But experts don’t foresee a recession for Tennessee

By ROSE FRENCH, Associated Press
December 28, 2006

NASHVILLE – Tennesseans saw fewer new jobs in 2006 and economists are projecting even slower employment growth next year, though they don’t foresee the state sliding into a recession anytime soon.

The state’s health care industry made some of the biggest business news in 2006, with hospital operator HCA Inc. going private in a $21.3 billion leveraged buyout, and drugstore chain CVS Corp. merging with prescription benefits manager Caremark Rx Inc.

But those high-profile deals didn’t equate to many new jobs. And even though employment growth increased modestly in 2006, it hasn’t keep pace with last year’s job growth rate, economists say.

Based on the most recent state Department of Labor and Workforce Development data, Tennessee’s job growth rate so far in 2006 has dropped to 1.16 percent from last year’s rate of 1.38 percent.

In 2005, that amounted to about 37,000 new jobs, while this year the state has seen about 32,000 more jobs.

“Even though it’s a lower job growth rate, it is still growing,” said Bill Fox, an economics professor at the University of Tennessee. “Yes, we’re growing a little bit more slowly, but we continue to be in an economic expansion that’s been under way the last five years. We don’t have a recession on our horizon.”

Between October 2005 and October 2006, trade, transportation and utilities jobs showed the greatest boost in jobs, which increased by 10,000. Jobs in leisure and hospitality rose by 8,700 and educational and health services jobs increased by 7,400.

Manufacturing jobs continued to suffer some of the biggest losses, with the sector set to lose nearly 8,000 jobs in 2006. Jobs in food and beverage stores decreased by 1,500 and administrative, support and waste services lost 1,200 jobs.

The construction industry cooled off, too, and job growth dropped from 2.7 percent in 2005 to 2 percent this year because of a continued weak housing market brought on by an increase in mortgage rates.

Tennessee’s unemployment rate in October was 4.5 percent, slightly higher than the 4.4 percent national rate for the month.

Fox said economists expect to see the state unemployment rate rise over the first part of next year in the face of slower job growth and higher gas prices.

Linda Davis, a labor market analyst with the Tennessee Department of Labor and Workforce Development, said gas prices definitely had an effect in cooling Tennessee’s economy in 2006.

“Something like that can affect the market across the board. If businesses are shipping things, for example, those costs are going to be higher. From the consumer point of view, if you’re talking about a shopping expedition, you are going to drive shorter distances.

“It drives business decisions as well as consumer decisions,” she said.

A report on the state’s economy issued by UT economists in October projects that the state will see 1.3 percent growth in non-farm jobs in 2006 and 1.2 percent growth next year.

“We think the first part of 2007 will be a modest growth period,” Fox said. “You’ll see the economy get better in the latter quarters. Business investment will continue to be very strong. The negative effects of housing will have kind of played themselves out.”

Some of the biggest manufacturing layoffs in 2006 came from truck maker Paccar Inc., which announced it’s eliminating one shift at its Peterbilt Motors Co. plant in Madison, with close to 667 of 1,200 workers in Madison projected to be laid off.

Alcoa Inc.’s Tennessee operations will lose 30 to 60 workers beginning in January through voluntary layoffs. The job cuts at Alcoa’s 2,000-employee Tennessee operations are part of a local restructuring independent plans by the world’s largest aluminum producer to cut 6,700 jobs worldwide to boost profits.

About 180 machinists at a Boeing Co. airliner components factory in Oak Ridge are slated to be laid off as part of a new three-year contract ratified by union workers last month.

A series of buyouts and early retirements this year have trimmed General Motor Corp.’s Saturn plant work force in Spring Hill from 5,700, to about 3,700.

The world’s largest automaker launched a restructuring plan a year ago that calls for closing 12 plants by 2008 and slashing 35,000 – nearly one-third – of its U.S. hourly workers in 2006 through buyouts and early retirement deals.

United Auto Workers Local 1853 Chairman Mike Herron has put a positive spin on GM cutbacks and said many Saturn employees have benefited by being able to go back to school or start their own businesses.

