First-time buyers boost home sales in Nashville area – The Tennessean, Nashville, Tennessee, USA

Price slips 5% from July ’08

 

By Naomi Snyder ? THE TENNESSEAN ? August 11, 2009

 

Residential real estate sales in July in the Nashville area rose over the previous month for the sixth straight time, a trend that Realtors say may be due to first-time homebuyers fueling the market.

 

July sales were still 11 percent below results from July 2008, but the fact that year-over-year sales almost narrowed to a single-digit decline gave some real estate professionals reason for optimism.

 

“It would be great to keep trending to zero and eventually see an increase,” said Mike Nichols, president of the Greater Nashville Association of Realtors.

 

As recently as January of this year, sales had slumped 41 percent compared with a year earlier.

 

Becky Meagher, a Crye-Leike Realtors broker, said first-time homebuyers are helping to boost sales. Meagher said she sold a $110,000 home recently near the Nashville International Airport to a first-time buyer within weeks of the property being listed.

 

Meagher said the seller had retiled the kitchen and bathrooms, painted the interior and redid the hardwood floors. “It was pristine,” she said. “That $8,000 tax credit is working.”

 

More expensive homes may not be faring as well.

 

Meagher said a three-bedroom condo she is selling near the Brentwood city line for $234,900 has been on the market for 90 days.

 

The median home price for a single-family home was $171,000 in July, about 5 percent off from a year ago, and a 10 percent decline from July 2007, the summer when single-family home prices were at their peak.

$8,000 tax credit

 

The median price for a condo also fell last month ? down 13 percent from a year ago to $142,146.

 

The price peak in the condo market occurred in June of last year, when the median price for a condo was $185,500, according to the association’s figures.

 

Sales of condos were down 16 percent compared with last year in July, the Realtors group said.

 

First-time homebuyers qualify for an $8,000 refundable federal tax credit passed by Congress earlier this year to stimulate home sales.

 

Nichols said first-time buyers are taking up some of the slack from the loss of subprime borrowers.

 

Subprime financing dried up in 2007, marking the start of a downward cascade in the housing market.

 

Meagher said the last two years have been challenging for the real estate industry. But she said sellers have gradually become more realistic about pricing, which is helping to create sales.

 

“Sellers are getting it, finally,” she said. “They just can’t get what prices were three years ago.”

 

Contact banking and residential real estate reporter Naomi Snyder at 615-259-8284 or nsnyder@tennessean.com.