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VOL. 43 | NO. 5 | Friday, February 1, 2019

Change is in the air

Nashville-area Realtors deal with shifting alliances, growing economic uncertainty

By Kathy Carlson

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Last year had something for everyone in Nashville’s residential real estate scene. There was a year-end flurry of sales and mergers among local firms, a reshuffling of real estate agents from one firm to another, near-record home sales volumes, continuing price appreciation and the arrival of new, tech-heavy national real estate businesses.

Local observers see an unusually rapid change in ownership of real estate firms but consider the movement of agents to new firms as a usual end-of-year occurrence. Technology continues to change residential real estate as time-pressed buyers and sellers embrace it, and real estate firms try to figure out how to use it to their benefit.

Residential real estate firms change hands for reasons similar to those of other businesses. Steve Condurelis of Keller Williams says many residential real estate firms are small, family-owned operations with a finite life. If no one in the family wants to continue in the business, owners will want to sell.

Firms also may change hands to ensure they can keep up with changes in technology, educate agents and remain competitive, he adds.

“Real estate people are an entrepreneurial bunch,” says Christie Wilson, president and broker of The Wilson Group Real Estate in Nashville. She also has 25 years’ experience in the Nashville market.

If an opportunity presents itself to sell a real estate business at a good price, many owners are going to take it, she adds.

Just in November and December:

• Zeitlin Sotheby’s International Realty acquired Christianson Patterson Courtney & Associates

Home for sale by Opendoor at 3156 Hidden Creek Drive, Antioch. Opendoor brought its concept to the area last year.

-- Photo By Michelle Morrow |The Ledger

• Village Real Estate Services was acquired by six real estate veterans, Zach Goodyear, Scott Evans, Brian Stoltzfus, David Dorris, Hunter Connelly and Aaron White. Mark Deutschmann, the previous owner, maintains a minority interest and remains with the company.

• Compass, a national real estate firm, launched here.

Also last year:

• Opendoor, another national firm, began operations here.

• Zillow, an online real estate listing company, has announced plans to offer real estate sales services here through its Zillow Offers unit.

From the business buyer’s point of view, there’s the opportunity to grow through acquisition and change the company’s position in the marketplace.

That seemed to be at work in the Zeitlin-Christianson combination.

“While things might look different here now than they did in 1979 (when the Zeitlin firm started), what’s clear is that Middle Tennesseans still place the same value on service, expertise and the ability to get results,” Zeitlin Sotheby’s International Realty CEO Jessica Averbuch says.

“This merger stays true to those values while strengthening our footprint within the ‘Luxury Triangle’ of Green Hills, Belle Meade and Franklin.”

On the heels of the local real estate deals came news that national sales of existing homes fell by 6.4 percent in December 2018. December sales were 10.3 percent less than December 2017, data from the National Association of Realtors shows.

Moreover, growth in home prices slowed, as well, with a 2.9 percent rise in the median price of an existing home in December 2018 compared with December 2017.

But Nashville data and real estate professionals tell a another story.

The median price of a single-family home in Nashville rose from $294,000 to $308,000 or 4.8 percent comparing December 2018 and December 2017, Greater Nashville Realtors data shows.

The median price for a condominium rose by about 6 percent for the same time frame, from $209,450 to $222,000.

GNR’s data reflects activity in Nashville and eight nearby counties: Cheatham, Dickson, Maury, Robertson, Rutherford, Sumner, Williamson and Wilson.

“While there will be challenges, there is still a lot of opportunities for consumers to buy, sell and lease real estate,” says Andrew Terrell, president of Greater Nashville REALTORS.

John Heithaus, a retired real estate executive who moved to Nashville from suburban Washington, D.C., five years ago, has worked in the relocation end of residential real estate and has seen how cities change when corporations relocate, starting in the 1980s when Pepsico and Frito Lay moved to the Dallas area.

“Corporate relocation is wonderful for the real estate market,” he says, adding Nashville is well positioned to take advantage of coming relocations, including the recently announced Amazon logistics hub with 5,000 jobs.

The Nashville residential real estate market will remain strong because Nashville’s economy is diversified with health care, entertainment, convention and tourism businesses and manufacturers such as Bridgestone and Nissan, he adds.

The cost of living in Nashville is still low compared with cities on the East and West coasts, Heithaus says. The lack of a state income tax is a draw, and he says he’s paying less than half of what he paid in property taxes in Maryland. The tax savings were like getting a raise by moving here, he adds.

Condurelis of Keller Williams likens Nashville to “an island.’’

“Other parts of the country are presently experiencing declines in employment and population,” he says. “Not so here. Interest rates are decent, corporations are coming here (primarily for the quality of life), taxes are favorable and we still somehow maintain a small-town friendliness.”

Wilson says the Nashville housing market is becoming more settled and stable. New companies locating here, and new people moving here to work for them, will supply demand for housing.

On the other hand, she says, Nashville has enjoyed about six years of double-digit annual appreciation in home prices. Eventually, rising prices will dampen demand for housing as fewer people can afford the price of a home.

“I think we’ve finally gotten to a sustainable place” regarding home prices. Prices will reach a plateau, she says. “That’s not bad; that’s normal business.”

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