“Nashville Condo Craze Will Slow In ‘08, Experts Say”
While dozens of condominium projects have been popping up all over Nashville, in 2008, developers may have a harder time getting loans from the bank for new projects.
According to Nashville real estate experts, over the last few years less people have been buying the condos being built.
Soon, experts fear, there will be more supply than demand.
Richard Lawson, The City Paper , said, “Right now, folks are taking a step back a little bit and watching, perhaps, taking more time and care before they start to build again.”
That slow-down in the condo market is one that banks like Regions are picking up on.
Regions Bank said before backing a developer, they make sure a certain number of condos have already been sold, before construction even begins.
That is to ensure Regions will get their loan money back, once construction is complete.
If there aren’t enough of these pre-sales, Regions will not let the developer borrow money.
Jim Schmitz, Regions Bank, said, “So go the pre-sales, so go whether we make the loans or not. We’re really reacting to the market place. The national market is slowing down and Nashville will eventually follow that.”
Just because the market may be slowing now, Regions said as soon as sales pick up again, they will be willing to give out more loans. It is just a matter of time.
The chief executive of one of the nation’s largest mortgage finance companies, Fannie Mae, said that the housing market will weaken through 2009, with a turnaround unlikely until at least 2010.
Fannie Mae CEO Daniel Mudd also said that a new plan orchestrated by the bush administration to help distressed homeowners with high-priced mortgages “is an important step.”