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Nashville Bits and Pieces


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That sounds like a spec bubble waiting to go "pfffffft" or worse "pop!".   With AirBnB as a fallback and the rapidly rising prices in those markets, I'd guess those properties are never meant to be owned. Will be interesting to see what happens after the Fed raises interest rates soon.  

Wife and I visited a childhood friend in Atlanta (Sandy Springs) last weekend.  They mentioned their neighborhood had not appreciated like "other areas". I really don't know what they meant.  Their daughter who recently graduated from Clemson had been living in North Carolina a couple of years but suddenly couldn't afford the housing there. She was forced to move back home. I've heard that story countless times all over, which is problematic in its own right. 

Whatever they meant by their area not appreciating like the surrounding areas begins to make sense to me with stories like this.  Theirs is an established 1970-80s neighborhood and very shady, suburban (near the Chattahoochee) and not an area near business or tourist sites.  There's a specific market for their houses and I doubt there's much competition from AirBnb (et.al.) or nearby apartment developments.  Those properties are targeting renters and I think are being marketed to suckers who think there will always be "a renter" who will pay them.  The run-up in prices might well be happening where there's a lot of commercial competition too.  Here in Chattanooga, we're seeing prices rise at the fastest pace since we've lived here, but they're being bought by people who are moving into them. I'd guess there are a share of houses closer to downtown (Cameron Harbor, Northshore, Southside, etc.) where that's happening, but so far not nearly the problem it is in Atlanta. With the migration to lesser markets like Charlotte and Nashville, I can see how that's also happening there.

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The Nashville housing market is still leading the country, this time due to the average number of days a for-sale home stays on the market.

In January, Nashville homes were on the market for an average of 16 days, the quickest turnover among the figures of the 51 metro areas analyzed by real estate company RE/MAX.

Nationwide, the average was 34 days on the market, up two days from December.

More behind the Nashville Post paywall here:

https://www.nashvillepost.com/business/development/report-nashville-homes-spend-just-16-days-on-the-market/article_8e179088-90f9-11ec-96ba-3ba3d2192422.html#tncms-source=login

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On 2/19/2022 at 7:01 PM, KJHburg said:

this is something Nashville and the entire metro area needs to watch.  Major Wall Street investors are snapping up homes in southeast especially in Atlanta and Charlotte but Nashville as a percentage is not too far behind.  It has become such an issue here in Charlotte some large neighborhoods of homes in the $300-600K range are putting in covenants that say you can only rent a home after 1 full year after purchase.  Others are doing restrictions to cap rentals in neighborhoods.  We already have completely built to rent single family home neighborhoods which is not a problem.  And like Nashville thousands of new apartment units being delivered every year.  

Check your zip code in this article

https://www.washingtonpost.com/business/interactive/2022/housing-market-investors/

these investors are paying all cash and above market prices for homes and shutting out first time buyers but Realtors and now even sellers are on to them now.  Everyone has rented in at some point in their life but snapping up every home under 400K is not good for any market.  Owning a home in a fast growing city like Charlotte or Nashville is a way to build wealth and this is being taken.  Just be aware in your own neighborhoods.  (and tenants of these massive property owners for the most part hate their landlords as they raise the rent every year a good bit and I know this personally from several people) 

As for the Californian exodus they are coming to NC in even bigger numbers than TN but they are spread out more some in Charlotte some in Raleigh Durham which long attracted Californians with their biotechnology and tech.   I suspect most Californians coming to TN are ending up in the Nashville metro. 

 

This has been an ongoing GLOBAL issue for sometime now. I could've sworn I posted this CityLab article from May 2021 where the vast majority of homes in a subdivision outside Dublin (specifically Maynooth where my girlfriend went to grad school) was running into the same thing. Investors are seeing rentals as a safer investment than their sketchy Wall Street histories as people will always need a place to live. The investors are actually taking away the "supply" argument to build more houses, because all they are doing is buying the supply and inflating the costs.

