The Nashville real estate market seems to be relatively strong compared to the rest of the country. The one potential weak spot is home prices, which were reported on by an April 8, 2010 article in the Nashville Business Journal. That piece found that “Nashville’s home prices aren’t done falling according to an analysis released Thursday by Fiserv Inc. The Wisconsin company said it doesn’t expect Nashville’s home prices to bottom out until the third quarter of 2011, and says prices won’t return to 2007 levels until 2018.” The article continued to note that “It based its report on historical trend data and forecasts based on the Fiserv Case-Shiller Indexes, which measure sales price trends for existing homes, as well as data from the Federal Housing Finance Agency and Moody’s Economy.com.”
Foreclosures amidst Nashville real estate have also been edging upwards, but that figure remains quite mild relative to the rest of the country. According to an April 7, 2010 article, also in the Nashville Business Journal, “Foreclosure rates in the Nashville area continued to rise in February, according to data released today by First American CoreLogic. According to the data, 1.44 percent of outstanding mortgages were in foreclosure in the Nashville-Davidson-Murfreesboro-Franklin area in February. That is an increase over February 2009, when the rate was 0.75 percent. The current rate is still below the national average of 3.17 percent.” The piece continued to note that “The mortgage delinquency rate also increased in February. According to First American Corelogic, 6.05 percent of mortgages in the area were 90 days or more delinquent…”
The volume of Nashville home sales, however, has increased impressively, according to an April 9, 2010 article in the Tennessean. The piece, written by Naomi Snyder, found that “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.”
Recent reports from the Greater Nashville Association of Realtors has revealed that “Middle Tennessee home sales dropped 6.7 percent in September compared to the same period a year ago,” according to the October 8, 2009 article in the Nashville Business Journal by Jenny Burns. The analysts for the association claim “the median price for a single-family home fell 5 percent to $160,000 from $168,900 last year. The median price for condos fell 4 percent to $142,500 from $148,500 this year.”
Nashville real estate has therefore suffered some losses but can look forward to a better future market. In fact, the article claims that “there have been about 2,000 closings per month for the past several months and, while we did not quite make it to that level, we are certainly in that range again in September. Also, the fact that pending sales remain above 2,000 confirms that the pipeline for future closings is also consistent.” This comes as good news for people with Nashville homes for sale who are trying to sell their properties at the highest possible price. However, this also comes as an open opportunity for more potential home buyers to enter the market as prices are still relatively low and the value of homes quite high. However, with the tax credit deadline looming large, several analysts believe these figures might not be so hopeful once the winter season settles in. While year-to-date closings are down 22 percent compared to the previous year, there is still hope for a recovery in the next few years that will stem the decline of prices and mark a revitalization of this struggling industry.
Real estate in Nashville will not suffer the same fate as real estate in several other similarly sized cities, according to CNNMoney.com and Money Magazine’s 2009 Real Estate Forecast. The numbers indicate a drop of just 5.2 percent from the peak of the market to the bottom, and just a 1.4 percent decrease through March 2010. This leaves homeowners confident and hopeful that their properties will maintain their current median home price of $159,000 through the economic crisis currently affected countries and markets around the world.
Memphis real estate has taken huge hits since the downfall of the global economy and the recession that has hit the real estate market especially hard. The Memphis Business Journal reported on October 8, 2009, that “36 percent of residential listings in Memphis experienced a sales price reduction in September, the highest percentage on a list of the 50 largest U.S. cities.” In dollar terms, the total reduction in Memphis was about $27 million. These figures represent a large destabilization which is counterintuitive and in opposition of the growth and stabilization of many other real estate markets across the nation, especially in the northeast and Southern California. It is especially troubling that prices continue to shift downward with the low buying season approach as interested wanes towards the end of the year.
Fortunately, the news wasn’t all bad for Memphis homes for sale. On October 1, 2009, Luke Mullins composed a list of top-ten hard-hit housing markets that are ready to rebound in the U.S. News and World Report magazine. Memphis is actually ranked fourth on list because “in addition to its pleasant quality of life, Memphis’s position as an important transportation hub will keep its economy humming and housing demand strong.” It is also noted that Memphis’s low cost of living and strong healthcare system have made it a popular destination for retirees. Furthermore, foreclosures linked to subprime mortgages have dropped and many distressed properties have been purchased and taken off the market.
Unlike the real estate markets in fellow Tennessee cities Knoxville and Nashville, real estate in Memphis has suffered significantly since the start of the economic recession and crumbling national real estate market. While there has been remarkable improvement this year, the 2009 Real Estate Forecast produced by CNNMoney.com and Money Magazine claims that there will only be a decrease of 0.3 percent in home prices through the year. However, this comes on top of a 13.4 percent decrease in home prices since the peak of the housing market. At present, the median home price is $117,000, with a further 1.6 percent drop expected before the market bottoms out in the second quarter of 2010.
