Thoughts on Realty

Don your nerd glasses with me for a moment.  Here’s an easy chart that shows Middle Tennessee’s quantity of property closings over time (the green line).  Also plotted is a line that shows how many properties went under contract during the same period (the yellow line).

Spring and summer are typically frenzy seasons for real estate (easily seen by the recurring peaks and valleys in the is graph), a trend we call seasonality.  And since most real estate transactions take around 30 days from contract close, it makes sense that the peaks and valleys of properties closed runs shortly after the trend of properties under contract (the two lines are slightly offset left to right).

But observe the most interesting detail in this chart: the quantity of closings is typically less than the quantity of contracts.  When a buyer and seller agree on a contract, the transaction ends up closing the vast majority of the time, but it’s never a guarantee.  When a contract fails, something didn’t align.  Perhaps the home inspection went poorly, the parties couldn’t agree on repairs, or maybe the house didn’t appraise at the right value.  Developing the right listing strategy (or buyer’s approach) is key to avoiding these pitfalls and proceeding to a successful closing.  List your home near fair market value.  Decide early on to take care of deferred maintenance.  Clean, declutter, and paint.  These are all basics for attracting the right buyers who want to close successfully and on time.

Of course, you’ll need to find an experienced real estate advisor who has a detailed process so you can focus on your move rather than stress over the details.  If you can’t tell by my long winded emails and nerdy talk, detail-oriented is my hyphenated middle name!  😉  For buyers, I meet every inspector on site to assess the inspection report.  For buyers and sellers, I meet every appraiser on site with a list of suggested comparable properties to support our contract price.  I check in every week with the lender and title companies to make sure the right people are ready to close your transaction on time.  It’s not hard to submit an offer or list a property; where an agent provides the most value lies in managing those critical days from contract to closing.

 

We all know the feeling of shock and confusion when a neighbor lists their house WAY high.  “They want how much!?”  Middle Tennesseans know the market has been on a steady increase for the past few years, and some sellers can become overzealous in their asking price.  It’s typically these types of listings that spend years on the market with no offers, condemned to the listing graveyard that we call “expired & withdrawn.” 

Knowing those types of sellers are out there, it’s little surprise to see this visual graph that shows the average initial asking price of a home is somewhat higher than the average final closing price.  Sellers routinely test the market to see what profit they can rake in, however crazy their price may seem.  It’s these types of sellers that work without a deadline or timetable for moving, and they have the leisure of waiting and waiting for the right buyer to come along.  Inevitably, offers that do come in are significantly lower, which leads to major seller disappointment, and the house doesn’t go under contract (even if it did magically see a contract, the reality check of an appraisal would likely upset both parties in the process).  The listing grows stale as home shoppers see it online over and over again without any activity.  It’s the real estate equivalent of watching a delicious buttery biscuit become hard and moldy.  When the time comes for the seller to really want to move, the house is put back on the market.  But even if the price is now fair, the house has lost its unique luster because of the curious listing history that forever follows that home.  Buyers wonder, “Why didn’t it sell?”  And, “What’s wrong with it?”  Steeper discounts sometimes follow to entice an offer, at which point the asking price falls below fair market value, eating into the seller’s profit.  All that time spent trying to sell the house in greed is wasted, and now money is lost, too.  It is not a good situation for any seller to be in.

Although in today’s market, the most wise home sellers will use a qualified real estate adviser to determine their home’s fair market value, and then ask the agent to carefully list their home at just over that fair market value, leaving a little wiggle room for the rising market and buyer negotiations.  Smart sellers know that you get only one chance to impress prospective buyers when you list your home, and the best strategy to move on time is to allow your home’s list price to follow the natural upward market trend.  It’s not a market spike, but a slow and steady increase that can lead to a healthy profit and successful closing!  The fairly priced house passes its appraisal with flying colors.  The smart seller is satisfied with their home’s natural appreciation over time, earning them extra cash to roll into their next home.  And the wise home buyer has no qualms knowing they’re next home was purchased at the right price.

Chart created using data provided by RealTracs Solutions on April 10, 2018.  Middle Tennessee data includes the following counties: Davidson, Cheatham, Dickson, Maury, Robertson, Rutherford, Sumner, Williamson and Wilson.

