Home Styles and Fashion Collide

I was reading an interesting article in October’s issue of Old House Journal about various styles of homes that have been introduced over the past century. I thought it was interesting that you can often tell when a home was built just by looking at it’s main design. I'm not sure this is true today.

Century of Home Styles
At the turn of the century we had grand Victorian homes followed by the simpler Bungalows or quaint Tudors. In the wartime 1940’s we built lots of bare-bones matchbox homes in subdivisions and later graduated to the knotty pine and vibrant tile bathrooms of the 1960’s.

Things went cheap again in the 1980’s as quality was replaced with quantity evidenced by streets of new homes filled with carpet & vinyl. Homes just got bigger in the 1990’s as the McMansion’s became popular.

Now- Mix and Match
So what about today? I won’t go into all the new building materials and techniques that have become less expensive and longer-lasting, but as far as style, it’s a pluralistic time where many different styles are very popular.

For example, there are brand new subdivisions filled with Craftsman-styled homes and others that are completely contemporary. Still, there are others built for economy that are still filled with carpet and vinyl.

My Fashion Sense
The clothing fashions these days seem to be following this trend. I not really into cutting-edge style, but I have noticed that there are many different trends that have made a comeback, from the thick-rimmed glasses to the colorful dresses from the 1960’s.

The point is that we all have individual tastes and needs. We’re living in a time where this individuality is celebrated. It’s become cool to be unique. Whether it’s your home or your jeans. People want to have their own style.

When it comes to homes, I think this is great. I’ve always loved variety and I enjoy having clients looking for a Bungalow in East Nashville and others looking for a modern condo in Germantown.

When looking for a home you first should consider the needs you have for space and function. After that, there is a wide range of options depending on which neighborhoods you prefer and how much you can afford.

Whether you prefer to tight-roll your jeans or cut them full of holes, there’s a house for you!

-Peter

www.NashvilleCityHomes.com

'Collapse' of Home Values?

I heard a news report the other day that mentioned how people are afraid because of the ‘collapse’ of home values. I thought about this for a moment, but honestly, our home values have NOT collapsed, especially here in the Nashville area.

I guess we have to begin by defining what a collapse would be. I’m not sure I want to think about that, but through 2007 most areas around Nashville were still seeing home prices increase. It’s only been in the past few months that prices have actually decreased.

I’ve noticed the recent change because before the market shifted we would value properties based on the recent sales in the neighborhood. Now, it’s more accurate to look at what’s currently for sale and price the home competitively because prices have generally decreased since those homes sold 3-6 months ago.

So, I admit that prices are less in Nashville, but we’re talking about a few percentage points- nothing like a ‘collapse’. The people that are experiencing the most pain are those who bought at the top of the market and are now faced with a need to sell. It’s similar to those who invested in the stock market when the Dow was 14000 and are now selling.

However, you don’t actually lose money in the market until you sell. If you bought at the top of the market, hang on to that investment. Don’t buy high and sell low if you can help it.

The market will come back. I’m not sure when, but historically it always does. It also always goes up much more than it comes down. If you see your home as a long-term investment, you’ll be fine.

Okay, so there’s no collapse. I’m glad we cleared that up.

-Peter

P.S. Another myth is that the supply of homes is way up. Not true for single family homes. Read more here.

www.NashvilleCityHomes.com

Less Homes on Market Than Last Year?

I saw some interesting stats today. The Greater Nashville Association of Realtors (GNAR), reports that 15,053 residential properties for sale at the end of September 2008, compared to 15,438 at the same time last year. So there are actually less homes for sale this year. (This figure doesn't include condos or multi-family.)

This really surprised me because homes are taking longer to sell. GNAR also reports that around 250 less homes sold in September 2008 compared to a year ago.

The major increases in inventory have been in the farms/land/lots category where there are 38% more to choose from this year. Generally, more inventory (or supply) means that prices fall due to overstock.

So what does this mean? Why are things taking longer to sell, but yet the inventory isn’t piling up? Here’s my opinion: people that don’t have to sell, aren’t. Instead of leaving their homes on the market or dropping the prices to get them sold, people are just waiting. It seems that the majority of homes for sale out there today are owned by sellers that have to sell them- banks, developers, builders and people relocating or facing foreclosure.

The difficulty in this ‘buyers’ market is that many buyers are waiting too! They are watching the news and scared to make any moves that might put them at risk. I tend to believe that there is quite a bit of pent-up demand out there- people that would really prefer to buy or sell but are waiting for one reason or another.