“It’s not all been negative,” Herron said. “It’s never good when you have plant closures, consolidation of the industry. But it was definitely done in a people-friendly way.”

Davis said nearly 3,000 manufacturing workers are currently on strike in the state and they’re not considered employed. But if those strikes are settled, the state may not lose all the projected 8,000 manufacturing jobs this year, she said.

Tennessee’s health care industry remains a bright spot for the state’s economy and is expected to continue to grow as baby boomers reach retirement age, Davis said.

Monday, 12/11/06

Single-family sales alone fall by twice that much; average prices still strong

By CHAS SISK
Staff Writer

Property sales fell 4 percent in November, led by a sharp decline in single-family home sales as the number of homes on the market actually fell from the previous month.

A total of 2,867 properties were sold last month, 118 fewer than in November 2005, according to figures released Monday by the Greater Nashville Association of Realtors. The decline was driven entirely by a 9 percent fall in single-family home sales.

Meanwhile, sales of condos, multifamily buildings and tracts all increased.
But despite slower sales, prices for both single-family homes and condos rose. The median price for a single-family house sold last month was $174,900, a 4 percent gain over last year. The median price for a condo jumped 17 percent to $159,900.
The number of properties for sale declined slightly to 17,175 units from a four-year high set in October. The decrease could be seasonal, or it could reflect a slower pace by area homebuilders, local real estate professionals said.
Christie Wilson, president of the Greater Nashville Association of Realtors, said the figures show the market is steadying itself after several years of rapid growth.
“2006 will be a record-breaking year, unless nothing sells in December,” Wilson said. “For the first time in a long time, this is a normal market, a very even market. I don’t think you could consider it a correction.”

For first time in five years, real estate hot spot experiences a slowdown

By CHAS SISK
Staff Writer

When he looks down Meridian Avenue, Scott Bonner sees beyond the neglect to the signs of promise: Craftsman bungalows with their attractive trapezoidal columns, tree-lined streets and sidewalks, a short commute to downtown Nashville and Midtown.

Two years ago, Bonner had never heard of this neighborhood, Cleveland Park. Now it’s where he makes his living, piece by piece turning abandoned houses on a working-class street into something a young professional would want to start a family in.

“I was worried about it, but so far, they’ve sold quickly,” said Bonner, who has renovated and sold three homes, the most recent to a young family.

That any of them would even consider buying into this until-recently impoverished area on the edges of East Nashville shows just how much has changed east of the Cumberland River in the past few years.

Throughout much of what is considered the core of East Nashville, the rehabilitation market seems to have hit its peak. Gone are the cheap, teetering Victorians that could be bought for less than $100,000 and resold after renovations for $100,000 more.

Instead, many of the investors, bargain hunters and young professionals who remade East Nashville in the late 1990s are moving west. They are buying up the neglected cottages along avenues such as Lischey, Pennock and Treutlan — streets that even many longtime Nashville residents may not have heard of — leading many to believe this is the city’s next growth market.

Their enthusiasm has led them to cross that great frontier, Gallatin Pike, which, for the better part of a decade, has demarked East Nashville’s fashionable neighborhoods.

The buzz of circular saws and bang of hammers are becoming almost as common in the triangle created by Trinity Lane, Gallatin Pike and Dickerson Pike — neighborhoods such as Maxwell Heights, McFerrin Park and Cleveland Park — as in Lockeland Springs or Edgefield.

Meanwhile, a little bit of the wind seems to have come out of the sails of East Nashville’s booming market. For the first time in five years, the area is experiencing a slowdown.

With rehabbers routinely asking for more than $300,000 for their homes, many first-time home buyers are passing up the market, real estate agents, residents and investors say.

“It’s gotten so expensive that it’s discouraging people that can’t afford to buy in, people that are making $30,000 or $40,000 and can’t pull the numbers,” said Eric Quiram, chairman of the housing committee of Rediscover East!, an umbrella group for East Nashville neighborhood associations.

Renovators also say it is getting harder to find good properties in East Nashville. Five years ago, Cindy Evans helped her boyfriend, a builder, buy a house on Gartland for $50,000. Recently, they paid twice as much for a smaller house that needs more work and sits on a far less fashionable street.