While I don't believe we will see any particular policy action from the state or even Metro (for fear the State may slap their hands yet again), I applaud the groups getting covenants in place. They will act as a sort of community benefits agreement for residents and potentially protect the investment opportunity. What I could see happening is potentially larger subdivisions having to provide something along the lines of a covenant or even deed restriction on the parcels prior to the planning process being completed. This might fall into some of the same "gray zone" as the inclusionary housing (which this issue also highlights a need for in cities) and the state may see red over it (party pun intended :tw_glasses:), but it may be a way that metro could limit some of those impact without exactly having policy on the books.

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On 2/19/2022 at 8:01 PM, KJHburg said:

this is something Nashville and the entire metro area needs to watch.  Major Wall Street investors are snapping up homes in southeast especially in Atlanta and Charlotte but Nashville as a percentage is not too far behind.  It has become such an issue here in Charlotte some large neighborhoods of homes in the $300-600K range are putting in covenants that say you can only rent a home after 1 full year after purchase.  Others are doing restrictions to cap rentals in neighborhoods.  We already have completely built to rent single family home neighborhoods which is not a problem.  And like Nashville thousands of new apartment units being delivered every year.  

Check your zip code in this article

https://www.washingtonpost.com/business/interactive/2022/housing-market-investors/

these investors are paying all cash and above market prices for homes and shutting out first time buyers but Realtors and now even sellers are on to them now.  Everyone has rented in at some point in their life but snapping up every home under 400K is not good for any market.  Owning a home in a fast growing city like Charlotte or Nashville is a way to build wealth and this is being taken.  Just be aware in your own neighborhoods.  (and tenants of these massive property owners for the most part hate their landlords as they raise the rent every year a good bit and I know this personally from several people) 

As for the Californian exodus they are coming to NC in even bigger numbers than TN but they are spread out more some in Charlotte some in Raleigh Durham which long attracted Californians with their biotechnology and tech.   I suspect most Californians coming to TN are ending up in the Nashville metro. 

 

My sister and brother in law have put down offers on close to ten properties, every one over asking. They keep getting outbid by cash offers, and keep increasing their budget and looking farther and farther out to hopefully find something. But it's just not there, largely because of these investment firms that are completely wrecking the market. I am at a loss as to what can be done. Hopefully the market rights itself and they lose out in the long run, but that doesn't help people now, and it runs the risk of another massive collapse.

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1 hour ago, KJHburg said:

I think neighborhoods can fight back by doing what Highland Creek in Charlotte did. Pass an HOA deed restriction that says you can rent only after a year of ownership.  Highland Creek has 5000 homes so this is a huge neighborhood.  Obviously the more publicity these big firms get about their buying habits will turn others including sellers against taking their offers.   Realtors and some sellers are waking up to this in Charlotte as they know of people shut out of homes.  My mother just sold her home after 60 nonstop years of homeownership and with 30 offers 15 from investors 15 from owner occupant we chose an owner occupant.  Builders can not sell new homes to investors too.  Some are around here that do but some large ones like DR Horton started their new homes for rent division but they no longer sell new homes to investors in most of their communities unless it is one of their own Build to Rent.    If first time buyers can't find homes then they delay purchasing which lessens their wealth.  Wall Street got into this business to own all these homes to make money and take that appreciation and wealth creation into their hands not individual families and homeowners.  It is basically stealing wealth generation from Americans and making them renters for a long time.  It disgusts me as a Realtor.   But neighborhoods can fight back as can builders refuse to sell to investors or do what DR Horton did and create your own division to steal the business back from Wall Street.  I am doing my part by explaining to all sellers the pitfalls but of course it is their choice in the end.  Talk to your family and friends about it.  What I find is investors offers are really not any more than owner occupants it is just they are cash.  

 

Totally see your point, and I hope more neighborhoods do it, but I don't have a lot of faith that it'll happen quickly enough. I imagine getting an HOA started where one doesn't already exist is probably rather difficult. On top of that, the neighborhoods where it could be used the most have already been corrupted by these investment firms to a point where an HOA will never be able to take root, or at least not before the damage is already done. I'm just really pessimistic about it all...I think it's going to get a lot worse before it gets better.

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3 hours ago, grilled_cheese said:

Anybody know where the Duck Head HQ, warehouse or manufacturing site was?  Just recently learned they originated in Nashville.

https://en.wikipedia.org/wiki/Duck_Head

It was on Charlotte Ave near I-40 across from Centennial Medical Center-my brother worked there for a while so I had a constant supply of Duck Head jeans and jackets.

