It’s a veritable PERFECT STORM!
If you are looking for a house to buy anywhere in Middle Tennessee, odds are decent that you are frustrated and disappointed with the meager selection.
Don’t blame your REALTOR . . . It’s not OUR fault (this time). We are doing EVERYTHING in our power to bring more houses into the market.
We are witnessing “Economics 101” – As supply shrinks (given equal or rising demand), prices will INCREASE.
As more Buyers continue to come into the market, “bidding wars” ensue . . . I’ve heard of as many as 20 (yes TWENTY) offers on a house that was only on the market 48 hours.
Of course, we can all just stew about it and gripe and complain, but that doesn’t really do much for ANY of us. How ’bout we zoom out to the “10,000′ view” and see if we can UNDERSTAND this situation better so we can RESPOND accordingly.
So – about this confluence of a “Perfect Storm” . . .
Just in case you didn’t notice, the National economy took a plunge that started in 2005,6,7ish. Up until that plunge, the real estate markets had (for 10+ years) been experiencing “Hyper-Growth” statistics year over year . . . It was surreal in a most pleasant way. Home Owners were ecstatic because houses became “Trade-able Commodities” . . . Anyone could buy a house and sell it 18-36 months later for a nice profit.
Most houses never became “Homes” because they were temporary. We REALTORS could actually tell most buyers that as long as they were planning to stay in the house for more than 2 years, they would most certainly be able to sell for a profit.
The average “Tenure” of home owners was approaching 3 years (the average home owner moved every 3 years). This was easy math, and a LOT of people made a LOT of profit.
As the economy (and jobs) began to whither, so did the growth and appreciation . . . and home owners began to hunker down in place to weather the storm. Some did this because they had to (couldn’t afford to sell because values tumbled) and others because they were smart . . . Nevertheless, home sales came to a screeching HALT . . . and the average tenure of home owners began increasing.
By 2007 according to NAR Statistics, average Home Owner tenure was @ 7 Years . . .
The 2013 report? @ 9 years!
Factor 1 of this “perfect storm” resulting in LOW housing inventory available is that many of the folks who would normally be reselling their houses are still hunkered down . . . They’d rather die in place than venture out onto the hostile market.
Guess what? Nashville, TN just made ANOTHER “Top 10 List.” We’re #7 of the fastest growing cities over 1 Million in population. We are an “IT City” . . . THE place to move.
That’s bringing a lot of people and jobs and money to the area, but it’s Factor #2 of this killing of our inventory of available homes for sale . . .
Because all of these people are moving in from other cities, they are taking houses OUT of our market (by buying houses) but are NOT contributing any inventory because the houses they are moving from are in other cities.
THIS is a HUGE vacuum for any housing inventory that shows up . . . We don’t have enough dirt or money to be able to build houses fast enough to satisfy this demand . . . With so much focus on GROWTH, it seems the “Character” of the city is endangered as more HUGE projects launch (there are sky cranes EVERYWHERE) . . . but guess what they’re building?
They’re building APARTMENTS because that’s where the REAL money is.
If you want a house at a “reasonable” price, you’re gonna have move out to the sprawl . . . oh . . . and by the way, we’re not going to do anything big in the way of mass transit to help you with your commute . . . because it’s “too Expensive” to invest in long term Mass transit solutions like . . . RAIL.
So . . . Here we are.
The Tri-fecta of this Perfect storm is the push-me-pull-you going on between the “In-fill Developers and the “Build like you live next door” neighbors.
The community is not happy with some of these changes . . . Oak Hill is in a brawl over the possibility of adding a “commercial district” on the Brentwood side of it for a large retail project . . . because they want the MONEY (Taxes).
Some in-fill developers have figured how to build as many as 4 large houses on a single inner-city lot . . . Neighbors are up-rising about newly proposed multi-story, Mixed-use, retail, Office, Condo, apartment buildings where coffee shops and garden centers used to be.
It’s all in flux, and no-one is happy because EVERYONE wants MORE . . . or LESS:
- More new houses
- Fewer old houses razed
- More GROWTH for Nashville
- Less Sprawl
- More Hotels, Ball Parks, Convention Centers, Hotels, Malls
- More JOBS
We want our cake, and we want to eat it too.
Let’s blame it all on the Millenials.
Shouldn’t THEY be buying houses NOW?
What’s WRONG with that generation? After all, statistically more than half of them moved home with their parents . . . and of those, a high percentage don’t have jobs . . . How irresponsible could they be?
I say that tongue in cheek because I’ve been studying these youngsters and they’re pretty darned smart.
No, most don’t have “Traditional Jobs” but they’re making money doing . . . SOMETHING!
Shouldn’t they be “Paying their dues” just like the rest of us? It seems they’re just out there doing what feels good and somehow making money.
Maybe there’s something to be learned from them 🙂
Many of them are NOT buying houses because they want to be urban . . . and they might not want to be “tied down” by the responsibility of home ownership . . . and maybe they see the writing on the wall and are doing what most of old Farts DIDN’T do . . . SAVE MONEY!
So . . . We got ourselves into this mess, and it’s not fair to cast blame and expect the next generation to bail us out.
We’ve got to deal with this Storm . . . no more “hunkering down” allowed.
We’ve also got to come out of hiding and STAND for something.
Unless you’ve been a participant in creating a solution, your complaints will fall on deaf ears.
We will get through this . . . My BIG question:
What will it all look like on “the other side?”
So . . . My call to action:
- If you’re a “Hunker Downer” WAKE UP and let’s get your house on the market
- If you don’t like what’s happening in your neighborhood, STAND UP and BE HEARD
- If you don’t like the city and Regional GROWTH, get involved.
If your choice is to keep on doing the same, you may very well have squandered one of the best opportunities in decades to make a significant impact on the future of Middle Tennessee.
I have LOTS of opinions about ALL of the above, but that’s not why I’m here . . .
I’m here to do what I know best how to do . . . get the residential real estate market MOVING.
Will you join me in my cause?
Connect with me ASAP so we can strategize a plan to get you moving from your current house to the house of your dreams.