“The houses get worse and worse, and the prices go up,” she said.

Instead of attracting people who would buy a home and gradually rebuild it while living inside, the “urban pioneers” for which East Nashville is famous, the market now seems to be geared at upscale professionals who want to move into a finished product, observers say.

Investment groups are buying homes and renovating them on speculation. Many are pouring more money into the homes, with flourishes such as granite countertops and custom cabinetry.

“Home prices have increased and the values have gotten so that there’s more money you can spend on it,” said Lynn Taylor, owner of the East Nashville residential design firm Taylor Made Plans. “If you bought it for two-hundred thousand and it’s valued at five-hundred thousand, there’s more you can do.”

Evidence of East Nashville’s new clientele can be seen in some of the prices. This year, at least two homes have sold for more than $500,000, a first for the neighborhood say realty agents. Another is listed at $738,500, and a fourth, which can be used for an in-home business, at $1.5 million

But the higher prices have made some homes harder to sell. Price reductions have become commonplace, especially for homes in which renovators have not chosen top-quality materials, say agents.

“If there’s a market that’s booming in value, a lot of people are going to put their house on the market with a projection of where they think the market is going to go,” said Karen Hoff, an agent with Historic & Distinctive Homes who has worked in East Nashville for two decades. “It takes them a couple of months to figure out that maybe their house is not worth that.”

‘A fake bubble’

Meanwhile, people such as Chris Weigel are jumping at the chance to buy in northeast Nashville. Weigel, 28, an account executive, and his wife have been house hunting since moving to East Nashville two years ago. In the end, they agreed to buy Bonner’s Craftsman bungalow on Meridian for $180,000, even though it is months from completion.

“It’s a real estate bubble, like a fake bubble,” he said of the housing market in the traditional East Nashville neighborhoods. “They’re trying to push the envelope so much that they’re driving up prices.”

The deal is contingent on Bonner’s completing the renovations to the Weigels’ satisfaction. Last week, Bonner and another worker were rebuilding the roof of the house’s wrap-around front porch. Inside, he had already ripped down the house’s acoustic-tile drop ceilings, pulled up its nasty shag carpeting and rebuilt a fireplace that had been covered in ’70s-style tile.

The situation with the Weigels is a reversal of roles for Bonner. Eleven years ago, he purchased a home undergoing renovation in a neighborhood near Belmont University. Since then, the value of Bonner’s house has more than tripled. That equity has financed his move into construction.

Bonner bought the house on Meridian for $66,100 in September, beating out a dozen other bidders. (He declined to say how much he will spend on renovations.) With each house he has bought and renovated, he has had to pay more. But each time, the house has sold within a week of being listed.

That has allayed the fears he had when he first went into the Cleveland Park market.

“I was worried about whether I was going to find a buyer,” he said. “I would get people who would stop and say, ‘How much are you going to rent it for?’ There are a lot of people here that don’t even consider buying.”

Buyers in northeast Nashville face risks as well, crime chief among them. Bonner said that, despite a notice from the sheriff stating there was nothing of value inside the house on Meridian when he bought it, thieves had stolen all of the copper pipes when he took possession.

On top of that is the concern among some buyers that they are gentrifying a new area.

“I feel conflicted,” said Heather Talley, a Vanderbilt graduate student who bought a century-old Victorian in the Cleveland Park neighborhood a little more than a year ago. “I do know that by being another white face on this block, I make other white people who do have more money more willing to buy in this neighborhood.”

But for a certain kind of person — someone with an inclination toward urban living and little money — these streets may soon be the place to live.

“Value has a lot to do with why we’re moving into that neighborhood,” Weigel said. “But that said, we could have easily moved to Mt. Juliet and Spring Hill and all this kind of business for a lot cheaper.” •

By Amy Griffith, agriffith@nashvillecitypaper.com
October 17, 2006

In the wake of a recent Moody’s Economy.com study documenting the downturn of housing prices in 130 metro areas, economists say Nashville’s housing market should continue its current trajectory of slow, steady appreciation, insulated from national fluctuation by its diverse economic base.

