Jan 10,2008 Thursday, 01/10/08
Middle Tennessee home prices hold up
2% rise in December defies 32% sales drop
By CHAS SISK
Staff Writer Tennessean
More than a year after the housing downturn hit Middle Tennessee, home prices are holding steady and in some areas rising, leading some observers to predict a turnaround in the local market by the summer.
Home sales plummeted throughout 2007, with December sales posting the most severe year-over-year drop in nearly 17 years.
That did not translate into falling prices for homebuilders and sellers, according to data released Wednesday by the Greater Nashville Association of Realtors. The median price for a single-family home sold in December was up nearly 2 percent over the same month in 2006, coming in at $187,900.
Median prices also were up in every county tracked by the association, except Sumner, where the median of $180,000 was unchanged compared with a year ago, the association said. The median price is the point at which half of the homes sold for less and half sold for more.
Prices rose because sellers were willing to wait longer to get their asking price and because buyers tended to choose larger, fancier homes over older construction, observers said.
"People are buying a little bit more expensive home," said Edsel Charles, president of the research firm MarketGraphics. "It's not that prices came up at all. People are just buying a little bit bigger square footage."
Leading the pack was Williamson County, where the median price of a home sold in 2007 rose 7.4 percent to $379,369. Prices rose even though sales were down 20 percent, falling to 4,014 sales last year from 5,007 homes in 2006.
One buyer was James Ballard, a retired auditor who moved to Williamson County from Memphis over the summer.
Ballard and his wife bought a four-bedroom, 3,500-square-foot house in the newly opened Westhaven subdivision for $625,000 in June, choosing that neighborhood over more established areas like Green Hills and Sylvan Park in Nashville.
"Everything is kind of new and neat," he said. "In Green Hills or Sylvan Park you either have to buy something somebody did a lot of remodeling on or go in and do a lot of remodeling yourself."
Sales down 15% in 2007
Home prices appeared to hold up even in December, even though 1,000 fewer homes were sold compared with the same month in 2006. That translated into a drop in sales of 32 percent for the month, the biggest same-month decline from one year to the next since January 1991, according to figures from the Realtors association.
For the year as a whole, sales were down about 15 percent from 2006, during which local real estate agents set a record for sales.
Still, some people said they saw signs that the market was improving.
"It feels better than last January," said Mandy Wachtler, president of the local Realtors association. "There seem to be more showings and more people calling in to say, 'Can you show me a home?' "
Data on interest rates and jobs suggest an upswing in sales will start in August, Charles said.
A pick-up in sales would be good news for sellers, many of whom have dealt with the slump by holding on to their homes rather than settle for lower prices.
That strategy has inflated the inventory of homes on the market, which remained above 20,000 properties for the
ninth straight month, and extended the average time a single-family home is on the market before selling to 76 days, up from 65 days a year ago.
"We haven't given up much value," said J. David Pearson, an independent broker in Nashville. "What we've given up is days on the board." |
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