The Red Report
July 2012 Home Sales Report:
(Now Includes Land/Commercial/Condo YTD closings- see at end of report)
CLOSINGS 2012
Month Rutherford Williamson Davidson Wilson
January 183 167 396 90
February 222 189 413 107
March 288 242 526 162
April 354 292 627 133
May 358 375 706 158
June 365 384 705 197
July 375 407 687 180
CLOSINGS 2011
Month Rutherford Williamson Davidson Wilson
January 169 140 302 92
February 152 150 329 85
March 259 245 427 133
April 251 209 467 112
May 278 305 518 138
June 263 316 596 134
July 290 337 521 158
August 289 274 572 158
September 261 244 527 131
October 259 232 468 144
November 238 201 425 129
December 231 264 508 143
TOTAL 2,940 2,917 5,660 1,575
I’m starting to sound like a broken record, but “Home Sales Continue to Improve in Middle Tennessee!”
Home Sales up 26% YTD. Commercial Sales up 100% YTD. Land Sales up 53% YTD.(see sales #s below).
All four counties continue to show impressive Year to Date numbers with the closings up 26%, prices are starting to edge up,
and inventories continue to deplete. I don’t want to show too much excitement, but this year has been a tremendous turn
around from the previous 2-3 years so I can’t help but feel excited to see the market turning around. It’s been a long time
and nobody wants to step out and say things are officially better, but based on these numbers and the conversations with
those in/around our industry, you would have to say we are all feeling very optimistic these days.
The only negative feedback I hear still revolves around home appraisals which we’ll get to below.
I’m also thrilled to see the big increases in the Commercial and Land sales volumes. Wow those #s are amazing!
Total Home Closings up 26% for July 2012 verses July 2011.
Total Year to Date Home Closings are up 26%.
Total Inventories are down 17% from July 2011 to July 2012.
Home Closings for July 2012 vs July 2011:
Rutherford closings up 29% with average closed prices up 4%.
Williamson closings up 21% with average closed prices up 7%.
Davidson closings up 32% with average closed prices up 1%.
Wilson closings up 14% with average closed prices down 2%. Wilson was up 47% last month so a milder increase would be expected.
Prices are looking much better overall as some price ranges and areas are doing very well.
Prices would be recovering much quicker if fair appraisals were being done by local experienced appraisers.
We are still seeing too many out of town appraisers appraising quality properties well below their current values.
(I apologize for my continued comments about the appraisals, but until the issues improve we have to let the issues be known.)
Home Closings from June 2012 to July 2012:
Rutherford closings up 3% with average closed prices up 9%.
Williamson closings up 6% with average closed prices down 1%.
Davidson closings down 3% with average closed prices down 4%. Davidson was up 14% in May so a pull back was understandable.
Wilson closings down 9% with average closed prices down 1%. Wilson had several stronger months earlier in the year.
Pendings for July 2012:
Rutherford pended 409 which is up 13% from last month. August should be another great month!
Williamson pended 456 which is up 7%.
Davidson pended 745 which is level.
Wilson pended 214 which is level.
The pendings for Rutherford and Williamson show that these two counties will continue with a strong couple months ahead
while Davidson/Wilson may be leveling off or showing a modest adjustments. We have all been waiting for the seasonal
pull backs in the market this year, but we haven’t really had any yet. This year has shown improvements each month.
Appraisals: (if you don’t care about the appraisal issues, please skip this long opinion)
Appraisals continue to be the #1 hot topic among the real-estate industry these days.
The local and national Realtor and Builder associations are all working on this issue that continues to threaten the
real-esate recovery. The supply and demand as you can see from the numbers above say that we could have much
higher prices, but appraisals are keeping prices from matching the supply/demand of the market.
There are too many multiple offer deals that end up with appraisals 10-20% below the sales price. No matter
what the situation is, the price ends up going down by all or some of the difference which keeps the actual market
value from being realized. We find that the buyers are just as frustrated as the sellers with the low appraisals because
they end up losing their contract on their dream home because they can’t get it financed for the contracted price.
We see two main reasons for bad appraisals; 1. the appraiser is not local and doesn’t know the local market conditions and 2. they
may be local but they don’t have the experience to handle today’s market conditions.
Appraisers should be local and experienced. I hear too many stories of an out of town appraiser, who doesn’t know the
local market conditions or where to find the appropriate comps, being allowed to be on the rotation of certain banks.
Realtors and now the general public are starting to put pressure on the mortgage companies. Sellers are tired of their sales
being canceled due to low appraisals and buyers are tired of not being able to buy the home of their dreams due to low appraisals.
All Mortgage companies are required to use an appraiser rotation system so they aren’t hand picking their favorites. Some do
a great job making sure those on the rotation are qualified and several of them are doing a terrible job by either outsourcing it
to a group who is not local or doesn’t check their experience. Mortgage companies have to manage their rotating appraisers
better so that the local/experienced appraisers are the only ones on the rotation. I’m ok with the new required rotation, but
those on the rotation need to be local and experienced. Complaints need to be taken seriously so that the appraisers will start
giving this market better appraisals and service. The banks that do manage their appraisal situation and handle complaints
seriously will prosper.
Attention Buyers and Sellers: Please make sure the bank/mortgage company that is being used on your deal doesn’t have a
reputation for having issues with canceled/delayed closings because of appraisal issues.
Seller’s must negotiate/add language in their contracts that they must approve of the bank/mortgage company that the buyer
is using. The seller has the option to ask the buyer to use a competent bank/mortgage company that hasn’t had appraisal issues
or the seller has the right to cancel the contract.
Commercial/Land Sales: All Four Counties- (this may be the biggest news of the report)
I need to disclaim that a lot of commercial and land deals are never recorded by Realtors opposed to home sales, which
are almost all recorded. These numbers are just to show the comparison of last year verses this year. The actual dollar
volume for will be many times these recorded numbers.
Commercial YTD sales volume has doubled or gone up 100%- from $15.6million to $31.3million.
Land YTD sales volume has gone up 53%- from $46.6million to $71.5million.
Wow, I knew commercial and land deals were up, but I hadn’t looked at the percentages until now. I personally deal
mostly in land so I can say that I’ve done more deals this summer than I have done is a long time. Land that has sat with no
activity for years have started to see more lookers, offers, and contracts. Other friendly competitors are telling me that
residential lots sales are starting to sell again at decent prices. Most agree the commercial land will be the last to see a
recovery so the increase in commercial and land is a huge indicator of a nice recovery.
Condo Sales: All Four Counties
29% increase 2012 YTD compared to 2011 YTD Closings.
2012- 1504 Closed YTD
2011- 1167 Closed YTD
I’ll try to keep myself contained as we continue to see positive trends. After all our market has been through the last
several years, I’m a little hesitant to be too optimistic, but I sure feeling good today.
It’s great to be in Middle Tennessee! I always love your comments and feedback on the market. I hope everyone
enjoyed the Commercial, Land, and Condo numbers. I keep saying we’ll see our regular seasonal pull backs, but
we haven’t seen them this year. Maybe the expected seasonal dips won’t show up this year as we continue in an
upward pattern. Enjoy the busy seasons ahead and I’ll see you next month…
Thanks,
Steven