Prospective buyers of Knoxville homes for sale have been pressured to do so by the looming deadline of the $8,000 federal tax credit for first-time homebuyers, said Jim Matheny of WBIR Knoxville. “The impending deadline has provided agents with a rush of business,” the report states. “The first-time homebuyer credit has had a significant impact. We consider first-time homes in the price range below $200,000. If you look at the transactions, homes in that price range are dominating the market right now.” In fact, most of Knoxville’s home sales were in conjunction with the tax credit offered by Washington, D.C. Don Fenley of the Kingsport Times News claimed that about 36,000 people in the state of Tennessee had filed for the federally sponsored home purchase credit by the middle of September. The fear amongst analysts is that the end of the financial benefits granted by the credit will slow the market’s sales rate to a tortoise pace going into the lull of winter.
According to CNNMoney.com and Money Magazine’s 2009 Real Estate Market Forecast, real estate in Knoxville will suffer a home price decrease of just two percent, dropping to $147,000. This is just a moderate change as the recent estimates only estimate a total peak to bottom change of about 5.3 percent; the bottom being estimated as the second quarter of 2010. Foreclosures also improved, according to Yahoo! Real Estate that reported a 5.6 percent increase in foreclosed property prices. Through the period ending October 12, 2009, the median price of a foreclosed home increased to just under $97,000. This comes as good news to current homeowners in Knoxville who have been able to retain the majority of their properties’ values while people in various other cities across the Midwestern and the Southern United States have suffered tremendous cuts in house values.
Chattanooga real estate has greatly benefited from foreclosure sales, reported the Chattanoogan Newspaper on October 6, 2009. The article states that “foreclosure sales have provided a great boost to the broader housing recovery along with tax credits for first-time home buyers and the Federal Reserve’s buying of most new mortgages to keep rates low.” Pending home sales in Chattanooga have increased for the past seven months which is the longest such streak in the series of the index which began in 2001. Economists predict that the rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules.
Statistics regarding Chattanooga homes for sale have kept current homeowners hopeful that a recovery is in sight and that the troubles of property devaluation will soon come to a close. According to the latest figures from Yahoo! Real Estate, Chattanooga’s median price rose three percent to $144,000 while the median price for new homes dropped 0.5 percent to $256,250 and foreclosed property prices dropped just 0.1 percent to $77,999. The increase in the median price reflects a somewhat stabilizing local market in Chattanooga although most analysts predict the bottom of the slump won’t come until the second quarter of 2010.
Luckily for real estate in Chattanooga, the local economy isn’t so depressed so as to stunt growth. Amy Williams of the Chattanooga Times Free Press wrote on October 3, 2009, that revitalized hope for recovery was shown as the Fall Home and Décor Show that was well-attended by people not only from Chattanooga but also all of Tennessee. The show provides new products and design ideas for homeowners looking to spruce up their own dwelling. Analysts note however, that successful shows often lead to increased sales as people become more engaged with the home ownership process.
Tennessee real estate may be in better shape than many other places in the United States, said several speakers at the Middle Tennessee State University Economic Outlook Conference on September 25, 2009, as reported by John Carney in the Shelbyville Times-Gazette. Analysts believe that “Tennessee may recover more heartily than some other parts of the nation due to its educational institutions, a diverse and balanced economy, and new economic developments such as the Volkswagen plant in Chattanooga and the Hemlock Semiconductor plant in Clarksville.” With an economy that continues to labor on and a workforce that continues to be employed, most people agree that Tennessee is well-suited for an upswing in the economy and the ensuing revival of the housing markets across the United States.
Unfortunately, two recently-released foreclosure reports show that real estate in Tennessee is experienced an increase in foreclosure rates, although the rate increases are beginning to slow locally, reported the Memphis Business Journal on October 15, 2009. The article’s primary source, RealtyTrac, claimed that “the state’s homeowners received a total of 10,888 foreclosure notices, or one in every 250 households receiving a filing.” Interestingly, Tennessee’s foreclosure rate in the quarter fell about 9.1 percent from third quarter 2008. It increased about 3.9 percent from the previous quarter. While these numbers might be frightening for some, they represent improvement from previous measurements and are above and beyond the national averages which goes as comfort for many homeowners who are offering up Tennessee homes for sale.
A post on September 22, 2009 by Don Fenley of the Kingsport Times News claimed that about 36,000 people in the state of Tennessee had filed for the federally-sponsored home purchase credit by the middle of the month. He says that “there’s no doubt the incentive has breathed some life into the struggling local, state and national housing market as did the cash for clunkers incentive for the automotive industry.” However, he warns that housing is recovering and thus there is no longer a need to offer the breaks and that because such credits are a form of government spending, they have helped to create the $1.5 trillion deficit this year.