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VOL. 39 | NO. 33 | Friday, August 14, 2015

High-end homes finding lower level of demand

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Finally, some inventory. As the fall selling market approaches, there are more houses coming to market – and staying there – than in recent months.

Some houses are actually languishing on the market – for days.

So, what’s not selling immediately? Upper-upper-end homes, according to Steve Fridrich, guru in residence of the upper-upper end. “Those properties are just not moving,” he says.

And it’s no surprise that sales data confirms Fridrich’s statement.

For the past few years, area sales in the $1 million plus range have been growing with the rest of the market. With 360 sales of single-family residential properties listed for more than $1 million dollars. 2014 was the largest year in the area’s history for such sales.

A look back reveals upper-end homes, aka luxury homes, or those more than $1 million, broke the 300 barrier for the first time in 2006 with 304 sales and dropped to 278 sales in 2007, then bottomed at 161 in 2009 before beginning its steady climb back, once again breaking the 300 level with 305 in 2013.

In 2006, the last big year before the downward trend, there was one sale of more than $11 million, six sales more than $3 million and 44 sales more than $2 million. In 2014, there were 43 transactions more than $2 million in the 360 upper-end sales.

To Fridrich’s point, 2015 is falling short of 2014. At this point last year there were 239 sales of $1 million or more as compared to 158 for the same period this year. Homes selling for more than $2 million are up this year with 16 compared to 14 if Williamson County is included.

In Davidson, there is a drop as only five houses have sold for more than $2 million this year, compared to 12 last year.

In examining properties in excess of $2.5 million, there were 16 sales by this point last year as compared to six for this year. Overall, there are 158 sales of $1 million-plus in the area this year as compared to 239 for the same period last year.

Should this trend continue, this will be the first drop in upper-end sales since 2007, and all of us know what happened in 2008. Of interest, if the numbers hold, sales will also lag behind 2014 and 2013.

Or, in the half full category, 2015 will go down as the fourth best year in upper-end sales in the city’s history.

The downward trend also is evident in single-family homes in the $700,000 to $900,000 range with 417 sales in 2014 and 261 sales in 2015, and in homes from the $500,000 to $600,000 range with 593 in 2014 and only 461 in 2015.

So it appears that the inventory woes have finally begun to take their toll as sales from $500,000 and up have dropped dramatically as compared to this period last year.

Only when researching homes sold in the $300,000 to $400,000 range is there an upward tick, and it’s a big one, with 4,134 sales this year as compared to 1,822 last year.

Even though he is an upper-upper-end guru, Fridrich has consistently preached to his flock, “Don’t forget about the first-time homebuyer. They are our bread and butter.”

That’s where the growth is this year.

Condominium sales are holding steady with nine this year of $1 million-plus compared to 10 last year. There have been seven sales in the $700,000 to $900,000 range this year as compared to six last year. And in the $500,000 to $600,000 market, there have been 20 this year compared with the 12 last year.

An interesting trend has developed in the $400,000-$500,000 range in condo sales, where there have been 41 this year as compared to 62 in this period last year and 68 in the same period in 2013.

Perhaps these buyers are opting for the two-to-a-lot single family homes that will evaporate if there are zoning changes.

Sale of the Week

With the new 1212 condominium in The Gulch supplying unheard of prices per square foot, Adelicia owners are able to cash in with similar numbers.

Unit 901 at the Adelicia sold last week for $960,000 with its 1,829 square feet, translating to $525 per square foot for a two-bedroom, two-bathroom condo. The owner had paid $672,500 in July 2010, a tough time for real estate in Nashville.

With this ninth-floor sale came two parking places and an 8-by-15 drywalled, painted and temperature-controlled storage unit. In 1212, the storage units are wire and open.

While the Home Owner’s Association dues are high at $833 per month, they include DirecTV, wireless Internet, a 24-hour fitness center, insurance, exterior maintenance and an outdoor amenity center with fire pits, grills and a pool.

Sydney McCann, one of the listing agents at the 1212 building, reports the development is 70 percent closed and anticipates it will be sold out by year end, meaning the entire building will have closed in 12 months.

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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