Moody’s West Chester, Pa.-based economist Charmaine Buskas said Nashville didn’t experience the same spike in house prices that affected the rest of the country, and consequently will not experience a plummet.

“[Nashville’s] housing market hasn’t seen the type of activity that other cities have seen,” Buskas said during a telephone interview. “That’s not to say it’s not been a positive driver for the economy. It just hasn’t seen the same, dramatic influx.”

The metro areas identified by Moody’s account for nearly one-half the value of the nation’s single-family housing stock. A price downturn is already in progress in these areas, and is expected to affect national housing prices within a year.

Price crashes are forecasted in 20 metro areas, particularly those along the southwest coast of Florida and in the Southwest.

The price drops are the result of dramatic upswings in 2000 and 2001. Low interest rates combined with an uncertain stock market to trigger a massive surge in real estate investment. Moody’s also attributes the housing boom to collective national nesting instincts in the aftermath of Sept. 11, 2001.

But Nashville prices have moved more slowly than national prices. Locally, prices began to move upward in 2002 — at least a year after national prices skyrocketed — and continued to grow at a modest 3-5 percent each year, according to figures from the Greater Nashville Association of Realtors.

GNAR President Christie Wilson described Nashville price appreciation as, “slow and steady, and I say that as a total positive. When you start seeing appreciation rates of 25 percent, you have nowhere to go but down. But a 3-5 percent increase is something you can sustain.”

“While Nashville has not had the same degree of appreciation that either the nation or other similarly sized metros had, as the national market is turning down now, house pricing in Nashville still seems on an up trend,” Buskas said.

Housing price growth has occurred locally – the median price for a home in Davidson and its surrounding counties was $178,900 last month, up from $162,610 in September 2005, Wilson said – but the city’s housing price median is typically well below the national median.

Buskas attributes local housing price growth to expansion of the local economy, as opposed to surges in real estate investment that drove prices nationally. Furthermore, Nashville’s economic growth stems from the health care industry and business headquarter relocations to the area, neither of which is likely to cause fluctuation in the private housing market.

Business relocations tend to put pressure on commercial real estate prices, including construction costs and the industrial and office space sectors. Individual home prices are insulated, as many corporations moving to Nashville hire from the local employment pool.

Wilson said Nashville also has not seen the amount of real estate speculation experienced by other cities. Real estate “flippers” — short-term investors who purchase a home only to resell for a profit in several months — are outnumbered by renovators.

“The renovators have done nothing but make neighborhoods that were once considered blighted are now hip, cool, desirable places to be,” Wilson said.

By Richard Lawson
09-28-2006 6:11 PM —

Bristol Development is hoping there is plenty of velocity in sales of condominiums in The Gulch, so much so that the developer has named its latest would-be project Velocity.

Talk has circulated since this summer that Bristol Development had such a project in the works, even apparently creating a web site for the eventual sales effort. Bristol principal Ashlyn Hines confirmed this afternoon that the project is in the advanced design stages.

Hines said the six-story project would have 200-220 units, ranging in size from 525-550 square feet to 1,000-1,100 square feet. Prices would come in under 300,000 and start in the 160s, she said. That price range is below Bristol’s 424-unit Icon, which were in the range of $175,000 to $850,000.

At the same time, she said Bristol would build a separate project with about 120 rental apartments above ground level retail. That building doesn’t have a name yet. Both projects would go somewhere along 11th Avenue South in the old rail yard, part of which is currently used for parking. Hines said, too, that Pine Street, which dead-ends into 11th, would be extended.

Hines promises that Velocity’s design won’t be like anything else in Nashville. “We have traveled all over the country outside the South and looked at some really cutting-edge designs that weren’t in Nashville,” she said. Hines said the interior finishes also would be unlike anything else found in Nashville. She didn’t want to disclose just yet the types of urban projects she and her team looked at elsewhere or the types of finishes planned for the units.

The sales office is scheduled to open next March. Hines said the plan is to start construction in June and open 18 months later. Unlike with Icon, or many other big urban condo projects that Bristol and others have under construction, the developer won’t be taking reservations, Hines said. It will be first come, first served as Bristol goes immediately to sales contracts on units.

