San Antonio Business Journal – 8:55 AM CDT Wednesday, May 16, 2007

San Antonio has been named one of the best big cities in the country for relocating families by Worldwide ERC and Primacy Relocation.

The Alamo City has been ranked the 12th best metropolitan area for families based on housing affordability, taxes, leisure and recreation, arts and culture, air and water quality, cost of living, unemployment rates, crime, schools and population growth.

The top city in the country on the 2007 Best Cities for Relocating Families is Fort Worth, followed by Nashville, Kansas City, Indianapolis and Austin.

Worldwide ERC, based in Washington, D.C., is a company that assists employers relocating workers throughout the United States and the world.

Primacy Relocation is a third-party employee relocation provider. It helps employees arrange home sales, movers and overall logistics.

The two companies worked with Bert Sperling of Sperling’s BestPlaces to rate the top 50 cities with a population higher than 1.25 million to compile the list.

“Without a doubt, the state of the housing market is having a huge impact on relocation decisions of both employers and the families who are being transferred,” says Michelle Vallejo, Primacy’s president for the Americas. “The cities on this list represent some of the stronger real estate markets and places that are most conducive to a successful family relocation.”

Homes for sale numbers are down nationwide.

In fact, it is the worst drop in 18 years. Home sales plunged in March showing more weakness on the market than expected.

According to the National Association of Realtors , sales of existing homes nationwide fell 8.4% to an annual rate of $6.12 million in March from February’s $6.68 million rate.

It was the biggest one-month drop since January 1989.

While the Nashville market doesn’t distinguish between existing and new home sales, overall Nashville’s March numbers are up from February.

Overall, home sales in Middle Tennessee were up by 21% but they were down 11% over last year’s record-breaking March.

Realtor Jane McCracken said her out-of-state clients are surprised by how healthy the market is in the Mid-State.

She said, “But the days on the market are longer and the inventory is up so we are really having to work with our sellers and make sure they know that how important it is to price correctly in the beginning.”

For buyers like Jerry Kennon, the higher number of homes on the market works to his advantage.

He said, “Seems like there’s plenty to look at and there’s no lack of good homes on themarket.”

Green Hills’ home builder Rogan Allen, who builds homes in the $2 million plus range, said his particular niche is not suffering a bit.

He said, “My market is a kind of immune to that… I just sold two $2 million plus homes in the last four weeks.

Greater National Board of Realtors President Richard Courtney said its important to realize the difference between the national and local figures.

He said, “The thing not to confuse is our numbers were down compared to a record-breaking year and the national numbers are down from an already down year… Right now, our numbers have rebounded andsales are vibrant.”

Courtney said he doesn’t see any signs of Nashville following those national numbers any time soon.

Existing-home sales in the south dropped 6.2% to an annual sales rate of $2.41 million in March, and are 9.7% below what they were in March 2006.

The median price in the south was $180,700, up 0.4% from a year ago.

By William Williams, wwilliams@nashvillecitypaper.com
April 16, 2007

If you love quality urban infill development, it’s a fun time to live in Nashville.

Currently, the city’s downtown, SoBro, Gulch, Midtown and Vanderbilt University campus, collectively, have in various stages of construction eight buildings of between 10 and 21 stories.

(I tried, yet failed, to recall the last time Nashville had such significant simultaneous construction of tall structures. Readers are encouraged to email me if they have helpful information.)

In addition, there are no fewer than 25 multi-spaced urban infill buildings of two to seven floors (both commercial and residential) in the aforementioned five areas plus in Belle Meade, East Nashville, Germantown, Green Hills, Hillsboro Village, North Capitol Mall, Waverly-Belmont and West End Park.

In short, Nashville is undergoing a building boom that many second-tier U.S. cities would salivate to experience.

But like the casualties in the wake of the Don Imus fiasco, not every announced project materializes.

One example is Park 30, a seven-story retail/residential building John Hays’ Graymont Group had planned to develop near Centennial Park.

Hays says a saturated local condominium market forced him to rethink his plan for the site, located on 30th Avenue North near Poston Avenue. He will now develop a three-story, 34,000-square-foot building with space to be sold as retail/commercial space.

“We were about three-fourths through with plans when numerous condo developments or plans for them hit the market,” Hays says.

