Clarksville housing market ?primed for building boom? – Nashville Business Journal, Nashville, TN, USA
City’s home sales increase, values hold steady despite national housing crunch
Friday, August 21, 2009
Nashville Business Journal – by Jenny Burns Staff Writer
Five years ago, home builder John Rochford bought some land near a potential industrial site.
He was planning to build a residential community, but what he didn’t know was that site next door would become the home of a $1 billion plant for Hemlock Semiconductor Group, a solar panel supplier making a lot of waves as it sets up shop in Clarksville.
Rochford’s investment proved to be on the mark. And now others are looking to dive in ? including the big players.
“We are primed for a big boom. Everyone thinks (Hemlock’s) going to be a major impact that we can’t even comprehend yet,” says Clarksville real estate agent Eddie Ferrell, with Crye-Leike Realtors’ Sango office.
Ferrell says he’s recently hosted two national home builders who are looking for property in Clarksville.
The town of 115,000 about 45 miles northwest of Nashville has seen a lot of new construction in recent years by local builders. But none of the national publicly traded builders have moved in. Ferrell, who wouldn’t name the inquiring builders, says change is coming to Clarksville real estate.
Clarksville already has bucked the trend of falling real estate markets, with increases in home sales and no declines in home prices. Its stability comes from the Fort Campbell Army base and will be buoyed by Hemlock, a new hospital and new marina.
“We really have been in a bubble. We really haven’t seen a big slowdown in new construction. New developments are opening,” Ferrell says.
Clarksville-Montgomery County was the ninth fastest-growing city in the nation in 2008, according to the Census Bureau. Such stability had kept Clarksville’s housing market on a slow upward climb. The median price of a home in Clarksville is $149,000.
Some homes are selling this year for 8 percent more than they were purchased for in 2007, says David Greene, principal broker at Crye-Leike in Clarksville.
“The buzz is real,” Greene says. “We are one of the best markets in the country or at least one of the most stable markets. Even though sales slowed in 2008 to about 2,800 homes, prices did not depreciate. As for 2009, we are back on track for the 4,000 range.”
More apartment projects also are showing up on the drawing board, says engineer Cal McKay, principal of DBS & Associates. McKay says he’s talking with several out-of-state developers.
Home and commercial builder Clay Powers says developers expect contractors mostly to rent instead of buy in the short term. Ferrell says contractors are trickling into the area and filling up rental homes, in anticipation of the Hemlock plant slated to begin construction in October.
While agents say it’s hard to predict what will happen to Clarksville real estate, many believe values will rise in the coming years.
Powers says commercial construction of industrial property likely will pick up in six months, and home construction in 12 months as things get moving with the Hemlock plant. He’s working on a 980-lot home development and a 23,000-square-foot retail center in the city.
The average income of the incoming Hemlock workers is expected to be higher than Clarksville’s median household income of $48,630, leading to more demand for executive housing and upscale homes than Clarksville has seen before, Ferrell says. Starting positions at Hemlock are expected to pay $50,000.
Ferrell also has sold homes in the past few years to several retired couples who pointed to the area as a great place to retire. CNN Money ranked Clarksville the fourth least expensive city in the nation in 2006.
Back at Rochford’s Oakland development, he’s planning to open another 100 lots in the 700-home community. The Nashville developer looked to Clarksville because he could build single-family homes for $130,000 to $160,000.
“If you get in it for the long term, you are going to do very well,” Rochford says.
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