Icon’s first 217 units sold out in 48 hours. Bristol put 207 units originally planned for rental apartments up for sale, and those sold out quickly, too. In real estate circles, the sales pace has drawn some skeptics who questioned whether sales were driven more by investors speculating or buyers who will actually live there. Bristol officials have said in the past that there probably are some speculators, but determining the exact number is difficult.

Still, the units are sold. The planned apartment project, however, won’t be converted to for-sale condos if Velocity’s sales are as brisk. “We are absolutely going to keep those as long-term rental,” Hines said, adding that rental is a stated goal of Marketstreet Equities, Bristol’s partner and the master developer for The Gulch.

Meanwhile, Bristol is looking at another site in the West End area – the corner of 31st Avenue and Long Boulevard. That area is hot now with developers building hundreds of condos and town homes. Hines said that project would have 150-200 units. “We’re still on the fence on whether it’s something we want to do,” Hines said.

By Will York, News Correspondent
August 10, 2006

Despite sluggish national residential real estate sales figures, the Nashville market continued showing steady growth in July, with 3,976 closings during the month.

With national forecasts predicting a 6.5-percent drop in existing home sales, Nashville closings represent a 4 percent increase compared to figures from July 2005, when the market saw a record 3,819 sales.

The sales report, released Wednesday by the Greater Nashville Association of Realtors (GNAR), also shows a 5.9 percent in year-to-date closings during the same period last year. The association reported 23,249 year-to-date closings for the multi-county statistical area.

Although July’s sales were up compared to those of last July, sales dipped about 2 percent from June’s record 4,060 closings.

But GNAR President Christie Wilson said June is typically the best month for the market because many families relocate during the summer.

“[July’s figure] is still a great number,” Wilson said.

“You hear about rising inventory, rising interest rates [and] a slowing national economy and think [the market] can’t be improving,” she said. “Somehow, it is.”

Wilson added Nashville’s real estate sales figures are healthy and are not increasing too rapidly.

However, increasing home prices may be a matter of concern, according to Walter Molony, analyst and public affairs officer for the National Association of Realtors.

The median residential price for a single-family home in July was $180,300, up from $139,800 in July 2005. In the first quarter of 2006, Nashville home prices were up 8.7 percent from the same period in 2005, while analysts forecast a lower, 4.7-percent price increase nationally for the year.

Even though July home inventory was at a record 16,170 homes, up 16 percent from July 2005, Wilson and Molony both agree demand is increasing more aggressively than inventory, thus driving up prices.

The Nashville market experienced a four-month supply time, while national supply is closer to eight months. Nashville’s lower market supply time is another factor driving prices up and favoring a seller’s market, Molony said.

But Nashville’s $180,300 median price still remains well below the national $229,000 figure, and Wilson said she is not concerned with increasing prices, citing recent reports showing Nashville as being “fairly priced.” She added Nashville has real estate options at many cost points.

Molony agrees Nashville’s real estate market is still extraordinarily strong compared with those of the rest of the country, saying rising interest rates are secondary compared to strong jobs growth in the Nashville area. Stronger employment, he said, is an important factor propelling Nashville’s strong market.

Molony characterized the national real estate as “a tale of two markets,” with high-priced markets seeing a slowdown and cities like Nashville experiencing strong growth.

Despite a generally pessimistic attitude surrounding the national housing market, Molony said the national market is beginning to stabilize.

“The market is leveling out and will plateau,” he said. “We’re in the process of stabilization.”

By Bruce Dobie
August 01, 2006

Some two decades ago, Eddie Jones slipped his cigarettes into his coat pocket and turned out the lights to his Chamber offices for the last time. As the business organization’s longtime leader, Jones wanted to pursue other opportunities, including run for mayor. Watching him leave, many remarked Jones could never be replaced. They weren’t just being nostalgic; they were right.

Equally at home with the city’s moneyed classes as with the rougher underworlds across the river, Jones played the roles of diplomat, henchman, peacemaker, public relations impresario, and political strategist. In ways both magical and mysterious, he comfortably dispensed with the aims of the business community. His portfolio also included running Watauga, the city’s ultra-secret group of businessmen who were always up to something. In whatever he did, Jones rarely left fingerprints.

