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VOL. 40 | NO. 25 | Friday, June 17, 2016

Market madness shows signs of waning, but ...

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May sales data from the Greater Nashville Association of Realtors shows sales increased by 3.9 percent with median home prices increasing by 10 percent compared to May 2015.

While that is a rosy report, it has also answered the question of “When will this end?” in reference to the wildness of the market.

The answer would appear to be that it has.

Maybe it is safe for everyone to come out now.

In what were considered normal times, say 1982-1987 and 1992-2006, the standard line was that sales in the area rose 3-6 percent each year in number of houses sold and 6-10 percent in price.

That is exactly what happened last month, suggesting a return to normalcy.

With 3,930 sales pending this year versus 3,730 pending sales last year, June should be some five to six percent ahead of last June.

However, there is a fly in the ointment, and that is that inventory, which dropped another 1,600 units.

So, in fact, the market is more frenetic than ever.

The month-to-month increase in sales has slowed as inventory has eroded. Prices are climbing at a rate higher than the unit sales, and that has not happened consistently in several years.

Buyers seeking houses under $250,000 in any part of town had better have their pens ready and prepare for skirmishes with other buyers on any property that comes on the market.

Inspections are thorough and appraisals are getting tougher as prices increase.

Another interesting aspect to the current state of affairs in this market is pricing. There is such a fine line between the perfect price and overpricing.

If a unit is overpriced – by 10 percent, as the statistics show – the house does not sell, nor does it garner offers.

There are only two things to change – price and condition. A change in condition should warrant a 150 percent return in price.

Anything less than that, the price should be reduced by the amount of the renovation.

Sale of the Week

Inglewood is abuzz with new construction, which is old news, but buyers are finding good deals in the renovated, older homes like the house at 1246 Plymouth Avenue.

Built in 1946, this brick structure sold for $339,900 the day it went on the market.

It was listed by John Brackeen of RE/MAX Choice Properties for that exact price and Mike McKee delivered the buyer. That is the same Mike McKee that that was recognized by the Greater Nashville Association of Realtors as its Realtor of the Year in late February.

Mike is with adex!homesellers and has been selling homes and supporting Habitat for Humanity for years.

In this transaction, his buyer received a $2,800 credit from the seller to be paid towards closing costs.

There must have been some inspection issues, and this amount may have covered those.

It could not have been the fireplace.

Brackeen, in his Realtor remarks, noted the fireplace is “not used by the current owner and not warranted.”

Fireplaces are another potential pitfall for sellers in this absurd real estate environment. Almost all of the older, masonry fireplaces function, i.e., they draw smoke from the fire and send it upward through the chimney. The only problem is that the firewalls have begun to crumble in many instances and the mortar is failing, leaving holes that could expose wood.

When the firewalls begin to decay, the best solution is to reline the chimney, and that is costly.

With that being the case, most agents are recommending to buyers that the buyers declare the fireplaces to be “decorative.” That strategy is working, and fireplaces are now immune to the inspector’s scrutiny.

Perhaps, fungal art should become the next fad in selling. No extra charge for the fungus in the crawl space, penicillin in process.

In addition to the fireplace, the house has 1,909 square feet with three bedrooms and two baths, according to MLS. That’s another area in which Brackeen gave his sellers the benefit of a bit of a “nod, nod, wink, wink” in his comments, as he stated that “Bedroom 3 is a walkthrough to Master.”

In some circles that is referred to as a hall or hallway. Good for John.

He noted the kitchen has a five burner gas cooktop, built-in oven and reclaimed wood breakfast bar. Some kitchens from the 1950s have reclaimed Formica countertops and vintage linoleum flooring.

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

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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