————————————

Kevin Martelli

Affiliate Broker, Realtor

Pareto Realty

4012 Hillsboro Pike No. 5

Nashville, TN 37215

o. (615) 502-2080

Providing real estate consulting services for friends and family in the Nashville area.

 

In the time since 2010, we’ve watched our Middle Tennessee real estate market change dramatically, and the statistics keep pouring in.  Buyers continue to pounce on listings as soon as they hit the market, not wanting to miss out on their next dream home.  In the real estate world, we measure this timing in a statistic called “Days on Market,” (although a more entertaining term would be “Time to Pounce”).  The statistic measures the average time it takes for a new listing to go under contract with a buyer.  In 2017 the measure hit a historical low of just 26 days on average.  Compare that with an 83 day average in 2010, and it’s easy to see just how much faster today’s market moves.  And with inventory in Nashville and surrounding areas continuing to be historically limited, the buyer feeding frenzy is likely to continue for our foreseeable future.

The frenzy is as much a challenge for buyers as it is for sellers.  Not only do hopeful home buyers have to pounce quickly, they must do so in harmony with the seller.  A home seller always has a timeframe for their move; buyers must match it.  On the other side, sellers want to know the offer their accepting won’t be revised by a short appraisal. Buyers can structure their offer to calm this fear.  Sellers are eager to collect as many offers as possible, but they must organize and compare them side-by-side to isolate the best ones.  To compete in the homeownership quest, buyers must limit their offer’s sticking points that can affect the seller’s bottom line (not to mention the contract’s stability toward closing).

A fast moving market is typically advantageous in real estate, but it’s not without its challenges.  To navigate the raging waters, arm yourself with an agent that you know, like, and trust.  Kevin Martelli’s experience in organizing multiple offer situations and authoring competitive bids means his clients stand a good chance in securing their next dream home and identifying just the right buyer for their current home.

Chart created using data provided by RealTracs Solutions on April 10, 2018.  Middle Tennessee data includes the following counties: Davidson, Cheatham, Dickson, Maury, Robertson, Rutherford, Sumner, Williamson and Wilson.

Kevin Martelli
Affiliate Broker, Realtor
Pareto Realty, LLC
Providing real estate consulting services for friends and family in the Nashville area.

How to Categorize Multiple Offers on Your Home

As we close 2017, most neighborhoods in Nashville are still facing a serious shortage of houses for sale.  Even with the construction boom, new Nashvillians are moving to the area faster than we can build places for them to live.  Many of the homes available in East Nashville are new construction houses, and it is becoming increasingly rare to find that classic looking gem of a bungalow.

As such, when a beautiful home hits the market at the right price, it can trigger a flood of offers, each with an overwhelming amount of information.  The typical home offer can contain upwards of 25 pages of legally-worded documentation, and each offer is structured differently.

As if deciding on one offer wasn’t enough to completely overwhelm the seller, imagine the type of neck vein throbbing stress caused by seven offers!  To avoid a home owner meltdown and decipher the important details, all it takes a proven offer management method.

Here’s where those long lost spreadsheet skills come back into play.  We’ll construct a table to easily compare each offer, examine your bottom line for each scenario, and forecast the timeline for each potential buyer.  We’ll also compare the contingencies we would face with each contract, whether the buyer has another home to sell prior to closing, and consider an overview of every buyer’s financial situation.

Smart sellers consider more than just the offer price, and the highest offer may not be the best.  Having a proven method to control the madness will ensure you end up with less stress, and that you’ll be able to work with the right buyer who is the best match for your particular scenario.

————————————

Kevin Martelli

Affiliate Broker, Realtor

Pareto Realty

4012 Hillsboro Pike No. 5

Nashville, TN 37215

o. (615) 502-2080

c. (615) 358-8468

[email protected]

Myriad (n); an innumerable abundance 

Nashville is home to a myriad of options to finance a home purchase.  Driving around town, it seems like there are more mortgage offices on every street corner!  Yet with the latest regulations subjecting every loan scenario to high levels of underwriting scrutiny, it is more important than ever to identify a competent lender.