By the time Jones departed, the city had begun a slow and inexorable march into something more democratic and transparent. If Jones had to make five or six calls to the city’s decision makers to get the ball rolling, his successors had to make 100. The Chamber was having to readapt to a different Nashville, one roiled by increasing immigration, a more decentralized power base, and the sales of locally owned businesses. Watauga was fading out of existence; a Yankee (Phil Bredesen) was considering a mayoral bid. Would Martians be landing soon?

There were certainly ups and downs to this transformation. Jones was barely out the door when the Chamber hallways fell into a power vacuum. Soon, there was a power grab. As the dust was settling, the first director post-Jones — an intelligent and visionary victim named Keel Hunt — was shown the door.

The next director, Mike Rollins, was a shy fellow whose name recognition in the city never budged in the 12 years he was here. Rollins nevertheless tried to open up the Chamber to allow for new voices, pushed a vision for a strong downtown, and brought in his share of relocating businesses. If an introvert, he had the right idea.

Then, in a total about-face, the Chamber hired Mike Neal, a gregarious, back-slapping, and content-free executive. Upon introducing himself, Neal would often describe himself as a redneck from Louisiana, thinking that fit nicely in the city that gave the world Hee Haw. How little he knew.

Neal has announced he is moving to Tulsa.

For the next several months, Nashville will try to find a new leader for our Chamber. What should we want?

A new Chamber leader needs to understand the people, culture, institutions, character and power structure of the city. A new leader must have an ability to build public consensus through both public and private channels. A new leader should be able to develop an agenda that is both good for Chamber member businesses and for the city. After all, what’s good for the city should be good for our businesses.

But before we start the interviews, it would be nice to figure out how we’re going to get it right this time.

By Bill Harless
July 10, 2006

In an unlikely turn involving the local food scene, a North Nashville street corner in walking distance of several public housing projects has become one of the city’s most popular sites for buying organic produce.

“Peaches, tomatoes, zucchinis, squash, you name it — if it’s growing, we’re trying to sell it in this area,” counted off Darcy Freedman, a Vanderbilt University grad student who helped launch the River West Produce Stand earlier this summer. Of note, Freedman said the stand sold out of produce during its first day of operation, a Saturday in mid-June.

The stand, which will operate every Saturday from 10 a.m.-2 p.m. for the next several weeks, is a partial answer to this problem: there are no grocery stores within walking distance of the Hadley Park, Preston Taylor and Tomorrow’s Hope neighborhoods of North Nashville.

Because many of the area’s residents lack cars, a Kroger located a few miles away on Charlotte Pike is often of minimal use.

“How would you get over there to buy food?” Joyce Searcy, executive director of the Bethlehem Centers of Nashville, said in an interview last week.

The result, Searcy said, is that many residents patronize smaller markets not known for a large selection of nutritious offerings.

“They end up eating high-fat foods,” Searcy said, listing the readily available potted meat, beer, processed white bread, and snack food.

“All of that contributes to obesity and coronary disorders,” Searcy lamented. “And if a woman is pregnant, then there’s mental disorders and physical disorders for the child.”

Freedman said the River West stand, which is manned by neighborhood teenagers Dominique Moore and Corey Hemming, was her idea but that it is “a response to the community.” Since 2003, Vanderbilt has staffed a small center that has partnered with North Nashville neighborhood associations to improve the area, and the dearth of produce has been a subject of study since its inception.

The River West stand cost slightly less than $10,000 to set up, according to Freedman, who said the fruits and vegetables are purchased primarily from Smiley’s Produce at the Nashville Farmer’s Market and from Franklin-based organic farm Delvin Farms. And soon, the Bethlehem Centers will start sending produce from its volunteer-tended two-acre farm at Camp Dogwood near Ashland City.

Rev. Thomas Henderson, who directs the Camp Dogwood project for Bethlehem, said he has been lecturing at community organizations across town for four years about the “food security” problem. Finally, he said, some action is being taken.