The housing market tends to move slowly compared to the yo-yo stock market. It’s often hard to know what’s going on until it’s behind us. Once confidence is restored and people feel like there is some solid ground to stand on, I think they’ll jump off the fence they are waiting on.

Thinking about jumping? Give me a call! :)
-Peter

www.NashvilleCityHomes.com

Nashville- One of Ten Least Expensive for Home Ownership

A recent article by Forbes has given us the ten least expensive places to own a home with Nashville in sixth place. Cleveland was the cheapest in their report, but it lacks our Southern charm and the Bluebird Cafe, right? :)

Most of their analysis on why cities are more expensive is based on amount of land that the city is confined to. Expensive places like San Fransisco and New York are geographically trapped so their home costs continue to rise. In Nashville, prices have risen, for the most part, but there is plenty of land around the city to expand to, and we are.

If you've been to any of the surrounding counties around Nashville then you've seen this expansion. Whether it's Murfreesboro, Hendersonville, Franklin, Lebanon, or even Dickson, there are new subdivisions and major shopping developments going in everywhere. The controversial new interstate 840 connects many of these outlying areas. (New interstates are always controversial, aren't they? Who votes to build one through your neighborhood?)

All this is happening while downtown is also seeing more demand. I'm amazed how the skyline has changed just in the past few years as new condo residences have come to Midtown, SoBro and the Gulch, as well as all the nearby historic neighborhoods are being overhauled with lots of home renovations and new commercial districts. Most notable are popular areas like Germantown and East Nashville.

I'm glad that we can have such a vibrant city to call home and it's also one of the most affordable in the nation. Like any market we have our ups and downs, but the trend is a healthy upward one with lots of exciting new things to look forward to and enjoy along the way.

-Peter

www.NashvilleCityHomes.com

The Sellers Are All Banks!

Okay, not ALL the sellers are banks, but some days it seems like it. Yesterday, I showed six homes to one of my incredible buyers and half of them were bank-owned. It's a dynamic that is definitely a change from a couple years ago. Working with a bank to purchase a property is a little different than negotiating with a human. Here's what to expect:

1. Banks are not 'emotionally attached' to this property like normal homeowners may be. They are mostly interested in the bottom line net sales price and how quickly they can get it off their books.

2. In my experience, banks are not as 'desperate' as most buyers seem to expect. They are not likely to take an offer of 10% off the list price under most circumstances. If they were that motivated, they would have dropped the list price. They may be negotiable on price, but we'll have to go back and forth a few times to hash it out.

3. Typically, we'll write up the initial offer and send it to the bank's listing agent. They will then log into the banks online system and input the info from the offer and hit 'send'. We'll then wait a couple days and get a verbal counter offer. In one transaction I was working the listing agent said that she didn't even talk to anyone at the bank about the offer. It was all done through email. After the bank counter-offers we generally work out the details verbally.

4. Once all the terms have been agreed on verbally, the bank will send us a packet of their addendum. Often this is longer than the initial offer and will spell out all the terms. As one recent client rightly pointed out, the language is more bent toward the bank. I'm sure they have a team of lawyers that came up with it to protect them. We'll read it over very carefully! After we sign the addendum the listing agent will often have to overnight them to the bank's asset manager to sign and send back. Once the bank has signed off, you then have a binding contract.

5. Within the bank's addendum will be several pages telling you that they absolutely do not warrant anything about the property and that you are taking it "AS-IS". Of course, it is highly recommended to do a home inspection and make sure you know what you are buying. These properties are often in rough shape with the utilities off, so the inspections are an important step.

6. Because they are selling "AS-IS", don't expect them to fix anything that comes up in the inspection. You may be able to renegotiate the price or something, but the bank isn't likely to spend money repairing the HVAC.

Bank-owned properties can be a great value because:
A) Often these properties are on the market for less than the previous owner paid for them in the last couple of years. For example, I saw a great home in Madison yesterday that was built in 2001. Someone bought it in 2006 for $131k and got foreclosed on. Now this home is listed at $115k and still in great shape. In this case the next buyer should have some great equity when the market comes back. I see this dynamic all the time.

B) They may have a smaller pool of potential buyers because of the rough, AS-IS condition that most of these homes are in, and because the banks will often ask for a large earnest money check with the offer. That home in Madison required a 2% earnest money check or around $2500, weeding out some buyers.

