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Tue, Jul 22, 2014

Home sales remain strong despite seasonal dip

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Home sales remain strong despite seasonal dip | Real Estate, Housing, Home Improvement, Finance, Economy, Construction, Banking

(Graphic by M. Willard)
Rutherford County finally experienced a dip in home sales last month – a seasonal decrease that is to be expected during cooler months, says Steven Dotson, president of Rutherford County-based Red Realty.

That said, home sales held strong when compared to the same time last year. Newly released data shows an 11 percent increase from September 2011 to September 2012 in Rutherford County.

Nearby counties fared just as well, with a 15 percent Davidson County, 33 percent increase in Williamson County and 39 percent increase in Wilson County. Combined, the four-county market showed a 26 percent year-to-date gain in home sales.

“As we predicted, the seasonal decreases finally showed up,” Dotson said. “The year-to-date numbers continue to be much better than last year so with only three more months to go, it should be safe to say 2012 will end much higher than 2011.”

Pending sales also decreased last month, with Rutherford Counties down 9 percent, while Davidson and Williamson showed a 10 percent and 21 percent decline, respectively, in pending home sales. Wilson County actually pended 9 percent more sales than it did in August 2012.

“These pending numbers show we continue to see the seasonal decreases we have been talking about all year,” Dotson continued. “I would also think the November elections are causing some buyers to be hesitant until then.”

The Greater Nashville area, of which Rutherford County is a part, showed a 23.7 percent increase in home sales in September, as compared to the same time last year, according to the Greater Nashville Association of Realtors.

Third quarter numbers have increased from 2011 with 26.2 percent more sales than last year’s third quarter closings. And year-to-date closings for the Greater Nashville area show a 25.2 percent increase.

“Home sales have seen an increase every month this year,” said GNAR President Kendra Cooke. “And those increases result in strong third quarter and year-to-date numbers in Middle Tennessee – both up more than 25 percent. Also notable for September are more residential closings than all closings combined last September.”

She pointed out that while “standard seasonal trends may show reduced monthly closings, the comparisons to the same months from last year continue to indicate significant increases, which is very encouraging.”

The greater Nashville area is fortunate to be experiencing these increases, as they are still not the case in many other parts of the country, she added.

“Most every category saw an increase compared to September last year with the exception of a slight decrease in multi-family home closings,” Cooke said. “But, with both residential and condominium median prices up and pendings above 2,300, we remain encouraged as we enter the fourth quarter.”

The number of pending sales was also substantially higher than the same time last year, and homes stayed on the market an average of 12 days less, data shows.

Additionally, the median residential price for a single-family home during September was $175,000 in the Greater Nashville area. This compares with last year’s median residential and condominium prices of $163,000.

Homes in Rutherford County sold for about 10 percent more than they did in September 2011.

“Like most of the year, inventory remains down, but we are still at a healthy market level and there are a lot of great options for potential buyers. Greater Nashville remains attractive to both companies and families, ” Cooke said, adding that inventory fell from 12,912 in September 2011 to 11,005 last month.

Rutherford County’s Dotson says he, too, feels optimistic about the coming months.

“I think once we get past the presidential election and prepare for a busy spring season, we’ll continue to see improvements in the overall health of the real-estate market,” he said. “I also hear more jobs are on the way to Middle Tennessee, and the other new jobs that were announced in the past should start getting paychecks this winter. As long as new jobs are being created locally, we should continue to see the local home sales and prices improve.”

Sustained economic recovery in the country requires a healthy housing market, echoed Anand Nallathambi, president and CEO of CoreLogic, a leading provider of housing information, analytics and business services.

“You cannot have a healthy housing market without price stabilization and ultimately home price appreciation,” he said. “Improving pricing trends over the past few months and our forecast for continued gains in September bode well for a progressive rebound in the residential housing market."

According to a report by CoreLogic, the 2012 housing recovery is expected to be more durable than in prior years because of an improved balance between supply and demand.

“Given the solid performance of home prices in the spring of 2012, even a stronger-than-projected decline in the fourth quarter of this year is unlikely to diminish the gains made,” the report states.

Additionally, new home sales are up 24 percent over a year ago and existing home sales are up 11 percent over a year ago, according to a CoreLogic estimate.

“This demand is fundamentally driven by institutional investor interest in single-family residential properties as an asset class, pent up demand returning to the market, and increasing consumer confidence in housing,” the report states.
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