The stand’s produce is selling primarily at market prices, “so it’s not a give-away program,” Freedman said, adding that the first-week sell-out has refuted a notion “that people in this low-income community wouldn’t spend their money on produce.”

“We are meeting a need that is a desperate issue for this community.”

By Will York, News Correspondent
June 09, 2006

Despite slowing national housing sales, May saw an uptick in Nashville’s residential market, showing 3,753 home sales closings.

This represents a 4.2 percent increase over May 2005’s 3,600 figure.

The sales report, released by the Greater Nashville Association of Realtors (GNAR) on Thursday, also shows a 16 percent increase in May home sales over April.

The Nashville market, a multi-county geographic area as viewed by GNAR, reported 3,236 closings in April.

Year-to-date closings were also up compared to the May 2005 year-to-date figures, an 8 percent increase.

Christie Wilson, GNAR president, said Nashville is poised for continued growth based on May’s record number of pending sales. There were 3,894 sales pending at the end of May, the largest number recorded by GNAR for any one-month period.

Additionally, home inventory numbers topped 15,000 for the first time since July 2004. The realty association reported 15,400 homes in inventory during May.

Wilson said there is good news for both buyers and sellers in the Nashville real estate market.

“Our inventory levels mean great news for buyers because there are more choices on the market,” she said. “The good news for sellers is the steady rise in median price.”

The median price for a single-family home climbed to $179,900, a 12.5 percent increase compared with the $159,900 May 2005 median price. The median price for a condominium rose to $143,900, a 6.6 percent increase over the same period last year.

The National Association of Realtors recently predicted a 6.2 percent drop in existing home sales and a 13.4 percent drop in new home sales in 2006. Steadily increasing interest rates are attributed to slowing sales.

However, Wilson said Nashville’s market continues to grow at a steady, moderate pace, in the opposite direction of the national market. She added the “housing bubble” experienced in many parts of the country has yet to make its way to Nashville.

“The gains we are seeing in Nashville are healthy, sustainable gains. There are no spikes,” Wilson said. “We’re much stronger here than the rest of the country.”

Wilson attributes Nashville’s diverse economy and increased corporate relocations as a contributing factor in Nashville’s continued real estate growth.

Costs rise for third month in row to $172,900 median
By CHAS SISK
Staff Writer

Published: Wednesday, 05/10/06

The price of a house in the Nashville area rose for the third consecutive month, but condominium prices fell, according to the latest data from the Greater Nashville Association of Realtors.

The median price for a single-family house rose to $172,900 in April, up 2 percent from March and 12 percent from a year ago. The median price is the highest since December, when it set a record of $174,900.

“These are really solid numbers,” said Christie Wilson, the association’s president and managing broker of the Wilson Group Real Estate Services.

The median sales price of a condo, meanwhile, fell for the fourth straight month to $134,040. That’s 4 percent less than in March and 20 percent less than the record price of $168,275 set in December.

But the median price for a condo was still nearly 12 percent higher than a year ago.

Two factors have combined to temporarily drive down closing prices, agents said. One is a lull in condo sales in central Nashville. The biggest deal in the condo market last month was the 423-unit Icon in the Gulch on 12th Avenue South. Buyers in that building are making reservations on units, but the sales contracts will not actually close until construction is completed in 2008.

The second factor is a rise in the number of condos being built in outlying areas, such as Wilson, Rutherford and Cheatham counties. Prices there are typically lower than in the downtown area.

“(The drop in prices) doesn’t really compute with the image that I’m seeing,” said Mark Deutschmann, founder of Village Real Estate, a Hillsboro Village firm that specializes in downtown condo sales.

Other indicators suggest demand will remain high and prices will continue to rise throughout the housing market.

The total number of houses and condos for sale has risen 8 percent over the last year to 14,984 properties on the market at the end of April. But the number of closings in April held more or less steady at 3,236 properties, up about 3 percent from a year earlier. The average time a house remains on the market has also fallen by a week, to 63 days.

“We have not had a dip,” Wilson said. “To me the very intriguing thing is the level of buyers and sellers that are out there.