Edited by bnacincy
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3 hours ago, grilled_cheese said:

Anybody know where the Duck Head HQ, warehouse or manufacturing site was?  Just recently learned they originated in Nashville.

https://en.wikipedia.org/wiki/Duck_Head

 

38 minutes ago, bnacincy said:

It was on Charlotte Ave near I-40 across from Centennial Medical Center-my brother worked there for a while so I had a constant supply of Duck Head jeans and jackets.

I thought Duck Head was long gone.  When I was a student at Ole Miss in the early 90s, Duck Head khaki shorts were a necessity.  The only times we didn't wear the khaki shorts were to football games when we wore Duck Head chinos with our dress shirts and blue/red ties.  Until I read that wikipedia entry I had no idea that Duck Head essentially got its start at the Ole Miss bookstore.  I'm glad to see they're still around, and I'm glad to see there's also a Nashville connection. 

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11 hours ago, MLBrumby said:

I only heard about this place from the folks here.  The Tennessean has a feature on East Side Bowl (away from the tourist crowd), and makes me want to visit.  Photos look great.   https://www.tennessean.com/in-depth/entertainment/music/2022/02/22/eastside-bowl-nashville-shepards-pie-kmart-madison-nostalgia-family-wash/6670047001/

The bowling alley / concert venue is a rehabbed K-Mart... and I hope this succeeds. 

Snippet from the Tennessean... 

Eastside Bowl: Nashville’s cool new spot has a homegrown, human touch

A former K-Mart building now revamped into a stylish bowling alley and music venue, Madison's Eastside Bowl provides a comforting throwback for locals.

Dave Paulson, Nashville Tennessean
Published 10:01 PM EST Feb. 21, 2022 Updated 6:10 PM EST Feb. 23, 2022

Nashville has seen its share of brilliant comebacks over the years.

In 1980, George Jones’ chart-topping days appeared to be long gone when he suddenly returned with “He Stopped Loving Her Today.” In 2000, the Titans were 16 seconds away from losing their shot at the Super Bowl when Kevin Dyson ran 75 yards and performed the “Music City Miracle.”

Then, in 2021 – after an excruciating near-four-year absence – the city’s best shepherd’s pie started coming back out of the oven. [insert picture of shepherds pie]

Shepherd's Pie served at Eastside Bowl in Madison, Tenn., Monday, Feb. 7, 2022.NICOLE HESTER / THE TENNESSEAN

If you’re wondering why we’re making such a big deal about that last one, well, you must be new here. Over the last two decades, few local dishes this side of hot chicken were more celebrated than the pies served up at the Family Wash.

The East Nashville laundromat-turned-restaurant and music venue was a one-of-a-kind, cozy neighborhood hang – before it moved to a larger, less lived-in space in 2015, and ultimately closed three years later.

But now, that signature blend of mashed potatoes, cheddar cheese, peas and carrots with beef and lamb (or lentils for vegetarians) is suddenly back from the dead.

It tops the menu at Madison’s Eastside Bowl, which has transformed a former K-Mart into a stylish bowling alley, bar, diner and music venue.

 

It's a cool spot. relatively affordable too when you go with friends. Four of us for two hours on a lane with shoes was right around $60. Didn't try the food, but the beer selection is okay as well.

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Local engineers each choose their "Greatest Nashville engineering marvel."  Choices includes the underground brick sewers built in the early 1800s, L&C Tower, 8th Ave. Reservoir, series of Cumberland River dams for flood control,  KVB Bridge; Siegenthaler Pedestrian Bridge; Omohundro Water Treatment Plant; Gaylord Resort; The Parthenon; Music City Center; and more.

More at NBJ here:

https://www.bizjournals.com/nashville/news/2022/03/03/nashville-s-greatest-engineering-marvels.html

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3 minutes ago, PaulChinetti said:

https://www.vox.com/policy-and-politics/22951092/land-tax-housing-crisis

Interesting article. I've never heard of the idea before.

I assume, closer to the core, and around say exits on the interstate, etc, the land tax would be higher. 

