Ole South Properties owner John Floyd has a simple answer for why Rutherford County and Murfreesboro homes are selling for 35 to 40 percent less than those in Williamson and Davidson counties: income.

“We build houses people can afford,” says Floyd, the most prolific builder in Tennessee.

While Murfreesboro and Rutherford County tend to bring in manufacturing jobs to supply the Nissan plant in Smyrna, Williamson County is a magnet for white-collar types, attracting the Maryland Farms business park in Brentwood decades ago and drawing the Nissan corporate headquarters to Franklin when it moved from California in 2008.

The result is average incomes in Williamson County are nearly twice that of Rutherford.

In that scenario, prospective homebuyers in Williamson County can hardly get into a new home for much less than half a million dollars, explains Floyd, who founded Ole South more than 40 years ago.

“The market is there because the big-income people, for whatever reason, all migrate to Williamson County. Davidson County’s kind of got the haves and the have-nots,” he says, adding Lebanon and Shelbyville are much smaller than Nashville but have similar housing clientele.

Murfreesboro, Smyrna and La Vergne, though, fall into a comparable demographic in that a large percentage are factory workers, Floyd explains.

“We live in a wonderful area, but we’re a blue-collar county,” Floyd says.

As a result, a $350,000 home is considered luxury housing in Rutherford while a new home in that price range doesn’t exist in Williamson.

Million-dollar home sales are few and far between in Rutherford – fewer than 10 since 2010 and none this year – while they proliferate in Davidson and Williamson counties, Chandler Reports (www.chandlerreports.com) sales data show.

Rutherford has had three homes sell for $900,000 or more this year.

Davidson County, meanwhile has had 321 sales of $1 million or more this year, followed by Williamson (199), Sumner (13) and Wilson (8).

Rutherford County’s average household income is $55,096 and income per capita is $25,057, compared to Williamson County’s average household income of $91,743 and $42,675 per capita.

The average household income in Davidson County is $47,434 and income per capita is $28,971.

Still, Rutherford is seeing home sales prices increase each year, similarly to most counties surrounding Nashville, where gentrification is driving prices of old homes in East Nashville into the half-million-dollar range, and new townhomes are being marketed at $500,000.

In August and July, Rutherford’s average home sales prices increased to $255,500, up some $20,000 from a year ago.

Over a longer period, average sales prices jumped to $251,488 in 2017 from $175,944 in 2013, going up about $15,000 to $20,000 each year.

Rutherford County’s median price rose to $235,500 in the second quarter of 2017, up from $209,362 the previous year, while Davidson County saw median prices hit $285,000, compared to $265,000 in 2016, according to Greater Nashville Realtors.

Williamson County’s median price rose comparably to $457,462 in the second quarter of 2017, up from $430,842 the previous year.

The new home market for Rutherford County ranges from $200,000 to $375,000, and “affordable” housing in the $160,000-plus range comes in the form of townhomes, Floyd says.

Floyd points to his development, Evergreen Farms, as a keen example of the housing trends in Murfreesboro, where, like most other places in Middle Tennessee, the cost is rising.

In 1996, when he started building homes in the neighborhood between Franklin Road and New Salem Highway, he was offering prices at $80,000. Today, the starting price is $225,000. Of course, the home is bigger than it was 20 years ago, but the price of lots has gone up, as well.

If the lot costs $80,000, the home needs to cost at least five times more, about $400,000, for the builder to have a shot at profitability, Floyd points out.

In Brentwood, where a minimum lot expense is $150,000 to $175,000, the house is going to cost in the neighborhood of $750,000 to $800,000.

‘Glass ceiling’

Davidson County’s biggest sale of the second quarter of 2017 was $3.3 million for a home at 410 Saint Edmunds near Brentwood, Chandler Reports shows.

Williamson County’s top sale was $2.468 million at 855 Windstone, while Rutherford County’s most expensive that period was for $955,000 at 3944 Leanna Road.

In Sumner County, U.S. Rep. Diane Black and her husband, David, sold their Gallatin home for $1.3 million in an area that benefits from the Cumberland River and Old Hickory Lake. Three other homes sold for more – $1.325 million to $1.925 million – in Sumner during that period.

Larry Sims, the principal of Sims Realtors & Auctioneers, doesn’t see much of a market for million-dollar homes in Murfreesboro or Smyrna, where he put thousands into selling a home with more than $1 million in it but no takers.

His office marketed the Smyrna home to Nissan hoping someone would bite because of the corporate headquarters in Franklin.

He wonders if an unwritten rule exists prohibiting Nissan corporate types from buying in Rutherford County.

“The biggest thing is that the income is not here” for higher-priced homes, he adds. “The ambition is not even here. Without the ambition, it’s hard to get things done.”

Sims is also seeing houses worth $1.2 million sell for $900,000 in Murfreesboro, including in the exclusive Mirabella neighborhood on Pitts Lane.

“So, Murfreesboro has a glass ceiling, as well. There’s some exception to that if you get out in the county and you get some acreage with it. But that’s still going to be fairly rare,” Sims explains.

Without a corporate park such as Maryland Farms or high-end jobs such as Nashville offers, thousands of Rutherford County residents drive to work in Davidson County, where many earn high salaries. Yet, that isn’t translating into widespread high-end homes, he adds.

Sims concedes the status to live in Williamson County far exceeds that in Rutherford, but he notes that perception can come with a heavy burden.