It would be interesting to see how many homes in our housing inventory are bank-owned an how that has affected supply and demand. It seems like the human sellers that don't have to sell for some reason are waiting for the prices to go back up. I don't blame them for that, though I look forward to working with the humans again soon...

-Peter

www.NashvilleCityHomes.com

Perceptions More Important Than Facts?

I've been reading articles from leading minds in the real estate market who are attempting to forecast the beginning of a recovery. Here's an interesting one from the Wall Street Journal entitled, "The Housing Crisis Is Over". In it, the author, Cyril Moulle-Berteaux, says that we've hit bottom and "...that the trend is no longer getting worse, which is the critical factor."

Moulle-Berteax goes into the historical data and has a lot of good reasons for his statements, but will he be right?

I tend to be an optimistic type, but I also strive to know the truth and look at the facts of the situation. However, in this case, perceptions may be more important than the facts.

I took a minute to read over a few of the comments to the accompanying blog and the overall tone was that we have NOT hit bottom yet. Further, an NBC/WSJ poll on April 30th reported that 81% believed that the US was currently in a recession.

By the formal definition, we are not in a recession, however, with 81% of the public believing that we ARE in a recession, then for all intents and purposes, we are.

Gary Keller makes this exact case in a recent white paper released to Keller Williams associates:

Wisdom of the crowd, perception is reality, what you see is what you get. If it’s true for you, it’s true – any way you want to posture it. We’re saying that if it walks like one and talks like one, it is one, and we might need to face that reality.

What does all of this mean? Here are my two thoughts for the day:
1. It has become even more important to be an expert on the LOCAL market. Keller also says, "What’s happening within your local markets is all that’s relevant." Even within the broader Nashville market, different neighborhoods have different dynamics going on.

2. Buyers are super-cautions right now. I can't blame them for that. Buyers are looking at more homes and being picky. They want to know that they are making a sound investment and making good choices.

I guess we'll wait and see when we hit the bottom. Of course, we probably won't know it when it happens, but since we all need a place to live, it will happen.

-Peter
www.NashvilleCityHomes.com

High End in the East End

I've noticed some remarkable new listings lately in East Nashville for over $800,000.

Yep, there are currently three East Nashville homes listed in the $800k's with one historic mansion nearing $1.4 million.

To illustrate the magnitude of these prices, I have to go even further and mention that there are currently 12 homes listed with a price point above half a million dollars. Here's the list:

1610 Russell $534,900
818 Woodland $542,500

1622 Forrest $549,900

1306 Woodland $554,800

1202 Woodland $599,900
813 Russell $650,000

719 Boscobel $669,615

1407 Stratton $699,900

720 Boscobel $824,615

900 Boscobel $849,500

809 Russell $898,500

504 Russell $1,375,000

The zinger is that Realtracs only records 5 homes ever selling for more than $500k with the highest sale to date at $550k.

Before we all shake are heads at these unprecedented prices, let me reiterate that these homes are quite remarkable, something I have a passion for.

A quality that I've seen in myself is that I really appreciate a great 'environment'. I love taking a space and making it better. Lately, this has been displayed through landscaping or renovating a home. I appreciate quality work and some of these showplaces in East Nashville have it all.

In fact, I toured one such home at 900 Boscobel before it was on the market. Touring the home was almost a 'spiritual experience' for me. I'm not trying to be sacrilegious, actually quite the opposite. The home was built from the ground up. Every material and detail of the home was thought out and assembled like a quality piece of art (note the artistic chandelier pic). I could see glimpses of the Artist throughout and it was incredible.

Anyway, as fantastic as it is, is it worth $849k??? Time will tell, I suppose. Most people that I've talked to about it seem to have huge doubts, but if there is a home that has 'the goods' that home was it.

East Nashville is setting new precedents all the time, from homes selling at $200 per square foot, to having a hot dog stand in an old Volkswagen van. So, hey, why not have some $800k homes in the neighborhood too?

Wanna buy an estate in East Nashville? Call me today. I'd love to help you set some new precedents!

-Peter

www.NashvilleCityHomes.com

Bad economy? Remember the Revolutionary War?

Worried about our economy? Polls are showing that it's the #1 concern right now, so you're not alone. Of course if you think it's bad now, it's a good thing you weren't around during the Revolutionary War.

