5 22 story towers going up in Nashville

[sleepy]

Seems like this will go on for a while even with interest rates inching up over the next year or so, things seem to not be slowing down. CityPaper reports 3,819 July closings surpassing 2004's 3,627. July was a record-breaking month.  Total year to dates show 21,950 through July 05, an increase of 4.2 percent. My mortage buddy has seen transplants this month from Connecticut, California, New York, Florida and just about everywhere else.

I'll stick with my mortgage rate which is higher than the new ones, but after a decade of paying front end heavy interest, I think I'll stay the course. The principle is getting some attention now.

It's an amazing housing market out there. New median price for Nashville area homes just hit $166,400. Wow, what's THAT all about?

<{POST_SNAPBACK}>

I wasn't talking so much about interest rates "inching up", so much as their going up to levels that were average for the period 1970-2000: 8-9% or so.

On top of that you've got construction loan costs which I assume would be higher than home mortgage costs. I'm an ignoramous as to how construction is financed other than you take the pre-sale agreements to the bank and get a loan. I guess the key is whether the developer--let alone the purchaser--can lock in present day rates for a completed sale a year from now. I sorta doubt it.

So maybe everybody's lining up these deals to get in while the gittin's still good. lol

[it's just dave]

From the article again: The median price for the Nashville areas single-family homes in July 2005 was $166,400. In July 2004, it was $138,350. Looks closer to a 20% increase overall, quite a few steps ahead of the national average. I'm not well-versed in this at all, but if that is the case, how would this affect the growth, in other words, does that place us closer to a bubble or how do those numbers work or how do they translate.

[sleepy]

From the article again: The median price for the Nashville areas single-family homes in July 2005 was $166,400. In July 2004, it was $138,350. Looks closer to a 20% increase overall, quite a few steps ahead of the national average. I'm not well-versed in this at all, but if that is the case, how would this affect the growth, in other words, does that place us closer to a bubble or how do those numbers work or how do they translate.

<{POST_SNAPBACK}>

I wasn't speculating on Nashville in particular, just musing on real estate in general. I was responding to the post by southsideJ who indicated that not all proposed projects will get built and I chimed in with the possibility of higher interest rates being a downer.

I doubt if Nashville is in for the "bubble effect" since prices there are below the national average. But that year-to-year appreciation does reflect the effect of currently low mortgage rates. After all, the "cost" of a house isn't the sale price, it's the monthly note. A $250,000 house at 5% may well cost less than a $100,000 house at 14%.

Perhaps I'm just a pessimist, but I'm old enough to remember the real estate crash of the early 80's when people just walked away from their houses and turned the keys in to the mortgage company. Left holding the bag were the S&L's--er, the taxpayers. I saw a glimmer of those bad days in some article in the Memphis media where it touted people buying downtown condos as second homes--for investment purposes. They appreciate at 30% per year. Better than the stock market, uh huh.

We'll see how it pans out.

[GaTechGuy]

http://www.tennessean.com/apps/pbcs.dll/ar...ESS01/508100409

This article in the Tennessean states that there has been a 9.5% increase in median homeprice from last July to this July. I don't know which article you got your figures from but these are the numbers I was going by. Maybe I'm wrong...who knows.

[it's just dave]

Okay, true confession. I'm an idiot. lol

While in my "wisdom" I used the current median for a condo for last year's price of a home. That's what I get for trying to talk on the phone, answer e-mails and do my other stuff at work at the same time. You're right. It's the CityPaper's fault, though. They supplied condo information along with single family info. They should know I can only multi-task so much nowadays. lol. And we won't even get into my reading glasses.

But, one consolation. Using the figures I used (no matter how wacky they were)...I at least did my arithmetic right. GaT, you've saved me once again. Don't you ever go away.