Hays says the exterior of the now-planned building, for which he currently has no name, will offer a “historic replica” feel, with a nod to 1920s architecture. Local architect Preston Quirk is handling the design, with Middle Tennessee Bank & Trust to provide financing.

The scrapping of Park 30 is, frankly, a disappointment. For its design, Hays had enlisted Nashville’s Gilbert McLaughlin Architects PLC, a progressive company known for contemporary work. Had it been built, the sleek Park 30 would have contributed nicely to the “mini-skyline” in the general area.

Hays says work should begin on the substitute project within six months and require a roughly one-year timetable.

Public art for WEP

Speaking of The Graymont Group, Hays says the company in the next 30 days will install a roughly 7-foot-tall abstract sculpture in front of its Graymont Park condo buildings at 3186 Parthenon Ave. in West End Park.

Nashville-based artist David Rahm designed the outdoor sculpture.

And on an embarrassing note…

The April 9 Creating Places — which focused on Atlanta-based developer Barry Real Estate Companies and its proposed tower to be anchored by Bass, Berry & Sims — was a mess that could rival that of the Don Imus fiasco.

In fact, many posters on the Nashville forum of urbanplanet.org ripped me for the missteps. Understandably so. Oddly, with all the attention, I almost felt like a local celebrity.

First, I misspelled the last name of local architect — and true City Paper supporter — Gary Everton. My apologies, Gary.

Second, I failed to include in the list of those high-profile and nationally known architecture companies that have designed Nashville high-rises the venerable Skidmore, Owings and Merrill LLP. The Chicago-based SOM — which is designing New York City’s Freedom Tower, by the way — was the architect for the handsome William R. Snodgrass Tennessee Tower.

Lastly, I unwittingly suggested that non-Nashvillians should not be allowed a voice regarding the design and function of the proposed Barry tower. I acknowledge that to take such a stance would be unfair, if not ridiculous.

What I meant to write, very simply, is that there are some out-of-town urbanplanet.org Nashville forum posters who sometimes criticize the design and function of proposed buildings while failing to acknowledge two points: 1. The architects of these projects are, to an extent, limited in what they can design by the developers’ budgets and desires; and 2. These buildings, imperfect though they may be, often generate a sense of community excitement and bring numerous ancillary positives to the city.

Yes, we should demand that developers and architects deliver the best buildings possible. But we must be realistic. And we must respectfully ask the out-of-towners to understand that those of us who live here and are working diligently to make Nashville a more cosmopolitan and enjoyable place sometimes find their approach tiresome and unproductive.

By William Williams, wwilliams@nashvillecitypaper.com
March 26, 2007

It looks as if Manuel Zeitlin Architects has nailed it again.

And the good people at the Tennessee Association of Realtors should be thrilled.

MZA, the Nashville-based architectural firm with the catchy name and an even more distinctive design style, seemingly has created a contemporary semi-masterpiece with the soon-to-be completed TAR headquarters building on the western fringe of Music Row.

If you’ve not yet done so, visit 901 19th Ave. S. and check out this baby.

Perhaps the highlight will be galvanized Zalmag metal shingles and panels (manufactured by Millennium Tiles LLC and rarely seen with Nashville-area construction) cladding portions of the building’s upper level.

Not to be underestimated in impact, however, are large concrete bricks (the color is called “verde;” the maker, Arriscraft International Inc.), high-performance glass, raked-roof segments, and geometric forms that float over, slide past and lock into one another.

The effect is bold — and provides a striking contrast to the Row’s old-school American foursquares and bungalows. Furthermore, when played off the stripped down starkness of the adjacent mid-rise University Square and the understated handsomeness of the under-construction Adelicia, the TAR Building becomes even more eye catching.

“It was not meant to be conventional,” says Linda Woods, TAR administrative vice president.

Certainly, conventional the building is not.

That characteristic is what makes the TAR Building noteworthy. In simple terms, Nashville has seen the construction, often recently, of far too many “safely designed” buildings. I could easily identify the names of those buildings and the developers and architects who created them. But I’ll refrain to save space and spare fragile egos.

Regardless, like the recent scoring barrage with which NBA superstar Kobe Bryant has pounded hapless foes, Nashville is being bombarded with buildings the designs for which are driven by cautiousness.

“We didn’t want a building that was like any of the surrounding buildings, but we did want a building that complemented those buildings,” Woods says.

