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gusrock1414

Nashville Real Estate-Current Conditions

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Disclosure-I am not a realtor

The real estate market is really in a strange state if you ask me. Sales are declining just like the rest of the country but average prices are steady. Unfortunately, I think sales are going to get worse and people will have to start dropping prices. I live out in hermitage/donelson area and I have a condo in green hills. Green hills has an inventory problem and not enough buyers with access to credit. Hermitage prices need some discounts but there is demand there. Overall, I think the real estate market is holding up here but if you want to sell your house, you will have to cut your price 7-10pct at least to move it in the next six months. there will be more inventory coming on line and until the psychology of the buyer changes, it won't get better. Any thoughts by someone in the forum will be appreciated?

PS Richard Courtney thinks its always a good time to buy and his opinion is a joke sometimes

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Disclosure-I am not a realtor

The real estate market is really in a strange state if you ask me. Sales are declining just like the rest of the country but average prices are steady. Unfortunately, I think sales are going to get worse and people will have to start dropping prices. I live out in hermitage/donelson area and I have a condo in green hills. Green hills has an inventory problem and not enough buyers with access to credit. Hermitage prices need some discounts but there is demand there. Overall, I think the real estate market is holding up here but if you want to sell your house, you will have to cut your price 7-10pct at least to move it in the next six months. there will be more inventory coming on line and until the psychology of the buyer changes, it won't get better. Any thoughts by someone in the forum will be appreciated?

PS Richard Courtney thinks its always a good time to buy and his opinion is a joke sometimes

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Thanks for your opinion. I am hoping more people will post on their anlaysis on how things are doing. I had a nice offer on my condo in green hills which is probably 10-15k more than what I can move it for now. I agree with your belle meade and green hills analysis now that 20 somethings can't qualify for 250-300k condos anymore since the credit crunch. However, being a twenty somthing myself, I think two or three years from now, real estate here will be back into a nice appreciation rate. Volume of Sales are still making higher highs and lower lows and if that continues, prices will follow. Also, I did an analysis of sales as a percentage of inventory and its not ridiculous at 17 percent as of July numbers. Thats consistent with the overall rate of 15pct the past couple of years so nashville doesn't have an inventory problem as people would think unless you own a downtown condo.

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I was in Nashville a month ago and I noticed as you went into downtown the prices became more and more absurd. I think people who are hoping prices will one day go up like they were (from 2003 to 2006) are in for a very bad disappointment. The days of absurdly priced housing is over. This all started back in 1999/2000. I was graduating then and had to do my thesis paper on the telecommunications market.

This is going to be a long post so anyone not interested in a bunch of babble should skip to the end.

Okay, the investment market screwed up in the late 90s and Mr. Greenspan then pushed people over to telecommunications and I.T.; as a result those markets became over valued (because of people fudging numbers and over estimation of demand) and that market crashed. If you look at either one of those markets now, they are nothing like they were before. I mean, yes you can make a decent living in telecomm or I.T. now, but its not like the 90s where you had programmers pushing Porches and ferraris. Things just got out of hand and as a result a market correction took place. Well, once that crash happened coupled with 9/11 Greenspan then pushed people into real estate (by people I mean investors) specifically he talked up this "exciting" tool that was being used called sub prime loans. He told investors to invest heavily by buying up these sub prime loan packages. He sold this idea by telling them these loans would allow the average joe to own a home (read: live the American dream). Well, now we are starting to see what was the result of that genius move. There is a area in Queens New York called Far Rockaway. The NYTs had a report that said parts of that place now look like the south bronx back in the 80s. People have lost their homes and other places are sitting empty and boarded up because no one is buying. I see the same thing about to happen in South Florida, thanks to over building and foreclosures.

Ok, so what about the Nashville market? Well I honestly believe prices are going to drop drastically. They will have to because people can not afford condos, houses or townhouses for that matter that are 200,000 and up anymore. Couple that with all the new buildings that went up for housing. Those places are going to sit empty and out of the reach of the average consumer, again because people cant afford a 30 yr 200,000 plus note anymore AND banks are tightening their lending practices. Everything in this world as it relates to economics is supply and demand. If there is to much supply and not enough demand then that will force prices down to a place where people can afford to buy. This is the perfect example of a drastic market correction.

I am not even going to get into the over all economy and what could end up happening if things get worse.

Few interesting articles:

link 1

link 2

link 3

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Hey Wild Style,

With all due respect for your opinion, Nashville real esate, in newly constructed buildings like the Adelicia, is a screaming bargain. I live in NYC and recently purchased a condo at the Adelicia after a lot of research as a second home because I love Nashville so much and spend time here. We would pay approx. $1500 - $2000 per square foot in NYC for something like the Adelicia and that wouldn't have a pool, health club or on site parking. Then add on a parking space at $250,000 each or a parking lease at $500 - $700 per month - no kidding. Problem is you live here and just don't see the forest from the trees.

