VOL. 41 | NO. 10 | Friday, March 10, 2017
New construction clearly holds upper hand in upper-end sales
In the world of residential real estate, most closings occur at the end of the month. The main reason for this is that the interest on the loan for the month of the closing is prepaid at the closing.
For example, if the monthly interest on the loan for the property is $1,200, or roughly $40 per day, and the loan closed on the fifth day of a 30-day month, the buyer would pay interest for 26 days or $1,040. If that buyer closed on the last day of the month, the prepaid interest would be for one day or $40.
Of course, the buyer who closed on the fifth day of the month would have possession of the house for 26 extra days. In short, a person pays interest for every day the person owns the house.
Since most real estate brokers cut their collective teeth on first-time homebuyers, they developed a habit for closing at the end of the month as the prepaid interest for many first-time homebuyers could make or break the sale.
Consequently, title companies that close loans are lonely places during the first 26 days of the month, and buyers and sellers must be wedged in with shoe horns or crowbars during the waning days of each month.
So with the impecunious buyers in tow, real estate brokers started a trend of end-of-month closings that has become a tradition.
As noted in this column two weeks ago, a recent trend has upper-end buyers – sales of $1 million or more – choosing new construction over existing. Last week – the end of the month – saw four upper-end homes sold, all new construction.
The first sale was at 2702 Brightwood Avenue and listed by Richard Bryan of Fridrich and Clark Realty. Bryan sells some 140 houses each year with numerous sales $1 million or more. This sale was for $1,373,000, even though the list price was only $1,370,000.
With 4,816 square feet, Waterfall Quartz kitchen counters, Kitchen Aid appliances, the house also has shiplap walls and exposed brick.
Four years ago, no one had ever heard of shiplapped walls in new construction in the Nashville market, so the older houses with unshiplapped walls never stood a chance.
Each of the bedrooms in the Brightwood home has a private bath, a trend that means the formally popular – and once innovative – “Jack and Jill baths” have fallen down and broken their crowns and no longer reign supreme.
With 10-foot ceilings and 8-foot doors, this new domicile has two laundry rooms, one for upstairs and one for downstairs. Hardly any homes built 10 years ago have two laundry rooms.
Additionally, it has a two-car garage that can easily accommodate an oversized SUV. In many older homes, the buyers wince at the clearance between the opened garage door and the floor, exclaiming that their cars would never, ever be able to fit into the garage.
In a recent transaction, the sale was contingent upon the buyer being able to pull into the garage and then back the vehicle from the confines. It worked.
June Lunn of Keller Williams delivered the buyer, who now has the perfect home. That is until next year when shiplap and Waterfall quartz have taken a backseat to Motown Smokey Stax wall coverings and Apple Corps appliances.
And, as all driving the streets of Nashville have noticed, these giant – by previous years’ standards – houses loom in the landscape like white elephants grazing in the wilderness in stark contrast to the white giraffes, aka tall skinnies loping along the smaller lots. Giraffes are dense. Barney Fife thinks they are selfish.
Mary Beth Thomas and John Brittle, infill specialists both, have a gigantic inventory of the white elephants along with various other wildlife spotted along the cityscape. Last week, John and Mary Beth offered another of the McKenzie Construction/P. Shea Design homes.
This one has Thermador appliances and professionally designed lighting and tile. Interestingly, this home is built upon the grounds of 3215 Acklen Avenue, once again nearer to town. And once again, an enormous white house.
Christy Reed, one of Nashville’s top upper-end producers, represented the buyer, who paid $1,250,000 for the five-bedroom, 4.5-bath, 4,369-square-foot home. As is usually the case in Nashville new construction, the buyer paid list price.
The third house on the list was listed by Lisa Peebles and sold before she could have it photographed. Located on 32nd Avenue, again an urbanesque, Midtown lot, this 4,235-square-foot home has four bedrooms and three and one-half baths.
Matthew Hutfles of Summit Property Management represented the buyer, who paid $1,320,000 for the $1,350,000 house.
The last upper-end sale last week was for $1,020,000 and listed for $1,197,777 by the master, Dennis King of the Wilson Group, and sold by Allen Perry, a perennial upper-end seller.
King must have caught some heat for the area to the left of the garage as he explained in his remarks that “it was required by codes, which need to be engineered specifically to address pulling in and out of garage.”
Once again, car size dictates the sale.
To recap, no Belle Meade sales, none in Green Hills, Forest Hills, Oak Hill or even out west. Is traffic driving real estate values inward?
Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at Richard@richardcourtney.com.