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VOL. 40 | NO. 43 | Friday, October 21, 2016

Are first-time buyers ready to enter market?

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Jonathan Smoke, an economist with Realtor.com, spoke to the Greater Nashville Association of Realtors at the group’s annual convention last week and showered the membership with graphs, numbers, statistics and other information about the national market, all the while citing Nashville’s numbers as much better than those of other markets.

There are numerous cities that are stagnant and have not recovered from the Great Recession, and there are few, if any, that have experienced the success of the Nashville market.

He noted the country is in for an “Oh Shift!” moment in 2017 when he predicts first-time homeowners will once again return as the dominant force in real estate.

Millennials, by all appearances, are more transitory than those of Generation X, and if they have not bought by now they might be content to rent.

Certainly the number of cranes and apartment buildings that have spread across the city’s skyline affirms that there are more renters than buyers. If rates ever hit 6 percent again, it will be difficult to convince many of these residents that interest rates of less than 4 percent will not return, barring another recession.

Smoke introduced Generation Z, sometimes known as the iGeneration, as buyers who could come on board to pad the number of the first-time homebuyers. For the most part, members of the Generation Z population were given birth by Generation Xers.

They have seen their parents suffer in the workplace and tend to be more entrepreneurial than their parents and even millennials.

Smoke is counting on those whose ages begin in the low 20s to start a home-buying trend. Others, such as Frank N. Magid, have written “They are the least likely to believe there is such a thing as the American Dream.”

Others have noted that since they experienced the 9/11 attacks and the Great Recession, that they are less likely to make decisions such as home ownership.

Smoke might be making his assumptions based on the mere size of Generation Z, as it is a larger segment than either baby boomers or millennials.

Generation Z is 55 percent Caucasian, 24 percent Hispanic, 14 percent African-American and 4 percent Asian. One thing about this group is it is not wasteful and requires little space. Home condominiums sizes will shrink, driving the price per square foot higher, perhaps to the point that no one worries about the price per square foot of the real estate property.

As far as the presidential election goes, it will be November 8. Normally there would be some commentary about that, but not this year.

Sale of the Week

All Sylvan is divided into two parts: Sylvan Park and Sylvan Heights.

At one time, Sylvan Park was preferred and Sylvan Heights was a place that was often avoided by buyers and somewhat stigmatized. For that reason, the legendary Hal Wilson decided to re-brand Sylvan Heights, as it had no real identity. So, Sylvan Heights it was.

Bill Hostetler and his Hostetler, Neuhoff and Davis group took a chance on the area with the Normandy Place development in 2002. Those houses started in the $125,000 range and quickly doubled in value. They are flourishing to this day.

Soon, interesting, contemporary architecture began to dot the hillside in highest of the Heights, and the box-like construction was evident from I-440 area the I-40 intersection.

Those houses began to command what seemed to be outlandish prices. Soon architects began to have license to create brilliantly exciting designs, and the hills were alive with the sound of nail guns.

The house located at 3302 Nevada was a result of the popularity and blossoming creativity. Sporting 3,380 square feet distributed over three levels with three bedrooms, it has three full bathrooms and two half baths.

The property was listed by Gary Ashton of the Ashton Real Estate Group of RE/MAX Advantage, who noted the home had multi-level downtown views, a fireplace, surround sound and a gourmet kitchen with stainless steel appliances and granite countertops.

His words were not lost on his managing broker, Debra Beagle, who delivered the buyer 25 days after Ashton listed the Nevada estate.

The owners had purchased the house in 2013 for $530,000 and sold it for $815,000 after it had been listed for $849,000 originally and then dropped to $825,000.

Having invested $530,000 and seen it grow to $815,000 in three years was a nice reward for having confidence in what has developed into one of the city’s most desirable locations.

Richard Courtney is a real estate broker with Christianson. Patterson, Courtney, and Associates and can be reached at richard@richardcourtney.com

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