MetroStudy - 2011-12-12 - How many of you enjoyed more turkey and side dishes than you could stomach this past week?  If you were like most of America your eyes were probably bigger than your stomach.  After a few “healthy” portions of your favorites you likely retired to your couch or chair and you flipped on the NFL games or you flipped through the newspaper.  Advertisements touting the plethora of Black Friday deals to be had the following morning – or later that evening.  I followed that same pattern; watching the games and reading the paper.

When I finally dug myself out from under the paper I began to think about the enticement of Black Friday.  What drives all of these people towards the mall or online in such droves?  I mean, aren’t there really only 5 TVs available at Best Buy that fall into the “special advertised” price of $200?  Then I began to think about the Government tax credit given to buyers of new homes in the past year.  Was it the same type of perceived deal that provided a “Black Friday” period for the housing market?  Lots of buyers on Friday, Saturday and Sunday, but where did the buyer go after the deals were gone?

During this retail sales season we are inundated with how well retail sales are going.  CNBC had estimates of 5-7% increases this year over last year…and that was at noon on Friday.  We all know that retailers will still be moving product well after Thanksgiving weekend and the real increases will only hold if consumers continue to spend throughout the season – after the sales incentives are gone.

That same logic holds true for the hosing market.  We saw residential sales increase thru June 2010.  Then most buyers decided to stay out of the “housing mall” every month since.  We saw sales decrease thru June, when comparing 2011 sales to 2010 sales.  July and August we will chalk up to decreased demand after the tax credit, and only now in September and October have we began to see some year-over-year growth.  Are we finally starting to see a true reflection of demand showing in the housing market?  We are in Nashville.

Like the rest of the country, Nashville saw its share of demand during the tax credit period.  What is interesting is that demand, based on annual starts, increased by 5% and 7% in the under $150k and $150-224k price bands respectively during the tax credit period.
 
One year later those same price points lost 6% and 2% respectively.  Was there truly a demand at those price points or were consumers driven to those because of a government tax credit?  You will notice the following year saw the largest demand increase in the $300-$499k price band – 6% and the >$500k price band saw a 3% increase.  No tax credit incentives, just actual consumer demand.  The good news for Nashville is that the demand by price point is returning to a more normal, historic distribution.  The diversity of pricing is one of Nashville’s strengths, as is the location of the top selling subdivisions.  Looking at a map of Nashville you will notice the top 15 subdivision are well distributed throughout the Nashville market.
 
If that weren’t enough to be thankful for this Thanksgiving, let me give you my “Top 10 Reasons to be thankful about the Nashville Housing Market”.

Top 10 Reasons to be thankful about the Nashville Housing Market:

• Diverse price offerings and product types
• Well distributed successful subdivisions across the entire market
• Ranks in the top 20 best improving US job markets
• Didn’t experience drastic appreciation and depreciation in pricing
• Finished Vacant New housing inventory is decreasing
• Single Family Housing months of supply is approaching equilibrium
• Apartment Occupancy is the highest in 10 years
• Downtown Nashville remains a strong tourist destination
• Major job expansion at Nissan, GM, and Amazon
• Construction and manufacturing job sectors improving

For more information on the Nashville Market contact:
Jason Brown
615-349-2190
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