There are statistics floating about that signal a decline of the real estate market in Greater Nashville area, and transactional sales volume would make that a plausible deduction. Sales in the surrounding counties are down some 13% as the historic climb in interest rates has sent many would-be, first-time homebuyers back into rental shelter.

While a once-burgeoning residential real estate market has slowed, the publication Wallet News has conducted a study to determine the best places to purchase a house. It compares 300 cities, suggesting buyers look beyond square footage and style since, from an investors’ standpoint, “they hold less significance than historical market trends and the economic health of residents.”

Using 17 indicators, Wallet Hub considers Nashville the third-best city in the country to buy a house with a rating of 71.71, behind only McKinney, Texas, at 74.41 and Frisco, Texas, at 74.27. Based on size, Nashville topped best place to buy a house list ahead of Austin, Seattle, Raleigh and Tampa, which rounded out the Top Five.

Wallet Hub identified he cities with the most properties that are “underwater,” meaning that mortgages are more than the value of the property as St. Louis, Shreveport, Baton Rouge, Philadelphia, Columbus, Georgia, and Peoria, Illinois.

With ancient evaluating methods such as price per square foot, it becomes more and more likely that foreclosures are imminent. A stroll through Sylvan Park reflects the inaccuracies price per square foot can reflect.

For example, 115 37th avenue sold for $486,000 at $525 per square foot and is being marketed as a possible teardown. The house needs everything, yet the prior owner paid $262,500 in 2013 and apparently had no mortgage, so anywhere near the list price provided profitability. There was not a lender breathing down their throat.

And then there is a sale at 4410 Park Avenue with 1,486 square feet that is loaded with upgrades such as a 2010 HVAC, a 2014 roof, new patios, fresh paint and a new kitchen. It sold for $552 per square foot or $820,000. Most feel that $300,000 would not make Park as nice as the house on 37th.

Veteran developer Lucas Chesnut, the owner of Craftsman Residential, acquires properties and hires builders to construct houses that he has an architect design, has input from three or four interior designers and delivers over 200 pages of plans and specifications to the builders. Chesnut is a perfectionist, and his final products reflect that. Consequently, his houses sell for more per square foot than many in the same locale.

In December, his company sold a house on Vailwood Drive, a street near Julia Green Elementary School, for $555 per square foot. Five months later, the buyer sold the house of $607 per square foot. The exact same house.

Back in Sylvan Park, new construction sold last week for $482 per square foot with new everything, a brand-new house sold for $4 per square foot less than a teardown. For that reason, Wallet Hub’s evaluations are more accurate than traditional price per square foot comparisons.

When mortgage balances fall below property values, trouble is brewing. Foreclosures could be on the way.

Such was the case with a property Steve Jolly of Benchmark Realty recently listed a property that had gone into foreclosure in Green Hills. The mortgage on the property was worth more than it seemed that the property was worth. In most foreclosures the lender has an appraisal done by a third party and list for that price.

A new dilemma facing heirs to properties is that the property has value, but they are not able to pay the lender the balance on the loan.

Jolly filled the listing with the usual foreclosure verbiage that this was a “HUD restricted property” and had to remain on the market seven days before offers from owner occupants could be considered, 20 days before non-owner occupant offers could be considered. The philosophy there is to help those searching for a home to have first dibs over those hoping to profit.

Enter legendary restaurateur owner Randy Rayburn and his buyer’s agent, who felt the property was a good fit and well price. Rayburn is the founder and owner of Sunset Grill, Cabana and Midtown Café. Journalist Kay West once wrote that Randy has “hired, fired or fed” almost everyone in Nashville.

Rayburn says he felt it may have been slightly underpriced, and given Rayburn’s friendship with contractor George Degerberg with Belmont Construction, he decided to take a shot at it.

All Rayburn needed at this point was the money to buy the house. Being the entrepreneurial sort and restaurateur, Rayburn is in an industry totally ravaged by the pandemic.

Luckily Rayburn’s broker had worked with Mary Littleton in the past and knew her to be diligent and familiar with independent contractors.

Ironically, Rayburn worked with her father when he was Democratic State Caucus legislative policy person from 1971-1973.

Littleton noted that “being in an industry that faced significant challenges due to the pandemic can be anxiety inducing and added that the federal regularity framework typically penalizes a buyer who has experienced such a chaotic economic period.”

Littleton a senior mortgage broker with Accurate Mortgage, as well as an attorney, says her underwriters were local and they knew of Rayburn, his restaurants and his accomplishments, meaning she did not have to explain everything to them.

“With the complexities of Mr. Rayburn’s diversified portfolio, underwriters can either kill a deal or apply common sense and get it to the closing table,” she explained. They closed, and Degerberg’s crew is hammering away at this moment.

Yes, foreclosures are back.

Richard Courtney is a licensed real estate broker with Fridrich & Clark Realty, LLC and can be reached at richardcourtney.com.