Middle Tennessee’s housing market is poised for continued improvement, local real estate experts told a group of regional industry and community leaders during Greater Nashville Association of Realtors’ inaugural housing summit this week.
Held at the association’s offices in Brentwood, Tuesday’s event focused on the current status and recent trends of the regional real estate market, as well as national real estate developments.
Summit leaders aimed to provide their perspective on information and express ways those could be made more favorable for Middle Tennessee residents, in addition to people who plan to move here.
“The biggest reason we organized this event was for us to gain knowledge to take to the consumer,” said Kendra Cooke, president of the association.
She said national portrayal of the housing market is negative, but “we’re in a different boat in Middle Tennessee.”
“Home sales are showing very positive signs in this region with indications that those trends can continue,” Cooke said. “Current information indicates that June home sales in greater Nashville are up more than 20 percent from last year. And, both median and pending sales are up from where they were a year ago.”
Even with these positive trends, the fact is sales are at levels comparable to the late-1990s.
However, Cooke said there is significant amount of growth yet needed in order to improve to levels seen in the mid-2000s or even higher.
“Based on census data and other research, it appears that 34.1 percent of homeowners in greater Nashville are paying significantly more than 30 percent of their income for housing,” said Loretta Owen of The Housing Fund.
While every situation is different, it seems clear that financial or credit counseling along with other preparation could help people who are paying a large percentage of their income for housing, she said.
“They might be able to either reduce the amount they are paying or begin to build equity through ownership, rather than renting – and be better prepared for all that comes with owning a home,” she said.
Emphasis is placed on home ownership for a number of reasons, said Ted Fellman, executive director of the Tennessee Housing Development Agency.
From the family level, the stability impacts everything from how children perform in school to how people engage in their community. Building equity helps build security for the owners and their family, Fellman said.
Trends show homeowners as the most active voters and volunteers for charitable, faith-based and civic organizations. And, the property taxes they generate are fundamental to government services, he added.
“Today is about getting a better picture of the real estate market in this region and realizing we can impact opportunity for people here,” he said. “Reading national news can create a false impression of what is truly the situation right here. In the spirit of all politics being local, so is all real estate. We are convinced we can make a difference in greater Nashville by helping people understand that there are resources, professionals and opportunities here that change the landscape dramatically.”
Franklin Mayor Ken Moore and Nashville Mayor Karl Dean both expressed the importance of homeowners in a community as well.
“The city of Franklin has a diverse population with diverse housing needs,” Moore said. “Young couples, established professionals with families, moderate-income families, single-parent households, single residents, empty nesters and senior citizens are all segments of the population with unique needs. These needs should be planned for.”
He explained that while the city employs 700 people, only 21 percent of them live in Franklin because affordability is a barrier.
Employees living in nearby Spring Hill may have higher commuting costs than those living in the city, but their monthly living cost is still a lower percentage of their monthly income.
A healthy community, Moore said must have healthy economic development, and stable housing market, infrastructure and community support system.
Dean agreed and discussed how each of these four aspects tie into one another.
“One of the fundamental things we can do as a city is to continue to invest in public safety,” Dean said. “People come to a city because it’s safe, and they feel like it’s a good place to invest. Really, what it comes down to is, do you feel like you can raise your family, have your kids here, and you and your spouse work in this city and feel good about it?”
If you keep your eye on that fundamental thing, residents will buy homes here, he continued.
For several of the participants, they believe Middle Tennessee leaders are doing something right – 2,453 homes were sold last month within the greater Nashville area, which includes Murfreesboro and Rutherford County.
According to the association, that figure is up 20.8 percent compared to the 2,031 closings in June 2011.
Second-quarter numbers are also up with 7,139 closings reported – a 24.7 percent increase from closings reported through the second quarter of last year.
Additionally, year-to-date sales increased 24.5 percent, the report states. Mid-year home sales for Rutherford County increased from 1,385 in 2011 to 1,768 in 2012, and the median price jumped from $139,900 to $142,250 during that same time.
“Home sales news in (Middle Tennessee) is strong with evidence that all real estate is local,” Cooke said. “While recent national reports may not have been encouraging, home sales activity here remains very brisk. And, that activity is proving to be sustainable, as the June, second-quarter and year-to-date figures are all up compared to the same periods last year. With media prices up and more than 2,500 sales pending, it is clear that the market in this region is improving and growing.”
The median residential price for the greater Nashville area for a single-family home in June was $182,000, compared to $176,300 in June 2011. Inventory at the end of June was 19,136, compared to 22,043 during the same time last year.
“Inventory is continuing to decrease, which is the case in all categories this month,” Cooke said. “There is now less than an eight-month supply currently available in greater Nashville and less than a six-month supply for single-family residential. Homes that are truly market-ready are moving well, but buyers are not interested in those properties that have not been prepared both inside and out and priced properly.”