All the more reason to enlist the services of Manuel Zeitlin and his company, for which creating generic buildings is as appealing as watching slaughterhouse flick The Devil’s Rejects on a full stomach of Indian cuisine.

Zeitlin does some interesting work, as evidence by his Mercury View Lofts Apartments building in The Gulch, one of this writer’s favorite Nashville buildings of the 2000s.

L. Lesley Beeman, the MZ Architects lead designer for the TAR Building, says he and Mr. Z have taken advantage of contextual street setbacks, facing the building on 19th Avenue and hugging it to the street to define an urban scale being redefined by the looming Adelicia.

“However, the sloping roofs, mostly masonry façade and deep side yard to the south address the residential scale at that end of Adelicia Street,” Beeman says.

The result is a very cool building.

Beeman says the TAR Building will not be LEED certified but will incorporate many “green building” characteristics (including geothermal air conditioning, bioswale surface water retention and filtering, pervious concrete paving, water and power use reduction features, natural lighting, and recycled/recyclable/low volatile organic chemicals interior finishes.

Despite its relatively smallish stature, the building is not inexpensive, carrying a price tag of about $3 million.

With that cost comes a strong team, including, among others, general contractor D.F. Chase, Inc., and PrimeTrust Bank, Green Hills (for financing).

TAR’s Woods says public response has been strong to date, adding, “I don’t think any of it has been negative.”

Nor should it be.

By Richard Courtney
March 16, 2007

The data for residential real estate sales in February were released and showed that the Nashville area experienced a decline of 1 percent as compared to last year’s record year. For another month, the area bucked the national trend of major declines, and with pending sales holding their own, it seems this will be another record year.

As a result of the increased sales year after year, inventory must rise to meet the demand. It is impossible to sell 3,500 houses each month if only 2,500 are on the market. Therefore, as sales hit record numbers, inventory will rise as well.

For the sixth month, condominium sales continued to rise and single-family home sales dropped, therefore creating a condition that some might refer to as a trend. Additionally, many of these condos are selling at prices of well more than $400 per square foot.

That situation has many scratching their collective heads in disbelief. A condo development typically has only one lot, one roof, one foundation, one footing. At times, in fact, condos seemingly offer less quality than single-family homes, which are constructed in a self-contained manner. Yet, single-family residences in this market, unlike some condo units, have yet to command $400 per square foot.

To an extent, it is the success of Mayor Bill Purcell’s affordable housing initiatives and MDHA’s tax increment financing (TIF) offerings that have sparked the appreciation of these condominiums. With the TIF program, buyers generating an annual income of less than 80 percent of the median figure could purchase Viridian units for $225 per square foot (far less than those units sold at market rate). Of note, there is no difference in the quality of Viridian’s affordable housing units that resulted courtesy of the TIF package.

Without the TIF, the development would not have succeeded at that time. And without the affordable housing initiatives that allowed the building to spring forth, 415 Church St. — which is now home to a building worth approximately $100 million and generating hundreds of thousands of dollars of tax revenue — would still be a surface parking lot.

The same condo interest is seen with ICON in The Gulch. What was once a barren field is now giving rise to a 437-unit condo development with two pools that sold out in a matter of hours. Likewise, Terrazzo — located across Division Street and with a Manuel Zeitlin design and amenity-filled 109 units — has enjoyed tremendous success. As has the under-construction Encore, located next to the Schermerhorn Symphony Center.

Despite the progress, there are detractors who continue to contend that the Nashville market cannot provide enough buyers to absorb these condos. I have heard it hundreds of times. But in reflection, I have never heard the argument uttered from a naysayer who actually lives in a condo, or has one under contract.

The aforementioned condo towers are more than a year away from completion, with the trend toward condominium construction having gained full momentum locally only within the past year. Still, the numbers speak for themselves. Nashville has had a shortage of condominiums for 15 years, ever since the savings and loan failures. Now, several developers have carved a niche in the market.

If you’ve got a niche, scratch it.

You have to compare it to cost of maintenance on a house, real estate agents say

By KRISTEN HAMPSHIRE
Special to The Tennessean

Published: Sunday, 02/18/07

The courtyard at The Enclave of Hillsboro Village is half the size of a football field. The urban condominium address features a clubhouse, fitness center and Internet cafe, not to mention a wine cellar with private bottle storage. A concierge will feed the dog when owners are out of town and help haul groceries to residents’ suites. Security cameras, on-site personnel and guarded gates provide a home-safe-home feeling.

