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VOL. 36 | NO. 42 | Friday, October 19, 2012

Home sales stay hot in third quarter

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Home sales are supposed to be weak during a presidential election year, but Nashville-area home buyers apparently haven’t heard that bit of conventional wisdom. The market is stronger than it’s been in years.

“We’re seeing everything way up,” says Andrew Terrell, a Realtor with Pilkerton Realtors. “Nothing has slowed down.”

Nashville-area home sales in the third quarter of 2012 were 26.2 percent higher than during the same period of 2011, according to the Greater Nashville Association of Realtors.

“Home sales have seen an increase every month this year,” says GNAR President Kendra Cooke. “And those increases result in strong third quarter and year-to-date numbers in Middle Tennessee – both up more than 25 percent. Also notable for September are more residential closings than all closings combined last September,” she says.

“Greater Nashville is fortunate to be experiencing these increases, as they are still not the case in many other parts of the country,” Cooke says.

Despite uncertainty about the election, buyers are being encouraged by a number of factors. Unemployment is declining. Businesses are creating jobs. Interest rates are lower than they’ve ever been, and home prices still haven’t fully bounced back from the recession. For many people in Middle Tennessee, those are good reasons to buy a house.

“We have one of the best economies around, and new businesses are coming into the area and hiring,” says John Bennett, market president for Republic Bank in Franklin. “Add to that equation interest rates that are unbelievably low.”

The interest rate for a 30-year fixed-rate mortgage is slightly above 3 percent. Rates for 15-year loans or adjustable-rate mortgages are less. Bennett describes them as “shockingly low.”

In Davidson County, 3,303 homes were sold during the third quarter of 2012, which includes the months of July, August and September. That was 21.5 percent more than the 2,718 homes that changed hands during the third quarter of 2011. The average price, however, went up only about 3 percent. It was $196,279 last year. This year it was $201,884, according to a market survey by Chandler Reports.

The strength of the market varied from neighborhood to neighborhood. In East Nashville’s hot 37206 zip code, the average home sold for $184,568 last quarter, 14.3 percent more than 2011’s price of $161,472. There were 200 sales in the neighborhood last quarter, a 28 percent increase over the third quarter of 2011.

In the 37215 zip code in the Green Hills neighborhood, market conditions were reversed. There were 186 sales, a 50 percent increase over the third quarter of 2011. The average price during the third quarter of 2012, however, fell 15 percent to $429,965. It was $506,125 last year, according to Chandler Reports.

Sellers are being realistic about the prices they are asking for, says Realtor Terry DeSelms.

“Sellers are finally listening to the market,” he says. “They don’t like it, but they’re listening.”

As a result, the number of sales is up, but prices have remained stable, DeSelms says.

In Williamson County, 1,363 homes were sold during the third quarter of 2012, a 28.8 percent increase over the 1,058 sales during the same period of 2011. Prices were slightly down. Last quarter the average price was $363,441. In 2011 it was $371,109.

In fast-growing Thompson’s Station south of Franklin, both prices and the number of sales were up. There were 75 sales last quarter, a 31.6 percent increase over last year, when there were 57. The average price in the third quarter of 2012 was up 5.6 percent to $232,527. Last year it was $220,299, according to Chandler Reports.

In Spring Hill, where sales have been strong since General Motors added jobs at its former Saturn factory, 182 homes changed hands last quarter. That was almost 31 percent more than the 139 sales in the third quarter of 2011. The average price was essentially unchanged. Last quarter it was $228,320. Last year it was $228,138.

Prices were flat in Wilson County, although sales were up more than 24 percent. There were 696 sales during the third quarter of this year, compared with 558 during the third quarter of 2011. The average price last quarter was $196,503. Last year it was $195,677.

Rutherford County was the exception. Sales and prices were both up. The average price during this year’s third quarter was $165,430. That was 11 percent higher than last year’s price of $149,083. There were 1,345 home sales, a 21.4 percent increase over the 1,108 sales last year.

Sales and prices were both up in the fast-growing Smyrna-LaVergne area on the county’s northern rim, according to Chandler Reports.

There were 200 sales in Smyrna last quarter, 17.6 percent more than in the third quarter of 2011 when there were 170 sales. The average price last quarter was up 14 percent to $148,914. Last year it was $130,625.

LaVergne had 142 sales last quarter, about 20 percent more than in the third quarter of 2011 when there were 118. The average price was up about 13 percent to $111,082. During the third quarter of 2011, the average price was $98,097.

Rutherford County’s real estate market has been buoyed by additional hiring at Nissan’s auto assembly plant in Smyrna and by the arrival of Amazon.com, which is building fulfillment centers in Murfreesboro and Wilson County. The company announced plans to hire 1,300 workers.

“There’s a lot of job creation,” which has strengthened the confidence of home buyers, says Tom Williams, vice president of Crye-Leike Real Estate Services in Smyrna.

That, combined with a falling number of houses on the market, which Realtors refer to as inventory, is leading to price increases in some neighborhoods.

“Before long we’ll see a switch from being a buyer’s market to a seller’s market,” Williams says.

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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