I'm no historian, but last week I tackled the voluminous biography of Alexander Hamilton by Ron Chernow. It has been fascinating to learn about the life of this founding father. It has struck me as I read that many of the issues we face today are no different in principle than when the country was formed- state powers, taxation, economy, size of the federal government, etc.

As far as the economy during this period, it was bad and getting worse. The continental congress printed money after the colonies declared independence from Britain, but this currency, known as continentals, was soon worthless. People had to barter for goods and services or continue to use a foreign currency. It didn't help that during the war, Britain counterfeited continentals and ensured the rampant inflation. (more about colonial currency)

The weak central government was completely at the mercy of the states for revenue and had no money to pay the military. This undermined morale and greatly concerned General Washington. After the war ended, the congress narrowly avoided a military uprising by paying the soldiers with land from upstate New York.

Okay, enough of my book report. It just gives us some perspective to understand this piece of history, especially as we consider the current economic situation. In light of this and a good dose of optimism, I tend to think things aren't as bad as reported on the news. Cycles are an inherent part of economies and markets. It's a healthy thing.

Most of the articles I'm reading lately proclaim that the local real estate market isn't getting worse, it's just smaller. Much of the research shows that while there are, in fact, fewer homes selling, the values have continued to appreciate.

It's important to understand the market but yet not be paralyzed with fear. Otherwise, like Alexander Hamilton, you may miss out on purchasing some bargain real estate in Manhattan. :)

-Peter

www.NashvilleCityHomes.com

Why You Shouldn't Believe the Headlines

I just read an AP story about how new home prices are at an 13 year low. It was mostly bad news and then I got to this paragraph:

Sales dropped the most in the Northeast, falling by 40.6 percent. Sales were also down in the Midwest, dropping by 6.4 percent, but posted gains in the South of 5.7 percent and 0.7 percent in the West.

After finding out how bad the Northeast is doing, it says the SOUTH WAS UP 5.7%.

That's good news for us southerners and it helps explain why it doesn't feel like the market is tanking here, in spite of the negative headlines that we see everyday.

So the lesson is:
1. Don't believe everything you read.
2. All real estate is local.

-Peter

www.NashvilleCityHomes.com

Fear Hurting the Markets?

On my way home after an appointment with some fantastic clients, I turned on the radio and caught Neal Cavuto being interviewed about the economy. Cavuto has always seemed like a fairly level headed fellow to me so I was interested to see what he thought of things.

Cavuto offered an insightful perspective on some of the economic dynamics going on right now. He said that the problem was NOT because banks don't have the money to loan- they do. They are just afraid of making bad deals so they've tightened their qualifications and really limited the mortgage options available, especially to 'less qualified' buyers.

He also said that the problem also is NOT that qualified home buyers aren't able to get the loans either- they can! Instead of buying, many buyers are waiting, scared to buy a home that may go down in value.

Bottom line- FEAR is hurting our economy right now.

I tend to agree with this insight. Not that there aren't other issues going on (and plenty of things to be afraid of!), but so much of the strength of the economy is based on perception or our confidence in it.

Instead of screaming that the 'sky is falling' Cavuto talked about our economy working in cycles and that certain 'corrections' are to be expected. He said that people should simply not expect to keep seeing home prices increase at 30% a year without some sort of correction. However, while these times can be painful, the overall economic slope is strong and is historically resilient.

Note: I am no economist. I'm a Realtor. :) However, I'm seeing the trickle down effects of this:

1. My investor clients are having a little more difficulty qualifying for loans that were easy just a year ago.
2. Builders are halting projects as new construction loans are drying up, waiting for new home inventories to decrease.
3. Buyers that aren't relocating are taking their time to find a home. Demanding more for less money. They've got the leverage right now.

Of course there are many opportunities out there right now- if you know where to look.

-Peter

www.NashvilleCityHomes.com

Filling the Gaps Downtown

One of the greatest things about the redevelopment and new construction happening around downtown is how Nashville is becoming less segmented. Many of the 'margins' between very distinct areas are getting harder to find.

For example, do you remember just a few years back when Demonbrean Street by Music Row was lined with vacant buildings? Now the street is lined with trendy restaurants and boutiques and a new Condo/Retail tower, Rhythm on Music Row, is coming soon. The street itself has also improved as a new bridge over I-40 connects the area to SoBro where the Schermerhorn Symphony Center and the Frist Center are located.

Speaking of SoBro, I found this really cool interactive graphic from the Tennessean depicting many the developments south of Broadway. It's a little outdated, but a great way to explore the area.

