3432 Woodmont Blvd

Prices are dropping all across the Greater Nashville area as new listings are entering the market. And that makes pricing houses even more difficult, since many of the new listings are using current (falling) prices to set their asking prices.

Closed sales are, of course, the best comps, but in many cases there are no recent closed sales. If the prices for the current listings drop immediately following the new listing, the strategy has backfired.

For example, there are two listings of $500,000 each on the same cul-de-sac and nothing has sold there recently. The owner of a new listing on that same cul-de-sac might want to enter the fray at a lower lowest listing price, say $485,000, in hopes of standing out in the three-way competition.

Then the owners of the first two houses drop their price to $465,000, spoiling the strategy for the new lister.

In and reality, a price drop has the same effect as a new listing. If there are 25 new listings and 35 properties reduce their price, it is the equivalent of 60 new listings. That’s what’s happening in the Greater Nashville area.

Offers should be loved as much as the first grandchild, and sellers should embrace and coddle buyers as they did their first love. There are more listings than buyers, and the buyers are aware that the market has shifted.

Buyers have been beaten and pounded by the interest rates climb, and many are harboring regrets for not buying when the rates were low. They wanted to wait and watch prices fall.

The fact is prices have not fallen much, maybe 5%, but rates have doubled. A $500,000 loan at 4% – and many homeowners secured loans at even lower rates – on a 30-year amortization is $2,387 per month. At 7%, that payment is $3,326, a $939 difference each month, $11,268 annually.

Same loan amount, $11,268 difference.

In the sale of 3432 Woodmont last week, three of the best Realtors in Nashville converged with the buyer and seller both notching victories. The property was listed by Ginger Holmes, long known for her real estate acumen and integrity, and her brother, David Pruett, who was cut from the same mold. Their father is Ray Pruett, a founding member of the Woodmont Group, a storied name in Nashville real estate history.

This house was listed for $2.45 million, and a house at 2315 Woodmont sold earlier this month for more than $7 million. Comps aren’t everything, nor is location. The Holmes/ Pruett team had experienced numerous showings and had a contract on the house that been terminated.

For those new to real estate, terminated contracts are not considered to be a good thing.

Enter Pamela Vasilevskis of the Wilson Group, heralded by owner/broker Christie Wilson as a “rock star who has worked long and hard to build a strong foundation in real estate, both in marketing and knowledge.”

Wilson’s pedigree rivals the Pruett’s, as she is the daughter of the famed and vaunted Hal Wilson. Seeing a great opportunity for her buyers to purchase a home on a $7 million street, Vasilevskis sprang into action and secured a contract for $2 million, some $450,000 less than the list prices.

Her buyers anticipated demolishing the home since a restoration would be too costly due to the fact that it was a multigenerational home with several additions, and from all appearances none were designed by Frank Lloyd Wright or his disciples.

Realizing the house was devoid of wrighteousness, when Vasilevskis came acalling, Holmes knew how to best advise her clients. Her advice was to take it and run.

A rule of thumb for real estate construction is that the finished product should be 25-35% of the acquisition cost. How many buyers looking at $2.5 million homes could spend $6 million?

Holmes was right, and Vasilevskis found a gem. How many $2 million houses are on a 1.81-acre lot for $2 million? The answer to both questions is a resolute “none.”

This deal was a tie, with both buyer and seller winning.

Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty, LLC and can be reached at [email protected].