Real Estate Prices. Is the sky the limit? (Memphis, Brentwood: houses, buy)

[krush40]

So technically the taxes can just go up up up forever?

Although I can't imagine property values anywhere will see the growth that occurred from the 1940s till now. Even if a house increased in value by a few hundred thousand (in a dream situation), taxes would only go up by roughly 50% ish.

Not like the beach communities here where people bought property for $30k way back in the day and is now worth multi-millions.

[N.Cal]

by a few hundred thousand (in a dream situation)

Not such a dream in some neighborhoods.

[Siamese Kitty]

My property appraisal went up 100% from 2009 when I had it reappraised this year. (Mind you this was a house we put some elbow grease into to say the least!) I'm in South Nashville near town.

I'd count on multiple offers and in many cases, the sales price is a starting point for bids. This can be frustrating on everyone's end, especially when something is so underpriced to incite competition that you end up with 30+ bids in the first day. (like a property I had a buyer on a few weeks back-ugg) Please have your agent run comps prior to make sure you don't get in over your head, but that you offer accordingly.

The areas you mention in the OP have been desirable for a long time and probably will continue to be. There is a decent amount of housing demand in those markets that is driven by school zones and proximity to the universities. (Vanderbilt, Belmont, Lipscomb)

[Siamese Kitty]

Originally Posted by N.Cal

This will be interesting to follow.


I live in the urban core and bought a townhouse (2 units each x 2 buildings = 4 in total). They are brick and were built back in 2008 but never finished when the market cratered. Fast forward to late 2012 and they were sold and finished and I was buyer #4 (all sold very quickly). I closed in June 2013 and was just reappraised last month - a 72% increase. Makes it very tempting to take the money and run.


They are now building 2 duplexes in my block - one to the north, one to the south. They aren't that far along, but the farthest along is the hardiplank and doesn't look as nice as ours. But it sure beats the tenement house they tore down. Not sure of what they will be asking on them. There are also 6 or 8 units in the next block that are close to ready. Plus the "cottage house" development a block away. Those are selling pretty much as soon as they get finished.


Being 10 minutes (depending on how many stop lights you hit) and walking distance to all the Germantown restaurants, the ballpark and the Farmers Market is a huge plus and hopefully prices will stay where they are and go up.




Depends on the neighborhood. In the north end, I'm sure there would be multiple offers. I've traded emails with my realtor and she says it's crazy busy.

I'd hold onto that one! What does your realtor say?

[N.Cal]

Originally Posted by Siamese Kitty

I'd hold onto that one! What does your realtor say?

She says she would bet big money that it will be the property going up the most in value of anything she's sold in about 20 years of selling real estate in Middle Tennessee. And she was selling back when those tiny houses on Monroe in Germantown were hard to sell at $90K.

[Hey_Hey]

One important caveat to the reappraisal...during reappraisal years, just because your property went up 20% DOES NOT mean that your taxes will go up 20%. It is actually possible that your taxes will go down even if you saw some appreciation. Tennessee caps a city/county at a set total amount of revenue for the entire municipality before and after reappraisals. If Nashville collected $1 billion in property taxes in 2016 prior to the reappraisal, then it will collect $1 billion after the reappraisal (assuming there is no change in the property tax rate). This is setup this way so that governments don't see huge gains during hot real estate markets and huge losses during bust markets.

To estimate what your taxes will requires two pieces of information: How much did the county, as a whole, appreciate over the last four years? How much did your individual property appreciate over the last four years. If your property appreciated less than the county as a whole then you will pay less in taxes, even if you home is actually worth more. If your property appreciated equal to the county as a whole then you will pay the same amount. If your property appreciated faster than the county as a whole then your property will face higher taxes.

[Hey_Hey]

As for where property values go....

As long as the national economy stays strong I don't see Nashville's real estate market falling. It may cool off from the 10% annual appreciation we've seen over the last 4 years, but it won't collapse. However, if there's a national recession, housing bubble, etc., then all bets are off.

Fundamentally, real estate is supply/demand game. For Nashville the supply is relatively low and the demand is relatively high. The Nashville MSA is adding between 80-100 people PER DAY. That equates to a housing demand of around 35-40 units/homes PER DAY, or around 14,000 additional units/home annually. To put that into some perspective, Nashville's new residents are demanding the same amount of units as a new TwelveTwelve condo in the Gulch or the entire Brentmeade subdivision in Brentwood EVERY WEEK. Clearly, development doesn't happen that way, and the living choices of people are varied, but it does illustrate the scope of the housing shortage.

What I do think will happen is that we'll continue to see shifts in where the appreciation is happening. Places like Green Hills and 12South will likely slow down the appreciation because of the price ranges they are hitting. A million dollar home is not going to see the same appreciation in the short term that a $200,000 house will IMO. The sweet spot for home builders, IMO, is going to be units that are 3 bedrooms, 3 baths with an entertainment area and around 2250 sq feet. These will sell in most of the core neighborhoods for $400,000-600,000.

In a real estate downturn I see the horizontal property regimes devaluing faster than single family properties, but I would disagree that it is because of the hardiboard that is on the outside of the homes. Clearly, brick will be worth more, but hardiboard is a good product that lasts longer and has less maintenance than wood planks. What's more important is the inside features. Are the builders putting in light fixtures, faucets, and carpet from Home Depot, or are they installing 3/4" wood floors throughout with custom built-ins and high grade granite or marble as counters?

[bigcitymike]

Originally Posted by N.Cal

Yeah, I know how CA taxes work - I lived in SF for 19 years and NorCal for 25.

I do miss N.CA at times (Gold Country), then I'm reminded why I left (in no particular order):

1. Cost
2. People/Social
3. Population
4. Laws/Regulations

[septimus]

Originally Posted by krush40

So technically the taxes can just go up up up forever?

Although I can't imagine property values anywhere will see the growth that occurred from the 1940s till now. Even if a house increased in value by a few hundred thousand (in a dream situation), taxes would only go up by roughly 50% ish.

Not like the beach communities here where people bought property for $30k way back in the day and is now worth multi-millions.

Your assessment can go up, but the county can't use the assessment process to raise taxes. Last time Williamson County had an assessment, property assessments went up. The tax rate at the time was something like 2.31 because the value of the property assessments went up the tax rate was lowered to 2.13. .The county commission then voted to raise taxes back to 2.31 but they had to vote on it. It wasn't an automatic increase in revenue because property values had risen. (my numbers may not be exactly right but hopefully give you a better understanding of the assessment process.) My assessed value actually went down during the last assessment.

[septimus]

To the OP. I've been in middle TN for 9 years now and I still wonder where all the money comes from. There can't be that many jobs in Nashville that pay $200k+ to afford all these $800k houses.