 2011. In Smyrna, sales were up more than 39 percent, to 46 closings, but the average price declined to $110,144. A year ago the average price was $143,799.

Foreclosures and short sales in which the home is sold for less than the amount owed on the mortgage are putting downward pressure on prices, Prince says.

“There are more sales and more buyers, but for homes that have the best price,” she says. “The market is a price contest first and a beauty contest second.”

Rutherford County is also attracting value shoppers who are looking for lower prices than Wilson and Williamson counties. In fact, Prince says, home buyers throughout Rutherford County see it as an affordable alternative to neighboring counties.

Sales in Murfreesboro were up more than 96 percent in the 37129 zip code – an area bordered by Nissan to the west, Hwy. 231 to the east, and I-24/SR 840 to the south – where the average house cost was $170,062 in January 2012. That’s a 2.1 percent increase over last year’s average price.

In the 37130 zip code – Murfreesboro, east of Hwy. 231 – sales were up 77 percent and prices increased nearly 8 percent to $163,347. The city is home to Middle Tennessee State University, the state’s largest undergraduate university, a large Department of Veterans Affairs hospital, a major State Farm insurance company operation and other employers.

The average home price in Rutherford County was $144,880 at the beginning of this year, well below the price in surrounding counties. The average price in Williamson County it was $370,902, followed by Davidson ($187,282) and Wilson ($183,710).

“Rutherford is “much more affordable,” Prince says. “There are jobs in Rutherford County, shopping, entertainment. You don’t have to leave Rutherford County unless you want to now.”

Spring Hill’s home sales jumped dramatically – 150 percent – in January, Chandler Reports data show. There were 35 closings, compared with 14 sales in January 2011. The average price rose more than 7 percent to $230,864.

The GM factory is located on the Maury County side of Spring Hill, but many of the city’s neighborhoods are located in Williamson County.

As development moves south along Interstate 65, another Williamson County community is poised for growth. In tiny Thompson’s Station, located between Spring Hill and Franklin, 16 homes were sold in January. While that is a small number, it was 60 percent higher than a year earlier. The average price was up nearly 3 percent to $185,000.

Growth will be energized even more later this year when State Route 840 connects I-65 with I-40 near Dickson west of Nashville, says Greg Langeliers, Thompson’s Station’s city administrator.

“We’re going to be a competitor” for residential growth, he says of Thompson’s Station, which has a population of about 2,100. “We’re getting more phone calls, more feelers.”

Construction of single-family homes in Tollgate Village, the planned community in Thompson’s Station, is growing again.

“We issued more permits in Tollgate (in 2011) than we did in the three years before,” Langeliers says.

Berry Farms, Boyle Investment Company’s mixed-use development, is another reason growth is finding its way to the south side of Williamson County. Phase one includes 60 residential lots and 70,000 square feet of commercial space along I-65 opposite the Williamson County Agricultural Center.

“It’s significantly under way,” says Phil Fawcett, executive manager of Boyle’s Nashville office. “We wanted to be the first development out of this downturn.”

Finished homes should be available in phase one this spring. Berry Farm’s neighborhoods will offer urban lofts, town homes, condominiums and single-family homes. Townhomes will be priced around the mid-$200,000s. Single-family homes will range from the mid-$300,000s to $500,000 and up for custom construction.

Fawcett believes Berry Farms is perfectly located for residential development.

“The growth is coming to it,” he says.

Williamson County traditionally has strong home sales for two other reasons: relatively low property taxes and the perception that its public schools are the best in the Midstate.

“My taxes in Brentwood are a third what they were,” says real estate executive Andy Pfeifer, whose family moved from the Hillsboro Village area of Nashville.

In addition, he says, Williamson County’s schools offer “better opportunities” for his children.

Brentwood, on the north side of Williamson County, is getting a residential option it has never had before – apartments. Bristol Development Group’s Tapestry development will feature 393 apartments ranging from 569 to 1,549 square feet which can later be converted into condominiums. Until now Brentwood has allowed only single-family construction on one-acre lots.

“It’s structured as a condominium from day one” and can be converted later if the market justifies that, says Charles Carlisle, president and CEO of Franklin-based Bristol Development Group.

Tapestry is Brentwood’s first high-density rental development. City officials hope it will create a more walkable neighborhood in the Town Center area.

In all of the Nashville area, the real estate market is weakest in Wilson County, where sales declined 6 percent – to 108 houses – in January 2012. Prices declined to $183,710 from $195,077 in January 2011.

Sales were down 50 percent in parts of Lebanon and 25 percent in Old Hickory. But there were glimmers of strength. At Lake Providence, Del Webb’s “active adult” community in Mt. Juliet, the company is on track to sell 140 residences this year.

“We’re selling the lifestyle. The nightlife, the clubs, the travel,” says Pfeifer, the company’s vice president for sales.

Mt. Juliet was booming before the housing downturn and was “probably overbuilt,” he says. “Every builder in America was out here.”

But the suburb, located just off I-40, has strengths that should lead to a sales rebound.

“You could be in downtown Nashville in 20 minutes. It has an appeal to it without the sticker price of Brentwood,” Pfeifer says.

As the region recovers from the housing downturn, Prince, the broker with Bob Parks Realty, expects sales to increase throughout 2012 – unless gas hits $4 or more per gallon.

“That affects a lot of families, can they afford to buy?” Prince says. “It’s about the confidence of the consumer. The unexpected is bad.”

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