But living the high life comes at a cost.

Condominium association fees cover insurance on all common areas of a building and finance the high-end services that new downtown developments offer. Yes, “common” includes the sleek pool you may or may not use, the manicured grounds and all that infrastructure you never see. And the 24-hour front desk — the staff doesn’t work for free.

“The definition of a condominium is common ownership, so everyone has to share those expenses,” says Newell Anderson, a real estate agent with Village Real Estate.

But Nashvillians who invest in condominiums have a greater priority in mind: convenience and location.

“If they are typical buyers, they are happy to pay the fees,” says Jane Anderson, also with Village, who is involved with The Enclave and 5th & Main developments. Figured on a price-per-square foot rate, and compared to the cost of owning a house, the monthly association fees are worth the price to some.

Costs can add up

Lisa Byrd listed her three-bedroom Williamson County home for sale and traded the maintenance responsibilities for an 1,880-square-foot Enclave condo with conveniences she’s willing to pay $290 a month for: the concierge, common areas and camaraderie. She figures it’s a deal.

“I always owned homes,” says Byrd, 50, who sells condos and wrote her own contract after working at The Enclave for three weeks. “I’m at the point in my life where I want a different lifestyle.”

As Byrd puts it, “The building is designed to take care and maintain people.” She doesn’t mind paying to care for the building that caters to her.

Condo fees in greater Nashville range from $200 to $700, or $0.15 to $0.35 per square foot for most downtown spaces. Simple arrangements such as town homes, which have fewer shared amenities, may cost $85 to $125 in association fees per month, depending on the location, says Scott Troxel, an agent with Keller Williams Realty. Fees are figured based on unit size: the more space you buy, the bigger your bill.

And, of course, “The more amenities, the higher the price per square foot,” Troxel adds. “But a lot of times, those amenities are why buyers go into a particular development.”

Newer condos such as Exchange Lofts, Church Street Lofts and Morgan Park Place charge a flat fee of about $45, then an additional fee, usually about $0.15 per square foot, says Tom Bristow, property manager for Ghertner & Co. His company manages more than 20,000 condos in Davidson, Williamson and Rutherford counties. Once buildings are sold out and condo association boards are fully elected, they may vote to raise the fees if they see a need to increase reserve funds, which is basically a condo savings account that helps defray the cost of future maintenance and repairs, Bristow explains.

In contrast, University Square on 19th Avenue South, which was built in the early 1980s, has an average fee of $1.50 a square foot. The development boasts the same amenities as newer condos — a pool, 24-hour courtesy guard, underground parking and workout room. But because repairs are inevitable as a building ages, the higher fee is necessary.

“We have to make sure the reserves are adequate to cover the costs,” Bristol says.

Many buyers understand before they apply for a loan that a mortgage isn’t their only monthly payment. But fees can work against buyers who are squeezing their budgets to purchase in a desired building. “Lenders take those fees into account when they approve someone for a mortgage,” Troxel says. “It’s tough when the property a condo buyer wants is at their price limit, and the association fee can really push them out (of a deal).”

Condominiums aren’t the only ones with shared fees. Typically, arrangements that involve zero-lot lines often form associations to cover insurance costs for shared areas. Jane Anderson has this setup and shares a lot with one other owner. “There is a set of condominium documents that cover this two-unit structure,” she says, though her fees include only liability insurance for the property.

Homeowners’ associations in housing developments also charge fees if the neighborhood has a common area or gate. “You’re probably paying less than $100 a month,” Anderson says.

The point of any association fee is to protect owners’ investments in a property. In a condo situation, operating costs to maintain high-end amenities get expensive. “When you see the budget for the salaries and maintenance considered (in the fees), they aren’t a whole lot,” Byrd points out.

Assessment can be shock

While the condo fee is predictable, the word “assessment” makes condo owners cringe. When a building faces major repairs and does not have the money in reserves to cover them, the association board votes on whether to enact an assessment. Basically, this is a bill for services, and the tab for individual owners can easily push five figures.

“You could have a pool with a crack in it, or wood siding on the exterior that is termite-infested,” Jane Anderson says. “Assessments can range from $1,000 to $15,000 for the year, per homeowner, depending on the degree and severity of the repair.”

