Nashville Home Sales Soar 22 Percent

Nashville Home Sales Soar 22 Percent Interest rates are at historic lows, the government is shoveling thousands of dollars in tax credits at people who buy homes, and the Nashville real estate market responded in March with a 22 percent increase in sales compared with a year ago.

With a new sense of optimism, sellers are putting more homes up for sale here, buyers are signing more contracts, and homes are moving at a much brisker pace that's likely to last at least until summer.

Don't expect the same for prices. Despite optimism among Realtors that there'll be a last-minute rush for sales before federal tax credits expire on April 30, median prices probably will remain down by double-digit percentages from their peak three years ago.

Stagnant prices could last at least until the summer, and some real estate experts say it may be eight years before Nashville-area prices recover to the heady days of summer 2007 when median prices swelled to $196,000 in a nine-county area.

In March, the median price for a single-family home in the Nashville area was $159,250, about flat compared with a year earlier, the Greater Nashville Association of Realtors said Thursday.

"When we start to see job growth really pick up in earnest, we might see sustained price increases for homes,'' said David Stiff, chief economist at Fiserv, a national research firm that tracks more than 300 housing markets. He thinks it could be 2018 before prices here get back to mid-2007 levels.

Realtors say they're getting a lot busier in April as the final days in which first-time buyers can get an $8,000 federal tax credit play out.

The tax credit applies to housing sales contracts signed by April 30 and closed by the end of June. There also is a $6,500 tax credit for existing homeowners.

The sharp increase in sales during March represents the sixth consecutive month that more homes sold here year-over-year, the Realtors association data show.

Sales rose for 6 months
John Gimenez decided to put his tiny 950-square-foot home on the market this week, just as the tulips bloomed and before the tax credit runs out. Within an hour of listing it for the first time, Gimenez had already shown his East Nashville house to an interested shopper. He is asking for $174,900, or $15,000 more than he paid for it three years ago before making improvements such as a new roof, new deck and new heating and air conditioning.

"We're very optimistic,'' said Gimenez, who plans to buy a larger house because he is getting married and wants children. "It seems like people are getting a little more confident."

Lucy Smith, the president of the Realtors association, said she expects sales to increase at least through early summer because of the tax credits.

"What happens after that, we'll just have to wait and see,'' she said.

All Nashville-area counties saw sales gains in the first quarter except for Maury County, home to the now idle General Motors plant at Spring Hill. Williamson County saw sales climb nearly 20 percent in the quarter, and Davidson County sales went up about 10 percent.

Pending sales up 30%
More people signed contracts as well, with pending sales up nearly 30 percent to 2,231 in March, the Realtors association said.

Inventory climbed slightly, with 300 more single-family homes on the market in March compared with the year before.

Karen Rogers was one of those who put a home on the market recently — a townhome on Whitland Avenue in West Nashville.

"We are hoping to get interest from people qualifying for that tax credit,'' she said.

Rogers is finishing a medical residency at Vanderbilt and plans to move with her husband to Virginia for a permanent job.

They had purchased their two-bedroom townhome for $215,000 three years ago and hope to sell for $224,900.

Christie Bradley, a Realtor with Fridrich & Clark, said she is definitely getting busier because of the soon-to-expire tax credits. She put one house on the market on Wednesday and had four showings by Thursday.

As part of a nationwide push from the National Realtors Association, she will have four open houses this weekend.

"I ran out of agents to help me with my open houses, so I have my husband helping me,'' she said. Bradley and her husband also are trying to sell their own house.

Some take financial loss
Kelsey Najpaver and her husband have a contract to sell their home in West Nashville for $217,500 — or $2,000 less than they paid for it three years earlier.

And Najpaver feels lucky. Other houses in the neighborhood were taken off the market after sitting around for more than a year without a sale. The Najpavers are moving because of the husband's new job."It's obviously not ideal,'' she said. "But we felt very fortunate just to sell it."

Condominiums listed in the Realtors' multiple listing service were flat at 200 sales in March, about the same as a year earlier. The average condo sales price was $137,450 here last month, down 12 percent from a year ago.

But price declines for single-family homes and condos have not been as dramatic in Nashville as other markets that experienced big housing bubbles. For instance, the Jacksonville, Fla., housing market saw a 40 percent drop from peak prices, and Sacramento, Calif., had a 55 percent collapse.

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Great information on Nashville Home Sales for March 2010

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