Rutherford County home sales showed continued improvement last month, with a 14 percent year-over-year gain, according to newly released data.
Surrounding counties showed further improvement with sales up 47 percent in Wilson County, followed by 31 percent increase in Williamson County, and a 20 percent increase in Davidson County.
“What a run our market has had the last two years,” said Steven Dotson, president of Red Realty in Rutherford County. “Let's hope it continues, but I would assume we may have a couple seasonal hiccups along the way.”
He attributes the area's continued real estate success to “our diverse economy, local politicians and local business leaders working together to create more jobs and quality of life.”
Home sales for the four-county area were 23 percent higher last month as compared to April 2012 and show a 10 percent increase over March 2013.
“So far this year, we are 24 percent higher year-to-date than 2012, which was 25 percent higher than 2011, so the upward trends continue,” Dotson added. “Notice the comparisons to the 2006 peak as we are starting to edge closer to the peak years.”
The Greater Nashville Association of Realtors released similar figures for home sales.
A total of 2,780 homes closings were reported for the month of April, representing a 27 percent increase from April 2012, and year-to-date closings mimicked that trend with a 24 percent increase as well.
“The housing market in greater Nashville is clearly active and the recovery is continuing,” said Price Lechleiter, president of the Nashville association. “It is encouraging to see consistency and growth in the number of closings each month. And, it is worth noting that the last time there were more than 2,700 closings in a month was August 2007 with 3,359.”
While the news is currently positive, Lechleiter noted, “there is still significant concern about possible government decisions impacting the housing market.”
“The wrong choices could easily have a major negative impact in a very short time,” he explained. “Realtors from Nashville, and across the country, will be in Washington, D.C., (this) week. We will be meeting with elected officials, asking them to protect the mortgage interest deduction, preserve the mission and purpose of FHA, and restructure Fannie Mae and Freddie Mac to assure that mortgages are available to consumers in all economic conditions.”
As homes continue to sell, inventory lessons, which prompts homebuilders to begin new construction. Inventory in the Greater Nashville area at the end of April was 16,696, down from 19,622 in 2012. This figure includes 10,365 single-family residential homes, down from 12,185 last year.
Median residential price for a single-family home during April was $185,000 and for a condominium it was $163,800. This compares with last year’s median residential and condominium prices of $165,120 and $141,190, respectively.
“Inventory remains the key short-term issue in the greater Nashville market,” Lechleiter said. “Sellers seem to be waiting until they feel like there is the potential for a good financial return before they put their homes on the market. It is encouraging to see that median prices for both single-family homes and condominiums are up significantly this month. Some consistency in price increases will likely prompt more people to seriously consider selling their homes.”
Dotson noted that appraisals continue affecting home sales negatively.
“The issue is the inventory is so tight that quality and high demand locations are bringing full prices, sometimes more than full price, and the appraisers can't use current data to support the prices,” he explained. “It takes 30 to 45 days for most closings to occur after the contract date.
"Appraisers can only use closed (comparisons), so most of the data is several months old which may not be the true (comparisons) of today's market values. Appraisals are improving but still an issue we need to be aware of as prices continue to increase.”
According to David Penn, director of the Business and Economic Research Center at Middle Tennessee State University, single-family home construction for Tennessee was out of step with the South and the United States in the first quarter.
Seasonally adjusted single-family construction fell to an annual rate of 14,900 units from 15,500 in the previous quarter, a 4.1 percent decline. By contrast, the Southeast gained 4.8 percent and the United States 4.4 percent, he explained in his Tennessee Housing Market report for the first quarter of 2013.
“Over the year, single-family home construction is up 23.1 percent for the state,” he stated. “More than half of the increase in construction activity over the year occurred in the Nashville metropolitan area.”
The report shows job creation accelerated during the first quarter, but the housing market did not.
“The Tennessee housing market cooled somewhat during the first quarter following a strong fourth-quarter performance, not that the first quarter was particularly weak,” Penn reported. “In fact, the first quarter is in the top two or three post-recession for construction, home sales, and real estate tax collections, just not up to par with the fourth quarter. The slower level of activity could be attributed to the payroll-tax increase earlier this year and renewed fiscal uncertainty.”