I've always been interested in the idea of a Land Value Tax in Nashville. If you're curious you should look up Georgism - it's an entire economic philosophy built on Henry George's ideas, mainly the LVT. 

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https://erraticus.co/2020/01/10/land-value-tax-stronger-communities-georgism-development/

https://www.economist.com/briefing/2018/08/09/the-time-may-be-right-for-land-value-taxes

Some good articles. 

From erraticus

"Simply “not burdening economic development” is faint praise though, even for a tax system. Fortunately, land value taxes go further, creating incentives for the sort of development that creates stable and livable communities. Taxing all property equally rewards the lowest cost construction possible. Big box stores use up acres of land but build stores that cost perhaps ten million dollars and lose value rapidly. The low resale value of these buildings is even a perk for their owners allowing big box stores to slash their property taxes by claiming their buildings are worth only a fraction of the construction costs, based on the very low prices paid for similar stores. In the current system, they are not necessarily wrong—there are very few good uses for an enormous retail box with essentially no aesthetic or architectural value, and very few potential buyers as well. But rewarding corporations for creating massive, useless shells of buildings by taxing them at a far lower rate than a high quality, durable structure is perverse in the extreme. Initial construction costs are enough of a barrier to high-quality construction, but a higher annual tax is an unnecessary extra impediment. "

 

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6 hours ago, PaulChinetti said:

https://www.vox.com/policy-and-politics/22951092/land-tax-housing-crisis

Interesting article. I've never heard of the idea before.

I assume, closer to the core, and around say exits on the interstate, etc, the land tax would be higher. 

Seeing that this was a Vox article, I kinda knew what I was getting into. The problem I have with a LVT is who is assessing the value of the property, the market around it and what could potentially bring value to the land? To me, this is essentially getting municipal governments into the land speculating game and playing in a market - that quite honestly - they suck at. Not to mention this assessment would have to occur every year when it comes to tax season. I would also argue that this is very similar to a "blight tax" which is if a building is sitting empty and the owner is not doing anything to get it occupied or letting it fall into disrepair, they are getting an extra levy put against them. 

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There is already people deciding what property taxes are. 

It seems like a simple solve to a large problem. You can do whatever you want with your property but a city has a finite amount of land. So sure you can use your property in the urban core for a parking lot or leave it empty but you will pay the same in taxes as the residential skyscraper or duplex right next to you. Because that land could be better used for housing/offices/retail. 

The transition from property taxes to land value tax would be an intersting one, long how long is the transition period, who gets relief, etc.

 

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1 hour ago, PaulChinetti said:

There is already people deciding what property taxes are. 

It seems like a simple solve to a large problem. You can do whatever you want with your property but a city has a finite amount of land. So sure you can use your property in the urban core for a parking lot or leave it empty but you will pay the same in taxes as the residential skyscraper or duplex right next to you. Because that land could be better used for housing/offices/retail. 

The transition from property taxes to land value tax would be an intersting one, long how long is the transition period, who gets relief, etc.

While there are people who are already deciding what property taxes should be, are those assessments done every single year on every property or is it every four years (or so)?  Also, with the potential uses of a property being so variable (office, retail/restaurant, multi-family rentals, for sale residences) what metric would the city be basing their assessed value on when we are talking about "potential value". I think Metro would have several large challenges on their hands with clarifying how they came up with their assessed values. This is where my comment about Metro now getting into the land speculation game as what could "potentially go on that property" is extremely variable. Additionally, I believe the State has a law on the books that caps the amount of real estate/property taxes they can bring in (ridiculous!), and as a result of this law folks in Green Hills/Bellemeade have seen their tax bills drop while folks in North Nashville/East Nashville's have gone up as a result of gentrifying neighborhoods. So it would be very interesting how a LVT would work with that constraint.

That all being said, if this type of tax framework were to be implemented, I think the transition would be a long game of grandfathering in existing owners and then the new tax framework would go into place with the sale of a property. If it were to be implemented on all parcels right away there are residents/businesses that have been on some of our corridors for decades that now would now be penalized (possibly to the point of putting them out of business). I could see this plan being implemented right away on everything within the Inner Loop as a way of getting folks to develop long standing parking lots (looking at you Carrel family), but outside of the Inner Loop would get a lot more tricky. 

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