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

Brentwood baby boomers looking for smaller cribs

By Vincent Troia

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Nobody wants to rain on the recent real estate parade that’s been marching to the beat of increased sales, continued all-time low interest rates and an improved economy. However, despite ‘for sale’ signs coming down on expensive homes in Brentwood, the housing market outlook cannot be explained in black and white terminology.

There, the outlook is tinted gray.

While recent home sales show positive increases throughout much of Davidson and Williamson counties, according to numbers from both the Greater Nashville and Williamson County associations of Realtors, the numbers are quite modest for Brentwood – an area that has boasted some of the largest and most expensive homes in Tennessee. For example, while Belle Meade/West End homes in January saw a 12 percent increase compared to January 2011 prices, Brentwood’s increase was less than 2 percent.

“We built a bunch of big houses because there’s a lot of money out here,” Crye-Leike’s Janell Glasgow-Hall says of Brentwood. “Folks wanted the opulence. They wanted the big house. But that was then. Now they don’t even need or want stairs anymore.”

By “they,” Glasgow-Hall is referring to the gray clouds hanging over the Brentwood real estate market – the patches of gray hair atop the heads of aging baby boomers who are sitting in high-dollar homes they don’t need any more.

“We’re aging faster (in Brentwood), and folks who have been waiting out the economic downturn are now ready to downsize,” she says. “The questions will be ‘where will they go?’ and ‘who will buy their McMansions?’”

The aging of Brentwood is not a new concept. Back in 2008 and 2009, there were reports of a glut of large homes on the market, most of them listed by ‘empty nesters’ who no longer needed 6,000 square feet of house when all their children had moved out. In fact, while in the midst of the housing crisis some believe we now are emerging from, USA Today, in a January 2008 article, predicted the aging Boomer population was going to create the ‘next’ housing downturn.

It just didn’t say when.

Edsel Charles saw it coming. Of course, he saw the collapse coming too.

Charles, the founder of MarketGraphics Research Group, one of the largest new-home research companies of its kind in the United States, predicted that 2009 would “be horrendous for real estate.” Charles is a past president of the Middle Tennessee Home Builders Association who built more than $100 million in new single-family homes during the late 1970s and the 1980s before launching MarketGraphics. So he knew a bit about the housing market. Then again, many folks made predictions about the collapse.

Still, among his clients are Realtors such as Glasgow-Hall, and she shares his words with all her clients and anyone who’ll listen.

“I go to every seminar he has now, because he nails it. And he now tells me that there’s not going to be much of anything for me (as a Baby Boomer) to downsize to – there’s not going to be that ranch-style. We may have to take a home and modify,” Glasgow-Hall says.

Boomers were “an incoming tide for four decades” in the housing market and, when those folks get to age 65-70, the “glut of homes on the market will depress the housing economy,” foretold a 2008 study on aging home owners conducted by University of Southern California policy planners.

Glasgow-Hall recognizes that trend in Brentwood and sees a “pent-up demand for change,” in which folks have wanted to downsize for three or four years now. In fact, she cites a three-year-old market analysis by HTG Consultants that found Brentwood “going gray” at twice the Tennessee rate and three times the national average.

She thinks the Brentwood boomers will be looking for one-story homes with small yards within walking distance of grocery stores, parks or doctors’ offices. She and Charles don’t believe enough of those types of properties exist – at least not in Williamson County.

“There is a real dearth of properties out there to meet their needs,” says Charles, who has studied the demographics, trends, wants and needs of empty nesters.

Both Charles and Glasgow-Hall believe that Baby Boomers are in transition.

“Some people think they are never going to age, but we all age … life happens,” she says. “You can’t hold on to empty houses – you have to go where you can live out your years comfortably.”

She recently put together a list of homes that are small for boomers who might want “to downsize from their McMansions.” The list covers 30 neighborhoods with “homes that are on small lots that are newer or that are going to be more appealing to you than two stories and a flight of stairs.”

Even though there is difficulty in helping downsizing boomers sell their homes and find potential new ones, Glasgow-Hall isn’t complaining. Like most real estate agents, she’s happy to be busy again.

“I died on the vine for two years,” she says, but is now selling the highest-priced homes in several neighborhoods and seeing larger turnouts at her ‘open house’ events. “Now I sense more optimism. I see more newcomers again.”

“Nissan is still pulling people in. Caterpillar has hired more people. And frankly, I’m a bit shocked that Brentwood is bouncing back this fast.”

Many of newcomers are younger people with children. And they’re not paying the list price – those have come down maybe $200,000 in last two years, which is making homes in the area more affordable, she adds.

With the quality varying by neighborhoods, public schools are crucial to Nashville home buyers. Not so in Brentwood, where the school a home is zoned for is not an issue. One recent Brentwood home buyer acknowledged that the move from Davidson County was for her children.

“It turned out to be the best option,” she says. “If you have kids, it’s a big deal.”

Glasgow-Hall senses a bit of déjà vu.

“The older folks that are downsizing live in sparsely-furnished houses now. The size of the house was mostly for kids. They just don’t need the space, and they aren’t going to spend to furnish,” she explains.

And if the axiom that ‘what goes around comes around’ is true, her reason for optimism, even in light of a potential boomer exodus down the road, is valid.

“I think the market’s coming back. I think Brentwood got healthy in fall of 2010. That’s when I first noticed things coming back up,” she says.

“And now I’m selling houses that aren’t even on the market yet, so what does that tell you? I think out here people buy high end, and will pay high end, so when properties are selling, you sense a confidence again.”

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