Thankfully I have had the honor to work alongside some fine lenders here in Nashville, loan officers and mortgage consultants who are upstanding in managing private financial matters, detailed in submitting complete loan packages for underwriting, and personable to create strong friendships with many home buyers.  These are the lenders I recommend time and time again to friends and family who need help funding their next big dream.

At Pareto Realty, we champion the concept of “the vital few.”  It is the idea that a small concentration of brilliant people generate the majority of the best results.   The lenders I recommend are those who I have found to be just that—the vital few who are focused and achieve wonderful success in walking with home buyers from contracts to keys.

When any of these vital few lenders are poised for a successful closing, selecting the right lender becomes less about shopping interest rates and loan packages.  Instead, I encourage my clients to select the lender who they think has established the best personal connection.  So much success in the real estate industry rides on customer satisfaction, and I find customers to be the most satisfied by professionals who match their personality.  To pick the right local Nashville lender, call my preferred partners.  Ask each of them their thoughts and opinions on various loan products and see how they respond.  Chances are they’ll ask you lots of questions in the process, and a friendship will be established before you know it.

Kevin Martelli

Affiliate Broker, Realtor

Pareto Realty, LLC

Providing real estate consulting services for friends and family in the Nashville area.

 

As a part of today’s real estate industry in Nashville, I run into a LOT of new construction.  In fact, in the first quarter of 2017, Metrostudy recorded the highest number of new homes breaking ground in over eight years.  Demand for new construction remains strong.  As a result, many new builders have entered the market hoping to grab a piece of the pie.

How experienced are these new builders?  What’s their final product like?  As an obsessive list-maker, I maintain a running “Builder naughty and nice list” to help new construction buyers navigate these uncharted waters.  The reality is, many types of people can build a house.  But there are a vital few who can offer up excellent customer service during and after the construction process.

Those builders who have happy customers will be referred to new buyers.  And so moving forward, I predict the builders with the better customer service will survive past this construction boom.

If you’re looking for new construction around Nashville, it is here in abundance!  If you’re looking for a quality build from a reputable builder, I’d be happy to share my list with ya.  🙂  Send me a note – [email protected]

SaveSave

Witness this stunning 17th floor view of the Gulch and Tennessee’s rolling hills. Featuring impeccable interior design, this condo’s upgrades include new lighting fixtures, custom storage solutions by California Closets, a full auxiliary storage unit on site, $9k in motorized window shades with motorized blackout shades installed in the master bedroom.  Additional upgrades include custom-installed media wall outlets for TVs, which make them look completely wireless; a Siri-controlled WiFi-thermostat; and ceiling fans.  Two gated garage parking spaces are included.  When you visit, be sure to spend time on 5th floor to see all the amenities this community has to offer: a fantastic pool deck, modern zen garden, enormous fitness center with personal trainers, expansive dog run, and more.

NASHVILLE, Tenn. (Oct. 6, 2016) – There were 3,474 home closings reported for the month of September, according to figures provided by the Greater Nashville Association of REALTORS®. That number is up 0.8 percent from the 3,444 closings reported for the same period last year.

“The monthly, quarterly and year-to-date numbers are actually very similar, despite only two of the three showing an increase,” said GNAR President Denise Creswell. “Year-over-year sales for the month and the quarter are essentially flat, which is to be expected this time of year. Our region’s ability to remain stable given the inventory shortage is a strong indication of the healthy market we have.”

“Through the third quarter each county in our reporting area has experienced an increase in median sales price. Eight of the nine counties increased in sales, also,” said Creswell. “Pending sales are solid going into the last quarter of the season indicating we should finish the year well. It’s apparent investing in homeownership is still a priority for the residents of Middle Tennessee.”

“Despite a small decline in sales, buyers and sellers remain in the marketplace,” said Creswell. “Sellers should remember they are responsible for putting the best property on the market, even in light of fewer homes for sale. They can’t take for granted that a potential buyer will act on any property simply to make a purchase, despite the property’s condition.

“For buyers, Realtors can’t stress enough how important it is to be pre-approved and ready to act. That has been true all year, and as inventory conditions tighten this fall, it’s critical. Those properties that are well-maintained and property marketed and priced will enter and exit the market rapidly.”

