Sales & Prices Up - Inventory Down
Volume X, Number 1
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Richard Exton @ 615-383-8751 or E-Mail firstname.lastname@example.org
Nashville’s residential real estate market was at record levels for
sales volume in 2004. There
were 36,496 closings (including residential, condominium, multi-family,
and land) reported through year end, which is up 14.4 percent over the
31,855 closings reported in 2003. This
was matched with a 13.0% decline in inventory from 14,097 at year end 2003
to 12,258 at the end of 2004 for all property types listed in the regional
multiple listing service.
Increases in sales rates and declining inventory, coupled with
comparatively low interest rates during the peak summer selling period
lead to demand driven price appreciation in many Nashville and Williamson
County neighborhoods. This is
evidenced by general improvements in rates of value change in many of the
areas studied. Historically,
rates of change in property values have followed a stair step pattern,
with stable markets following periods of higher appreciation.
Belle Meade saw an exceptional rate of appreciation, following only
modest appreciation in 2003. The
Belle Meade market reflects the upper end of the price range in Middle
Tennessee. Two factors
impacting the rate of appreciation in Belle Meade.
The first was the improving overall economy in 2004.
The economic strength in 2004 and the weakness 2003 had its
greatest impact on those who can afford homes in the Belle Meade price
range. The second factor is
the inventory of homes at the upper price ranges.
As of 1/13/2005 there were 90 homes offered in MLS between one and
two million dollars, with 20 acres or less.
There were 93 sales in that price range in 2004. That would equate
to an 11.6 month inventory. While
that inventory is high, it is a modest decline from prior years.
An additional factor affecting the market in Belle Meade, Green Hills, and West
Meade is the demand for building sites. Teardowns
continue to be common in Belle Meade, and are significantly more common in West
Meade and Green Hills. Demand for
building sites is impacting the lower end of the market in these neighborhoods,
by setting a lower limit on pricing regardless of size or condition.
The jobless recovery is the primary factor that limited appreciation in
more modest priced areas in 2004. These
areas had rebounded in 2003 from declines in 2002.
In these areas the majority of sellers assist the purchaser by paying
some or all of the closing costs. These
costs are typically reflected in a higher than market sales price.
While a portion of the appreciation is due to inflation, a significant
portion can be attributed to the seller paying closing costs.
The penchant for buyers to demand or expect seller paid closings costs
has been expanding both in loan type and price range. It is not unusual for
homes that have been on the market for a while to sell for in excess of the
list price, as these costs
are added to the purchase price. A
few years ago this practice was limited to FHA and VA loans and to the most
modest priced homes. Now buyers are
negotiating seller paid closing costs for conventional loans and at higher
NOTE: Not all areas or sales were studied; statistical samples vary by area. The information in this study is general; it is intended as a guide. Each property should be considered individually through an appraisal or comparative market analysis in order to estimate its market value.
|Manier and Exton - Real Estate Appraisers and Consultants
2912 Berry Hill Drive - Nashville - Tennessee - 37204
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