Financing rates are not high, they're low and have recently been heading even lower. Conventional mortgages are as easy to get for qualified buyers as ever. Nashville's a great place to live, visit and do business (recently ranked in top 10 for best cities to do business by Fortune). The climate's great compared to most places and it's a cool music and university town. There's a lot of young upscale professionals, families and empty nesters that are moving here or that have Nashville in their crosshairs as a place to come to live or retire.

I've lived in NYC for 25 years and have seen prices increase by 1000% in that time, for real, in spite of all of the doomsayers calling the next real estate crash over and over again. Those folks are generally living in the burbs by now or living in cramped little apartments because they bought this doom and gloom story over and over again. Fact is, you can probably barely build it anymore in Nashville for what you can buy it for. Just like the stock market or in any other capital asset, generally the best time to buy and make money is when everyone is screaming sell - sound familiar? I ought to know as I've worked at a Wall street firm for the last 25 years and I've bought and sold many properties during that time - never at a loss and in spite of all of the negative predictions and recessionary periods. Inflation is the constant as is an increasing population. In a great town like Nashville, that will translate into higher prices for well constructed residences in prime locations. By the way, Far Rockaway, in spite of being a relatively poor section of NYC is seeing extraordinary price gains. Harlem in NYC has become a great place to live and what was once considered "the ghetto" is now selling in excess of $1000 per square foot.

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stefpap,

Love the dialog man so don't feel anyway about "disrespect" its all opinions and hopefully we can all learn from each other right?

Anyway I am from Brooklyn man. From East Flatbush area, then moved out to the Island and now I live in south florida. I am currently finishing up another bachelor degree (done in December) and like you have fallen in love with Nashville (it actually reminds me of some parts in queens (like forest hills) and long island.

Anyway, you have to remember everything is relative. While what you said is true about NYC as far as pricing and yes Nashville is cheaper than NYC, it is not cheap (in areas getting closer to downtown Nashville) relative to the income of the population there, if you get my meaning? As you drive through some of those areas you see tons of homes for sale all with the words "reduced prices", because things just got out of hand. Again I do acknowledge that it is cheaper than homes in NYC, but unless the whole of NYC is going to move to Nashville and start buying these places that are not moving, things will continue to slow down.

As for the doom and gloom as you put it for real estate its a fact. Just go do a search on the NYTs website, in June foreclosures shot up 50% and continued to climb steadily. The same is true for here in South Florida, LA, Ohio etc.

Anyway

check these out

link

link

There are other links but I don't want to over do it.

PS

I have had a lot of friends leave NYC. They left not because some one was selling them a doom and gloom story. They left because they just couldn't afford it anymore. I don't know about you but I didn't go to school and take out school loans just so I can get by in life. I wanted to be able to have a lot of disposable income and enjoy life. I love NYC to death, thats home but until things correct itself I couldn't even picture move back

I should also add, I am not knocking Nashville, if it came off like that. Anyone who has been following my posts know I think very highly of that place. I think it has tons of potential and is a awesome awesome city. Though I am starting to think some of the people there are not so friendly (at least that what I noticed on my last two visits). Anyway, God willing I will be there for good in December, would love to attend one of the forum get togethers.

You mentioned uptown, yeah that place is definitely on the upswing. The prices there were lower than most of the city so people were able to flock there from other areas. I have a lot of family uptown actually.

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admin's note: removed long quote

I don't think pricing in the downtown or midtown areas will fall drastically. There will be a decline but mostly for the investors trying to resell quickly for profit. That is, the price the get in the resale won't be what they expect but I don't think they will have to sell below what they paid. There has been at least one panic sale I know of at the Veridian but generally speaking the resellers have made money. But those are the prices that are coming down closer to the base price. Man I hope that made sense.

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admin's note: removed long quote

Wildstyle,

Good to talk to a fellow NYC person who also loves Nashville. No question, there have been areas of the country where prices got out of whack with the economics of the area and I know homeowners there are getting clocked in a big way. From my research, I didn't find that greater downtown Nashville had really had this huge surge because there just wasn't a lot of this kind of housing (downtown/midtown modern) in existence. I agree that we can't directly compare real estate prices in NYC and Nashville as there is certainly a difference in the general level of income of the average "downtown worker" in each city. Of course like you said, the cost of living in NYC is horrendous as are the tax rates, so you can make $150K per year as a single and still not be livin' too large, as ridiculous as that might sound to someone who doesn't live there. That has certainly driven people out of the city, more than a few to Nashville by the way. 1 Bedroom apts. are going for $4000 and up per month in Manhattan! And sure foreclosures have increased in many parts of the country and maybe in Nashville too. That being said, the actual percentages are very small. If it's 1% and goes to 2%, well sure that's a 100% increase but it's not impacting the majority of homeowners. It may even draw people to the area from more expensive parts of the country, no? Also from my own experience, usually by the time you're reading about the negative stuff in the media, NY Times included, the opportunities to find value are already presenting themselves. When the headlines are telling you how great it all is, well that's when to duck.

