Beginning two years ago, there were rumblings in Washington that the country might mandate rating residential real estate properties based on the energy efficiency of the homes. This discussion filtered down to TVA, prompting TVA to begin discussions with various groups as to the feasibility of the program.

The plan caused an uproar among Realtors from coast to coast as it was in the middle of the recession and the populace was experiencing enough difficulty keeping their respective houses out of foreclosure and dealing with plummeting values without worrying over whether a third party – the government – was going to determine home values based on energy efficiency. The Realtor lobby in DC warned of further fire and brimstone if such an act was passed. It was not.

However, there must be action taken by consumers to conserve electricity, as the peak load requirements are reaching alarming levels. Currently, during the peak hours, NES and TVA cannot always adequately meet the demand of customers. When production reaches capacity, TVA must purchase power from another source.

One way other cities have combated this is through the use of “smart meters” through the installation of the smart grid network. NES has recently received a $25 million grant to begin the installation of these meters. It also is participating in voltage conservation to improve energy efficiency throughout its system. Voltage conservation is a process of lowering voltage at substations during peak times to help eliminate the need for new power generation and to reduce system losses.

The process should be unnoticeable for customers, but they may experience some of the following:

• Incandescent lights burning a bit dimmer.
• Water taking longer to heat.
• Hairdryers and irons producing less heat
• Food taking longer to heat.

All of this would occur only during peak times.

607 Fatherland sold last week for $330,000. It was listed for $355,000.

This is a small price to pay considering the alternative of spending thousands of dollars on the house in order to have it grade well in the evaluation process. By the way, electric cars reduce the demand for oil and gas, but they increase the demand for electricity. A charging station for an electric vehicle, for example, requires the same electricity as half of a house. A transformer in a newer neighborhood handles two to three houses. So every four to six cars would require an additional transformer.

The sale(s) of the week

This week we travel into East Nashville to review a few transactions.

First stop, 607 Fatherland, a home that sold last week for $330,000 after having been listed for $355,000 and enjoying 87 days on the market. The seller had purchased the house in 1994 for $69,000. Selling for $25,000 under sales price when the acquisition cost was only $69,000 allowed room for negotiation. The home has 3,432 square feet.

The next homeowner did not fare as well. The house at 1506 Saunders sold for $235,000 after having been listed for $250,615. The owner of this 2,696-square-foot home had purchased at the peak of the Nashville market in October of 2006 for $260,000.

A condominium at 1111 Fatherland sold for $262,000 last week after its owner had paid $272,000 in October 2006. So, the East Nashville market is off about 10 percent from the market’s apex. Considering that overall prices were off as much as 30 percent at one point, this recovery is reassuring.

This market often shows 5 to 8 percent growth, indicating that the East side could be “back” in the next year to 18 months.

Based on the sale of 2413 Barclay, it could be argued that the area has fully recovered. This house sold for $100,000 in October of 2006, around the same time as the two that are off 10 percent. Yet in February of 2007, it sold for $167,000. It would appear that the owner performed extensive restoration and renovation. The mojo worked, as it sold last week for $209,000.

The home was described by the listing agent as a “honey of a mid-century modern.” That style has become popular and tends to command a higher price per square foot than many traditional house in other parts of the country, Austin in particular. It seems as if that trend has settled in Nashville.

Richard Courtney is a real estate broker with Pilkerton Realtors and the co-author of Come Together: The Business Wisdom of the Beatles. He can be reached at [email protected]. He is the chairman of the Electric Power Board (NES).