Housing crash finally hitting Nashville. 25-30% drops. (Franklin, Brentwood: sales, foreclosures)

[sliverbox]

Well... We've been talking on here for awhile about how overvalued places like Franklin, Brentwood, and Lavergne are. Now here's some proof of what happens when they are in fact too expensive. The good news is: cheaper homes!


Homeowners Feel Pain Of Bankrupt Builder - Money News Story - WSMV Nashville

NASHVILLE, Tenn. -- Property value for thousands of homeowners in middle Tennessee is sinking even lower than they may realize.One builder going bankrupt was a large part of the problem. Almost 200 Corinthian homes are either going into foreclosure or may end up there soon.

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[Dd714]

A somewhat misstated article. How can prices drop 25% to 30% in an area of the country that already has some of the lowest housing prices in the nation?

The answer - it doesn't. It drops 25-30% for those houses in the unfinished communities that haven't even been priced on the market yet. These are new houses, or maybe houses not even complete yet. The market price hasn't even been established yet so how can they claim a 25-30% drop? 25 or 30% of what? What they hoped to sell it for in 6 months when the house was complete? These are builders that are foreclosing, not owners.

The effect is very very localized. Slowdown and discounted houses have an effect, but for only a localized segment. In fact, since these are unfinished homes and can't be put on the market, they potentially have absolutely no impact on the housing market. They just get stripped.

The reporter should be b**h slapped for inaccurate and rabid "sky is falling" reporting.

[Mary_Moon]

Originally Posted by Dd714

A somewhat misstated article. How can prices drop 25% to 30% in an area of the country that already has some of the lowest housing prices in the nation?

The answer - it doesn't. It drops 25-30% for those houses in the unfinished communities that haven't even been priced on the market yet. These are new houses, or maybe houses not even complete yet. The market price hasn't even been established yet so how can they claim a 25-30% drop? 25 or 30% of what? What they hoped to sell it for in 6 months when the house was complete? These are builders that are foreclosing, not owners.

The effect is very very localized. Slowdown and discounted houses have an effect, but for only a localized segment. In fact, since these are unfinished homes and can't be put on the market, they potentially have absolutely no impact on the housing market. They just get stripped.

The reporter should be b**h slapped for inaccurate and rabid "sky is falling" reporting.

ITA. This is a great example of irresponsible and sensational reporting. The housing bubble in the Nashville area was not as exaggerated as in other places in the US and we are simply not going to see huge declines in home values across the board.

[akm4]

Amen. Talk about sensational journalism!

[Mike in TN]

Where do you think we will see the biggest drops in the Nashville MSA?

I think it will be in the $250K+ homes.

[scongress1234]

funny that the ad in the story is for a mortgage company

[CAwine]

Nashville will be one of the last metro areas to enter the housing bust. It is already happening. It is also interesting that some of the rust belt cities are already emerging from the bust. Oh the ebb and flow of the market..

[bnewman]

The 'drop' has been in the NUMBER of sales...NOT the prices...check the May numbers from the Greater Nashville Association of Realtors or the Williamson County Association of Realtors. Sales are indeed down from this time last year, but prices remain stable.

We are very fortunate to be in this market here...yes, it is frustrating as a realtor combatting negative media on a daily basis. But the fact is that we in middle TN are in a great position with our diverse economy to weather this 'storm' that so many other markets are struggling in right now.

Inventory is up (that is a fact)...it's a great time to buy. That is my story and I'm sticking to it!

[Mike in TN]

Originally Posted by htmlfamily

Nashville has some of the lowest housing prices in the Nation

The average sales price of a home is about $202,300. The median sales price for homes in Nashville, for the quarter ending May, 2008 was $140,000.

That is simply NOT true.

It's not the lowest in the nation, but if fares quite well for a decent sized metropolitan area.

They are on par with Palm springs and Rancho Mirage, CA

Median sales prices and price per square foot for the quarter ending May, 2008

Nashville, TN $140,000 $122
Palm Springs, CA $275,000 $273
Rancho Mirage, CA $550,000 $252

[Big TR]

The article is bogus, but I can already see the market acting like the Chicago market and slowing down. I just moved from suburban Chicago to Franklin a few months ago.

Up there it started with builders offering amazing discounts/upgrades on new homes in the 10-15% range. Spec / inventory homes began sitting for months on end. Then developers/builders either went bankrupt or simply abandoned projects. Tightened credit wasn't allowing marginal buyers to get into their first starter home. Those wanting to move up from their starter home were either stuck selling at a loss or staying put. This was coupled with numerous foreclosures on those marginal buyers who got a mortgage a couple years earlier and now couldn't afford their new, higher ARM payment. You can see how this ripples up the property ladder.

It won't be as bad here in Nashville as it is not as overbuilt as Chicago, but I think that there will be fallout from this through most of 2009.