My point with the doom and gloom predicters was that many people in NYC didn't buy who could have years ago because they heard the same old story over and over about how prices were too high and would come down. As a result they never had a wedge in the market and are pretty much priced out of ever being able to buy. Now they're dealing with correspondingly higher rents. Could this happen in Nashville? Well, not next week or probably even next year but in a few years? I think so in relative terms. If someone thinks 300K is too much, well how about when it's 400K? And that's how it all starts and before you know it we all wonder what we were thinking that we didn't buy it when we had the chance.

Anyway, not to belabor the point. All things considered and IMHO, Nashville offers a tremendous value and lifestyle. As more people move here, the traffic will get even worse and people who can are gonna want to live closer to downtown. In the long run, people are going to continue to be drawn here for various reasons and I think prices in good buildings will do OK and yes, even go up in the future.

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admin's note: removed long quote

Not to derail this thread but, have you met many people from the city in Nashville? Also on the traffic thing, I was impressed by the commuter line they started even though it seems to be a slow start for them. I hope metro decides to build a elevated or even subway at least covering the metro area in the near future. You know it kills me that for all this talk of global warming and alternative fuel, federal and local governments are not taking serious serious steps toward a mass transit system in these areas.

Back on topic, when you talked about deals and holding out, I can tell you for a fact, south florida is the best example of why to hold out. Prices have already dropped from 350,000 in my pops area for a four bedroom to 250,000 (this is since January of 2007) and they are still falling because no one is buying. I have a friend in real estate here, poor guy has just lost his homes because no business is coming in.

On the foreclosures, they have said they expect upwards of 2.4 million nation wide over the next two years as sub primes reset. Thats a lot man, coupled with all the new housing thats been built. Also, on the media talking about this problem, they have actually been talking (predicting) about this since 2003 or so. I generally listen to NPR and they were way ahead of the curve on this.

back off topic,

Have you made the jump to Nashville yet? Are you retiring or relocating to a new job? I have been applying to I.T. jobs there for the last month but have not heard anything yet. Hope I can find something

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I've met a number of people in Nashville, many who've come from other places, Florida, New Jersey, LA, etc. Genereally these folks feel they're getting way more for their money here real estate-wise and are making the same income they were before. I agree, better mass transit would be a great plus because the commuters from out of downtown are dealing with longer commutes. Mainly splitting my time here as I have a job that I can telecommute with and I'm into playing music as well.

South Florida definitely a problem. Way overbuilt, no question but prices were unrealistic and had exponentially run up from where they were years ago. Perhaps people need to adjust their expectations and accept that maybe they can't triple their money every time they buy a home. I don't think Nashville has seen this kind of overbuilding - a few thousand planned units versus tens of thousands in greater Miami alone. This kind of housing can actually attract people to an area, especially younger singles who'd rather go out on the town than do yardwork. NV's a market that still seems to be finding itself in terms of downtown and mid-town condo living. Some of the projects are of lower quality, some are of great quality and are generally priced accordingly or will be by the market. I lived in Miami and in 1982 you could have bought one of the little hotels in prime S. Beach for less than 100,000.

If you're a speculator, well then maybe you shouldn't buy anything anywhere although I'd suggest there people buying real estate today that will make money. BTW, article in yesterday's weekend edition of the Wall Street Journal suggesting the whole Florida great migration thing is toast. Good luck on the IT job hunt. Check out the Nashville Post for business briefs, companies coming this way or expanding for some leads. Healthcare companies are information based so check with them. Sorry for the digressions.

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I moved her several years ago from Southern California on a job transfer and work in the medical profession. Best move I ever made although it wasn't up to me a the time. While I see both sides of the real estate story and read all of the headlines about people in Arizona, Florida, and so on having troubles, I agree with Stefpap on this. Nashville in general seems to be in a major upswing and real estate here is a good value relative to the rest of the country. No doubt in my mind either, there will be a migration towards downtown and midtown, especially by singles and this will drive higher prices over time.

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I moved her several years ago from Southern California on a job transfer and work in the medical profession. Best move I ever made although it wasn't up to me a the time. While I see both sides of the real estate story and read all of the headlines about people in Arizona, Florida, and so on having troubles, I agree with Stefpap on this. Nashville in general seems to be in a major upswing and real estate here is a good value relative to the rest of the country. No doubt in my mind either, there will be a migration towards downtown and midtown, especially by singles and this will drive higher prices over time.

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