Home sales break out of slump

Prices hold their ground, too, but trade group quick to point to tax-credit boost

Email | Print By J.R. Lind

Nashville-area home sales surged in October, topping the same month last year by more than 20 percent. It’s the first time since October 2006 sales showed an increase year over year.

The Greater Nashville Association of Realtors reported 2,145 closings in October, a strong reversal from September, when closings fell below 2,000 for the first time since 1997.

Mike Nichols, GNAR's president, said the first-time homebuyers tax credit, which was set to expire at the end of November before being extended last week, created an “urgency” with buyers which may have pumped up the numbers. Now, the credit is set to end in April.

“With the extension, it’s going to carry us through the winter, which is a slower period,” he said.

Tennesseans have been among the most eager to cash in on the $8,000 tax credit. Per capita, the Volunteer State ranks fifth in claims. According to the Government Accountability Office, 35,836 Tennesseans had filed for the credit as of Aug. 22.

Nichols said there has been a concerted effort among real estate agents to inform the public the credit is available – and that it was thought to be expiring.

GNAR is reluctant to say the buoyant October numbers indicate the housing slump has ended. Nevertheless, Nichols pointed to numbers suggesting the improvement could be longer-lasting.

At nearly 24,000 properties, inventory is running 10.9 times sales, a high number but short of the historically high levels seen through the summer. Pending sales, too, are up – with 2,106 on the books.

“That’s 600 more sales [than November 2008], so that’s even more of an increase for next month if it all falls out,” Nichols said.

Prices, too, continue to normalize. The median price of a home sold in the region was $160,000, off less than 6 percent from the same month last year. For most of 2009, prices have been off between 8 percent and 10 percent from the year before.

For the year, the comparisons are improving, too. Year-to-date sales are down 18.4 percent, still significant, but much better than the 40-plus percent shortfalls seen early in 2009.