Downtown, just inside I-40, is a quickly developing area dubbed the "Gulch". Not long ago this was a dark area known for its 'seedy' businesses. Now the area has been transformed as several high-rise condo towers are planned and currently under construction. It's become one of the hottest neighborhoods in town.

On the other side of downtown, two new bridges have come along in the past few years connecting Sobro to LP Field and East Nashville with easy access to I-24. Hopefully coming soon, the ambitious Riverfront redevelopment will further join downtown with greenways and river recreation. The 5th and Main condominiums are also helping to fill some of the 'gaps' between downtown and East Nashville.

-Peter

www.NashvilleCityHomes.com
REALTOR. City Home Specialist.

Two Homes of the Future

In cities across the U.S. people are 'rediscovering' downtown living- forsaking the suburbs to live within walking distance of restaurants, parks and entertainment venues. This is definitely true in Nashville as we see downtown condos selling out rapidly and new construction everywhere.

The 2007 International Builder’s Show in Orlando highlighted this trend by building two different, yet incredible model homes on the same street in a historic part of Orlando. Both of the homes were built to show off the latest innovations and technologies in home building and reflect both the challenges and advantages to an 'in-city' home.

The New American Home, pictured left, is a completely new home, built to incorporate international style and yet blend in with the surrounding historic homes. The 3-story, "urban loft" home with roof plaza will feature 4,707 sq. ft. of air conditioned living area plus a 576 sq. ft suite above the detached garage. Sales price will be around $3 million.

The Renewed American Home, pictured right, was originally built in 1909. It was moved from its former site then fully renovated and expanded to 5860 sq. ft. of air conditioned living area, not to mention the basement and two-car garage. Though keeping some of its historic charm, the home includes the latest in automated controls from the lighting and zone audio systems to the security and safety systems. It's a marriage of a historical environment and a modern entertainment lifestyle. The home will also sell at around $3 million.

I know you want to see more pictures and get more information about these homes from the International Builder's Show. Just don't get too envious.

-Peter
http://www.nashvillecityhomes.com/
REALTOR. City Home Specialist.

East Nashville 2006 Real Estate Trends

East Nashville had a good year in 2006. To begin 2007, I did quite a bit of research comparing neighborhoods using RealTracs multiple listing service historical data. East Nashville’s average price-per-square-foot increased by 16.45%! This is great news for those in East Nashville as a whole, but let's take a closer look to see how some of the individual neighborhoods fared.

Those who are familiar with East Nashville know that there are many distinct neighborhoods within this area of town. Most popular are the historical areas such as Lockeland Springs, Historic Edgefield, and Eastwood Neighbors where Victorian and Craftsman homes from the early 1900’s are the norm. Some home buyers lean more toward the quieter Rosebank or Fortland Park neighborhoods full of brick ranch homes from the 50’s and 60’s nearer the river. All enjoy a growing number of local businesses and highly rated restaurants mixed with the convenience of living close to downtown.

In the graph I noted the average sales prices, but more importantly, the average prices-per-square-foot, the standard figure used by Realtors in estimating home values. Take a look at the graph to see some of my findings.

Some other notes:
- Riverwood/Haysboro area homes sold 40% faster
in 2006, tying with Lockeland Springs for the least avg. days on the market at 42.
- Selling after an avg. of 63 days on the market, homes in Historic
Edgefield took 40% longer to sell in 2006.

I knew East Nashville was doing well, but some of these numbers surprised me. Of course, Eastwood Neighbors was the big winner at a 37.68% increase! At first I thought this was a mistake, so I did the research again. It’s correct. As evidence, in 2005, Eastwood Neighbors had no homes sell for more than $145/sq.ft. However, in 2006 there were twenty-two that sold at over $145/sq.ft with two them over $184/sq.ft.

So, What’s YOUR home worth?
The above averages and statistics are helpful in analyzing neighborhood trends, but when it comes to valuing your house we have to dig a lot deeper. Many factors affect the price that your home will sell for: size, age, condition, amenities, room layout and, of course, location. If you’re wondering what your home is worth, please call or email me for a free consultation. I’m happy to take a look at your home and get you a report of comparable homes with an estimate of what it might sell for based on recent sales and inventory. You may also request a FREE HOME VALUATION.

Interested in other Nashville neighborhoods? Click here for my article on the broader Nashville market.

-Peter

www.NashvilleCityHomes.com
REALTOR. City Home Specialist.