Generally, the association board presents payment options; owners aren’t expected to write a check for the lump sum. “People who have lived in the building for the lifetime of the development understand what it costs to maintain a structure,” she notes. “But for the new buyer who just bought within the year, and all of a sudden they are faced with an assessment, the cost is surprising.”

All assessments are voted on by association members. New owners can avoid the “shock” that Anderson describes by getting governing documents, the past five years’ budgets and a history of association meeting minutes before purchase.

It’s also critical to find out how much a building has in its reserves. Usually, owners pay two months worth of fees upon move-in, and this money is invested in the reserves, which acts as a savings account for the condominium. “These reserves are invested, and in a best-case scenario, the money builds up over time and is available for exterior repairs,” Anderson says.

Stable reserve fund vital

Older buildings are more likely to pull from their reserves, and then some, to finance upkeep. And smaller developments bear a greater burden, dividing assessment sums by fewer units.

“You see some condo complexes where price points are attractive, then the association fees are — whoo!” Troxel exclaims. He saw one building raise fees from $120 to $300 a month because property management mismanaged funds and ignored repairs.

Bristow says an association may hike condo fees for a couple of years, just until expenses for repairs are covered. In University Square, a $2 million addition for exterior repairs bumped one-bedroom condo owners’ regular $309 fee to $1,406 for two years. “That is a rarity,” he says, adding that associations always vote on repairs before assessing residents with exorbitant fees.

Really, the key to avoiding excessive fees is to maintain a stable reserve. Older buildings that don’t adjust association fees regularly can allow their building bank accounts to dwindle. Then, when major repairs are in order, the money must come from residents through assessments or a sudden, drastic increase in association fees.

But for the most part, and especially in new buildings, condo fees will not increase each year. And because most of the new buildings will not need infrastructure repairs any time soon, new owners probably won’t face quick assessments. “If you buy into a larger development, it lessens the financial burden to individual homeowners,” Anderson adds.

Also, homeowners must decide what is more cost-effective: paying a condo fee or maintaining a house?

Costs can rival home maintenance

As more developments crop up in the downtown core and surrounding neighborhoods, buyers in the market for a condo lifestyle are drawn to the urban location more than anything, Troxel says.

“Some people have owned homes in the past, and they are tired of dealing with landscaping and exterior maintenance,” he says. This includes single professionals who travel and single parents who do not have time.

Troxel figured his maintenance fees on a four-bedroom home he has owned for the last 15 years. He added the costs of lawn maintenance, repairs and utilities. “It easily came in at the same level as most condo fees,” he says.

Of course, buyers must decide whether they would take advantage of building amenities. “If you never use a pool and you don’t want to pay for someone else to, that’s something to consider,” Troxel points out.

But understand, location won’t attract buyers down the road if the building’s amenities and exterior is not preserved. “For the most part, the cost (of fees) is very justified for all of the maintenance elements necessary to keep the building presentable now and to protect it for the future,” Troxel says.

Ranking the 10 top Nashville projects for ’07
January 22, 2007

And we built-environment geeks thought 2006 was big.

Brace for ’07.

The list of projects for which ground is expected be broken this calendar year borders on the dramatic.

Based on discussions with architects, planners, developers and posters to Nashville Charrette and the local forum of urbanplanet.org., let me present a Top 10 ranking (from bottom to top) of developments expected to begin this year.

The ranking is based not only on the design/function of each project but also on national significance, prestige, price tag, scale and positive impact on Nashville’s urban core.

10. Music City Central. Fourth Avenue North and Deaderick Street. A real transit hub for downtown Nashville. Almost makes me want to — as the Spike Lee film joyously encourages — “get on the bus.”

10. Station Lofts. Eighth Avenue North in Germantown. Core Development’s $6 million Station Lofts will be significant in that the sleekly designed building will provide rental units — 64 total — to a city that, with its condo craze, seems to have forgotten that not everybody wants to, or is ready to, buy.

9. Rhythm at Music Row. Demonbreun Street near Musica. RatMR will help connect Midtown and The Gulch. That alone is huge. At 14 stories and 117 units, Rhythm should pulse with energy (expects lots of well-groomed and highly educated young professionals as tenants). The design, by Norcross, Ga.-based Wakefield Beasley and Associates is very uninspired, but the building will offer office and retail space. Work is slated to begin in March.

