Hardly a day goes by that a residential real estate broker is not asked: “When will it end?”

Elliot Eisenberg, Ph.D., authors Elliot Eisenberg’s Brief Blog and sends it daily to subscribers. Here’s what he had to say on the subject in his August 25 edition:

“From 1/1/14 through 7/31/14 new home sales totaled 266,000, down from 268,000 during the same period in 2013. Similarly, single family starts and single family permits are up just 3.2 percent year-to-date. Single family activity is, in part, so lackluster because the average new house price hit a record high of $339,100 last month! At the height of the housing boom in 3/07 the average was just $329,400.”

These, of course, are national stats, and we have learned that Nashville seems immune to national housing trends, with starts up in double digits. Permits and sales continue to set records for both unit and sales price.

However, the national trend could work its way into the Nashville model. At some point, affordability becomes an issue and, if prices continue to rise, some will be priced out of the market.

With the 8,000 to 10,000 brand spanking new rental units suddenly available that reach 100 percent occupancy within months of completion, the city is seeing a newfound popularity for rental housing.

One of the reasons is that properties in the area are appreciating more rapidly than the other investments of potential buyers, and buyers are unable to out save the galloping market.

For example, a couple began looking for housing in March in the $500,000 range. A cool half-million bucks. And suppose that buyer couple liked the 12South area.

They might see a home or two that was close to what they wanted, but lacking in a few areas. After a 30-60 day search, they realize perfection is not an option, so they decide to settle on one of the houses they had seen in their search.

They make an offer, but it is sold, as were the second and third choices.

Luckily, the builder has acquired another lot, demolished a house and is building the same house a block away. So the couple opts to purchase that one.

One problem: The same house is now $50,000 more, reflecting higher acquisition costs for the lot.

Then it’s back to the drawing board since the buyer cannot afford the extra $50,000, not to mention they were angry over the circumstances. So now the half million is $50,000 less than it was 60 days ago.

This situation repeats itself, and the exponential growth is staggering.

Returning to the original question of “when it will end?,” the commercial brokers ride an average of six to 12 months into the future of the residential pack. They are seeing businesses relocate into the area in droves, as well as unparalleled internal growth. Companies that relocated to Nashville with three or four employees have 20 or 25 now.

The commercial people feel we have at least two years left.

Some buyers have decided to sit it out and hope for another economic downturn. But with $500,000 being devalued at $50,000 every six months, who knows what $500,000 will support in three years?

Sale of the Week

In the old days, say 2006, if a person had made the decision to buy a nice, expensive home in an affluent area, and conceded that the price would be a bit shy of outrageous, that person might begin the search in Belle Meade or Green Hills, realizing it to be the most expensive per square foot in town.

Today, if a person wants to live in a two-bedroom, two-bath condo with more than 1,000 square feet, a place in the Gulch could run as high as $450,000.

Or, that buyer could visit the once-expensive Green Hills neighborhood and buy in Hillsboro Station for $187,500.

The new owner would have 1,016 square feet, with two bedrooms, two baths, a fireplace, a washer, a dryer and a private patio. Jon Sheridon, the laid-backest man in real estate, sold 262 Hillsboro Place last week for $187,500 after listing it for $189,500.

The owner had purchased the unit in July 2013 for $179,500. The sale history runs as follows: 1986, $74,500; 1999: $108,000; 2002: $122,000; 2006: $199,000.

By the time the current owner purchased the unit last year, downtown was alive, and the owner lost some $20,000, selling for $179,000. The unit is appreciating again, but still reasonable.

Veteran Realtor Bettye Morris of RE/Max Fine homes represented the buyer, whose children would be the beneficiary of Eakin Elementary, John T. Moore Middle and Hillsboro High School.

With a maintenance fee of $175 per month, the development is one of the more affordable in the area.

Richard Courtney is affiliated with Christianson, Patterson, Courtney, and Associates and can be reached at [email protected].