The 'R' word creeps in although the news is good

Friday, August 30, 2019, Vol. 43, No. 35

The Greater Nashville Realtors released sales data last week comparing the monthly numbers with the same periods as last year. Based on the monthly figures, the news is good with sales up 9.9% as unit sales increased from 3,812 to 4,189 and median prices are on the rise as well.

The median price for a single-family home was $316,000 this year as compared with $307,000 last year, and condominiums increased from $220,000 to $227,000 for the same periods.

Andrew Terrell, the president of Greater Nashville Realtors, attributes the fact that the mortgage interest rates are at a three-year low to account for some of the activity. Traditionally, when the Federal Reserve meets with interest rate reductions on the agenda, homebuyers await the news with great anticipation.

No longer is there a need for news from the media, merely a Twitter account to await the rant. Besides the Fed’s actions, while significant, do not determine the mortgage interest rates.

As is always the case, many are waiting for the market to slow down to buy. In Nashville, that logic is spot on during recessions, but not in non-recession years. Some took glee in the fact that 2018 had fewer sales than 2017, the record-setting year, as sales slid from 40,482 all the way down to 39,959. Those 523 sales hurt.

The 2017 annual sales broke a record that had been set in 2006, but the real estate market is similar to major league baseball this year as the market is juiced, and therefore, the 2017 record is in peril. At the end of July 2017, there were 23,365 sales, and this year there are 24,059 and August looks promising with 3,483 pending sales.

Balls are flying out of major league parks, homes are selling at a record pace and all is good with the world, but the “R” word is floating around again.

Those that await crashes may be in for a treat as there is constant talk of a looming recession. In reviewing the numbers, the impact of a recession is hard to fathom, even with it only nine years past. As was noted 2006 set a record with 40,056 sales. In 2010, only four years later, the market bottomed at 20,250 sales, a drop of almost 50 percent and 2011 showed only a slight increase to 20,606.

In 2012, the recovery was in full swing with 26,097 sales. If the numbers hold, 2019 will bring in another 40,000 sales. Then in 2023, there will be only 20,000 sales again. Stash some cash.

336 Normandy Circle 

Sale of the Week

Realtors are often asked by clients, friends, and colleagues for investment advice. While trends and developments come and go, there is one developer who consistently prices his properties affordably when they debut on the market and continue to appreciate as time passes.

That developer is HND Development led by Bill Hostetler.

Hostetler’s Normandy Place development in Sylvan Heights, for years seen as inferior to its bordering Sylvan Park, has once again reinforced the Hostetler legend. The house located at 336 Normandy Circle first sold in 2002 for $136,102 when its construction was completed.

Two years later in 2004, it sold for $184,900. Then the next owner rode out the recession while living in the home and sold as the market began to rebound in 2012, grossing over $40,000 as it sold for $225,000. The house was sold to the fourth owner two years later for $265,000, an additional $40,000, but in only two years.

Now, five years later, the house sold for $337,500, or $72,500 over what the owner had paid for it in 2014. He flies under the radar and cares little if any for recognition or adulation, but Bill Hostetler has made hundreds of homeowners millions of dollars spread over his many developments.

The 336 Normandy Circle defied some of the modern-day rules of engagement as its master suite is on the upper level as is a second master suite. Normandy Place is a neighborhood that would not suffer for its stairs. Additionally, the listing agent, the brilliant Natalie Stanley touted the upstairs laundry room as a positive feature as the owner would not have to lug clothes up or down stairs.

Both bedrooms and two full baths are on the upper level with a half bath on the first floor. Even at $337,500, the house sold for $205 per square foot with 1,682 square feet.

With hardwood floors and the high vaulted ceilings, the residents would be “swimming with space” says Ms. Stanley, and the new HVAC system would efficiently heat and cool the area. The kitchen has stainless steel appliances as the appliance makers have yet to convince the populous there is a better alternative. Look for Greenland green to appear soon.

Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty and can be reached at richard@richardcourtney.com.