He compares the situation to having a degree from Vanderbilt and degree from MTSU.

While a Vandy degree might be more valuable, Sims notes, the graduate from the prestigious Nashville school might owe $300,000 to $400,000 while an MTSU probably has an overall debt load of less than $50,000.

The location factor

Former Murfreesboro Mayor Tommy Bragg, whose home sold for $875,000 in the second quarter, says he believes Brentwood and Franklin benefit from their proximity to Nashville along with an attractive landscape of rolling hills, as well as the early development of Cool Springs and the Galleria Mall.

Murfreesboro is 35 miles from downtown Nashville, while Brentwood is just across the Davidson County line and Franklin is about 15 miles south of the capital city.

Consequently, Williamson County became a natural extension of Green Hills, Burton Hills and Belle Meade, enabling its housing to “mimic” those affluent areas of Davidson County, Bragg explains. Cool Springs continued the parade.

Rutherford County was late to the retail game, but under former Mayor Richard Reeves it started moving on a Commerce Center proposal in the late 1990s to develop land purchased by the city for more than $200 million to attract big retailers and high-end jobs.

Reeves pulled the plug on the project amid opposition from those who thought the plan was too risky for city dollars.

When Bragg took office, he repackaged the proposal, and ultimately voters approved a referendum to invest in the construction of Medical Center Parkway and other infrastructure with backing from the former Middle Tennessee Medical Center to build what is now Saint Thomas Rutherford Hospital.

It would become the first big anchor of the area near I-24 now known as The Gateway.

City leaders also worked out an agreement with hotel developer John Q. Hammons for construction of the Embassy Suites Hotel & Conference Center near The Avenue retail area, which paved the way for construction of several new hotels along I-24.

The long-term plans by Reeves and the late Mayor Joe B. Jackson made development in the Gateway area “a reality,” Bragg says.

Yet, city leaders and economic recruiters are still trying to land the city’s first major corporate headquarters in decades since State Farm opened a regional office.

Why isn’t anyone climbing on board? Bragg maintains it has to do with the “return on investment.”

“The property values in Williamson County seem to rise at a greater rate than they do in Rutherford County, and I feel like when a person looks at a fixed asset, they want the value to increase, and over the last 20 years those property values have gone up higher in Williamson County than they have in Rutherford County,” Bragg says.

“So, as Williamson County fills up and becomes like Green Hills and Burton Hills, saturated, I think you’ll find that Rutherford County will be more enticing to investments in the years to come.”

Stephen Aleman with Sims Realtors and Auctioneers also says he believes location holds the answer to higher home prices in Nashville and Williamson County.

“I think the biggest reason is proximity to, for lack of a better phrase, where the action is,” says Aleman, a Donelson resident.

When someone comes to Nashville, whether it’s a young person looking to make it in the music industry or someone hoping to find their niche in the technology or health-care sectors, they want to be near the hub, he adds.

A Yale graduate and former Queens resident who worked in New York City, Aleman says when he and his wife want to hit downtown Nashville with its restaurants, entertainment, sports venues and other attractions when they go out on “date night.”

He makes note of the thriving business activity in Nashville, as well, with nearly 20 cranes currently hoisting materials for high-rise developments.

Of course, the Nashville night life and jobs come with trade-offs: parking and traffic, both of which cause headaches for people looking for fun or heading for the workplace.

For instance, the drive for Aleman’s wife to her job at Maryland Farms in Brentwood is taking longer every year, he points out.

“But when you look at the hot spots, you can look at where the jobs are, where the schools are, where the entertainment is. And if you get too far removed from that, then it becomes a challenge for anyone to fight through on any given day,” Aleman says.

More house for the money

Murfreesboro is one of the fastest-growing cities in the nation, with more than 130,000 residents. It touts Middle Tennessee State University and some 22,000 students, historical sites such as Stones River National Battlefield, the Rutherford County Courthouse and some of the best public recreation facilities in the state.

Why can’t it post more million-dollar sales?

Much of it has to do with the price of starter homes, construction of apartment complexes and low-income housing, Sims says. But when price ranges are considered, he doesn’t think the comparison of prices between Rutherford and Williamson is that big a deal.

In fact, he says, “It’s a lot of puff.”

The same house a person buys in Murfreesboro for $300,000 would cost $450,000 to $500,000 in Franklin or Brentwood, Sims adds.

Greg Myers, a broker with Keller Williams Realty, backs that up.

He sees many of the people who are moving to Nashville and in their initial search on the south side of Davidson County. They soon find they can get more for their investment by crossing over into Rutherford County.

Once they do more research, they find out the public-school test scores are running neck and neck with other counties.

In addition, the recreational areas, parks and shopping opportunities are top-notch, with The Avenue offering multiple retailers near I-24 and more on the rise.

“A lot of people used to say, ‘Gosh, I have to go to Nashville for this.’ It’s all right here in Murfreesboro (now), right here in Rutherford County,” he says.

In addition to a burgeoning health care community, the area offers a variety of places to worship, from large churches to small, rural churches and different denominations, he adds.

That overall quality of life is making Rutherford County more attractive for those who like being just close enough to Nashville to enjoy arts and entertainment.

“They get more house for the money. They feel like they’re still in a community,” Myers says. “Nashville’s grown to the point where it is huge, but they still feel like they belong to a community, more of a sense of hometown feel.”

Sam Stockard can be reached at [email protected].