 

NASHVILLE, Tenn. (Sept. 7, 2016) – There were 3,741 closings reported for the month of August, according to figures provided by the Greater Nashville Association of REALTORS®. This figure represents a .8 percent decrease compared to the 3,770 closings reported for the same period last year.
Year-to-date closings for the Greater Nashville area have increased 4.4 percent. There were 25,898 closings, compared with 24,808 closings reported through August of last year.
“Home sales for our market were essentially flat for August,” said GNAR President Denise Creswell. “Technically, we were down from last August, but by less than one percent. Considering the time of year and the continued struggle with inventory, a slight decrease in sales is not unexpected.
A comparison of sales by category for August is:

	August 2015	August 2016
CLOSINGS	3,770	3,741
Residential	3,173	3,117
Condominium	410	437
Multi-Family	34	23
Farms/Land/Lots	153	164

There were 3,717 sales pending at the end of August, compared with 3,647 pending sales at this time last year. The average number of days on the market for a single-family home was 51 days.
The median residential price for a single-family home during August was $253,000, and for a condominium it was $189,900. This compares with last year’s median residential and condominium prices of $235,000 and $169,000, respectively.
Inventory at the end of August was 12,288, down from 13,511 in August 2015. The current inventory of properties by category, compared to last year, is:

	August 2015	August 2016
INVENTORY	13,511	12,288
Residential	8,904	8,412
Condominium	988	823
Multi-Family	124	98
Farms/Land/Lots	3,495	2,955

“We have entered the time of year that is typical for the housing market to begin experiencing a slowdown. Once schools are back in session and the holidays begin to approach, the market always slows,“ said Creswell. “Despite that, our market still has a strong number of sales pending. While not all of those sales will make it to the closing table, it’s a good indicator that we have active buyers and sellers going into the fall.”

NASHVILLE, Tenn. (Aug. 8, 2016) – There were 3,705 home closings reported for the month of July, according to figures provided by the Greater Nashville Association of REALTORS®. This represents a 3.3 percent decrease from the 3,832 closings reported for the same period last year.

Year-to-date closings for the Greater Nashville area are 22,157. That is an increase of 5.3 percent from the 21,038 closings reported through July 2015.

“The slight decline in home sales is not a cause for concern, and is actually a positive for the market,” said GNAR President Denise Creswell. “The furious pace homes have been selling at is not sustainable. The imbalance of supply and demand, combined with the continued gains in price, means inevitably we will reach a point where the market will slow down. This pause may be a sign the market is beginning to slow down and correcting itself until more inventory is available.

“July marks the first time in seven months that Middle Tennessee home sales have been down year-over-year,” said Creswell. “That aside, our pending home sales numbers remain high, proving homeownership is still important and there are plenty of prospective buyers in the marketplace.”

A comparison of sales by category for July is:

	July 2015	July 2016
CLOSINGS	3,832	3,705
Residential	3,224	3,146
Condominium	435	388
Multi-Family	23	20
Farms/Land/Lots	150	151

There were 3,724 sales pending at the end of July, compared with 3,708 pending sales at this time last year. The average number of days on the market for a single-family home was 54 days.

The median residential price for a single-family home during July was $267,000 and for a condominium it was $189,986. This compares with last year’s median residential and condominium prices of $234,900 and $161,500, respectively.

Inventory at the end of July was 12,329, down from 13,728 in July 2015. The current inventory of properties by category, compared to last year, is:

	July 2015	July 2016
INVENTORY	13,728	12,329
Residential	9,094	8,424
Condominium	965	798
Multi-Family	116	95
Farms/Land/Lots	3,553	3,012

“Despite a slight decrease in sales, median home prices continue to rise. We’re in the middle of the perfect storm that continues to drive up our median prices,” said Creswell. “Nashville is an incredible place to live, so the demand is high. But our low inventory levels make meeting the demand a challenge. At the end of July, interest rates were hovering around 3.5 percent, which is lower than the 4 percent rate this time last year. All of these factors combined contribute to increased prices.

“Homeowners appreciate the gain in home prices, as it positively impacts their equity and investment. But for those trying to buy a home, especially those new to the market, these gains are obstacles. The simple fact remains, until we have more inventory available, home prices will continue to rise. Realtors are hopeful the recent legislative change in how condominiums are approved for FHA financing will add more units to the supply and lessen the burden on first-time buyers.”