8. Velocity in The Gulch/Pine Street Flats. 11th Avenue South. If I were a pro basketball player and known for backboard-jarring junks, I could use the name Willie “Velocity” Williams. The 267-unit Velocity (expect an August start) will be a five-story mixed-use building with a ground level of retail and four floors of residential space. Pine Street Flats, designed by Looney Ricks Kiss and set for groundbreaking in October, will offer 180 units. Standing side-by-side and carrying a roughly $70 million price tag, Velocity and PSF will be bathed in the shadow of the now-rising ICON in The Gulch. Should make for an eye-catching wall of buildings. Co-developers Bristol Development and Nashville Urban Venture are defining The Gulch. Aggressively.

7. The Museum of African-American Music, Art and Culture. Jefferson Street and Eighth Avenue North at the Bicentennial Mall. Great cities need great civic buildings. To be designed by Nashville-based Tuck Hinton Architects (as top-notch an architectural firm as the city offers), this project should deliver such greatness.

6. Ghost Ballet for the East Bank Machineworks. East Bank along the Cumberland River and next to LP Field. New York City-based Alice Aycock is designing this roller-coaster-like public art piece, set for installation this summer. At 100 feet tall and 100 feet wide, Ghost Ballet will be a civic space icon. Even if it’s ugly — and many locals think it will be — this cutting-edge sculpture is sure to draw some national attention to Music City.

5. The Westin. Lower Broadway between Second and Third Avenues. Plans for this proposed $225 million building have elicited a disturbing level of acrimony between supporters and detractors. Regardless, simply seeing the unseemly aluminum siding ripped from the gut of the Trail West building will be cathartic.

4. Terrazzo. 12th and Division in The Gulch. When Hastings Architecture Associates and Manuel Zeitlin combine to design a building, the results are sure to impress.

3. The Crown. Third Avenue South and Demonbreun in SoBro. How often does Nashville land a 435-foot-tall or taller office building? Try “not since the mid-1990s” (the BellSouth Building). Atlanta-based Barry Real Estate Companies Inc. has executed a brilliant move regarding this towering gem: hiring Connecticut-based Pickard Chilton Architects Inc. for design work. Check out pickardchilton.com to marvel at the type of out-of-town architectural firm Nashville could not have lured 15 years ago. PC’s work is, quite simply, wicked.

2. Nashville Sounds/Struever Bros. Eccles and Rouse project. First Avenue South in SoBro. Once this massive project (almost $240 million worth of built stuff, including a new ballpark) is underway, we will forget about all the headaches and watch the former Thermal site unfold like a massive Lego project.

1. Signature Tower. 500 block of Church Street. When a 1,000-foot-plus-tall skyscraper is under construction, you know your city means business. Big Sig has drawn positive international attention for Nashville — much unlike the type focus placed on the city for being the cultural capital of hayseedism. Tony Giarratana needs our support to nail this project.

William Williams writes about Nashville’s manmade environment.

The housing bubble appears to be holding up in Nashville, despite signs it’s deflating in other parts of the country. For the sixth consecutive year, home sales in the greater Nashville area reached an all-time high in 2006. There were more than 40,000 home closings last year, up more than 1,000 from 2005 .

Thriving condominium development is one reason the real estate market is so strong.

The 2006 Greater Nashville home sale figures were released Tuesday and show a sixth consecutive record-breaking year in the number of sales. Those numbers were up 3% over 2005, despite a 7.5% drop in December over the previous December.

GNAR President-elect Mandy Wachtoer said, “December, as well as the second quarter were the second best we have ever seen but we can’t have a record breaking month every month, you have to look at the long term, so one down month doesn’t mean much of anything.”

While the total number of residential homes was up slightly, the big story was the increase in condominium sales, up nearly 25% over 2005. Much of the increase can be attributed to the downtown Nashville condominium craze.

The median price of residential homes was up about 5% over last year, while condos prices wereup about 3%.

Could the housing bubble in Nashville burst? According to local real estate experts, for there to be a bubble, there has to be a rapid increase in prices and the Nashville real estate market just hasn’t seen that kind of appreciation.

When asked whether it’s a buyers or sellers market, Wachtoer said, “I think its both really; lots of inventory, good prices and a competitive market.”

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.