It had to happen eventually. January sales were down 3% compared to January 2021, although that is no reflection on the strength of the market. The drop is more indicative of the lack of inventory that has plagued the market for over a year.
The increase in prices speaks more to market conditions than transactions, with the median price for a single-family home jumping from $308,685 in January 2021 to $425,000 in January 2022. Condo prices exploded during that same period from $247,750 to $344,920.
Once again, Nashville proves an economic anomaly as sales drop and prices rise.
The area can look for more of the same as there were 2,898 pending sales at the end of January compared to the 3,609 pending sales at the end of January 2021.
Inventory has dropped to 3,510 properties on the market, down from 5,381 at this time last year and 9,410 in 2020. It is impossible to sell houses that aren’t for sale.
Sale of the Week
Those who thought the rise in interest rates would cool the Nashville residential real estate market need look no further than the sale at 411 Prestwick Court, located within the gates of Whitworth, wedged between Bowling and Elmington avenues behind West End Middle School.
411 Prestwick Court
Brett Sheriff and Theo Antoniadis listed the house for $999,000, or $386 per square foot, a measure that has fallen into obsolescence.
Before this sale, there were five closings in Whitworth in the past six months, with three of those selling in the $260-per-square-foot range, one slightly more than $400 per square foot and an outlier that sold for $459 per square foot.
In the past, when price per square foot mattered, a buyer would throw the $459 per square foot sale out with the bathwater and use the $260 per square foot sales as the true value of Whitworth houses. Those days are long gone.
The Pilkerton team of Sheriff and Antoniadis sold the Prestwick house for a staggering $1,389,595, which equates to $537 per square foot.
Joining price per square foot in the bathwater are contingencies that once were the norm for real estate contracts, including appraisal, loan, inspections with repairs or – heaven forbid – the sale of the buyers’ current residence. Those stipulations have gone the way of the flip phone.
Realizing there were multiple offers – and that to be competitive the offers must be sans contingencies – 27 potential homeowners submitted offers to Sheriff and Antoniadis, a reflection of the market today. There remain 26 buyers looking for a $1 million home in that area with three bedrooms, three bathrooms and 2,590 square feet on lot – if the measuring tape is stretched tightly – hits 0.15 acres.
Granted, this was an exceptional property, as Sheriff and Antoniadis noted in the description. They described it as an “immaculate, rock-solid house with an elegant and flexible sun-filled floor plan with an open kitchen, high ceilings and solid wood floors.”
They also noted there is a “dreamy outdoor central courtyard with a pergola situated on a former arboretum.”
Going forward, Nashville homebuilders will be looking for arboretums to demolish and replace with courtyards featuring pergolas.
Forever more known as the high Sheriff of Whitworth and Theo the Greek, this team will continue to set new benchmarks for the highest price per square foot wherever they roam. At the time of this listing, the two were mainstays at Pilkerton, which has now merged with Parks, and will continue their success there.
While on the subject of successful mainstays, Grace O’Neal Clayton won the prize for her buyer, leaving 26 other Realtors in her dust, which has become a habit for her. Clayton hails from Engel and Voelkers Nashville, one of the firms that has not merged with Parks.
As a wise Realtor said recently, “I can’t get you a deal, but I can get you the house.” Imagine how the person who offered $300,000 more than list on a $1 million listing must have felt, and there was at least one.
This sale is an indicator of the state of the market. A buyer looking at a $1 million property must be able to spend $1.3 million. Not only that, the buyer must care not what the value of the house is today, must have the financial wherewithal to buy with no loan safety net and will not be able to seek repairs.
So as not to confuse, many of these “cash” offers get loans and appraisals, as the lack of the contingencies does not forbid loans. The purchase is simply not contingent on the loan.
And in Nashville, where the thermometer has jumped from 33 degrees to 75 degrees in 24 hours, the axiom about the weather applies: If you don’t like the weather in Nashville, hang around.
Now the same goes for real estate. If you think you paid too much for a house, stick around. A slight uptick in interest rates matter not. There are 30,000 people coming, and most of them seem to have trunks filled with cash.
Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty, LLC and can be reached at [email protected].