Grant Hammond - Nashville Homes

It is rumored that the 5th and Main condos in Nashville have endured receivership and will be placed back on the market any day. From what I understand, Wachovia Bank continues to be involved in the project as the primary construction lender and has actually already resumed construction in phase II (someone send me a pic). I also learned that the bank has cleared all liens and that all contractors have been paid an agreed upon sum in order to resume work. No word if that sum is less than the amounts originally filed in the mechanics liens.

It also appears that that Ghertner is no longer managing the building. Freeman and Webb, one of Nashville's most diverse property management companies, has stepped in to not only manage the property, but also to handle all of the retail space and residential condo leasing. This of course means that Village Property Management is out. There is not all bad news for Village as they will continue to market the individual residential condos for sale.

It is also rumored that the more than 100 outstanding pre-construction condo contracts will be brought back to the table. No word on what concessions may be offered, but I would expect to see a minimum of 3 percent in closings costs, all appliances thrown in and perhaps some amount of HOA forgiveness. For those who do not wish to close, it appears that you may be able to get some of your deposit back, maybe 50 percent or so, but don't expect the bank or Village to refund your entire deposit.

My advise for pre-construction contract holders: negotiate, negotiate, and negotiate some more. This is a trendy project with floor to ceiling glass all over the place and has great rentability. I wouldn't be completely against owning a condo in this building. Nothing really looks like it in Nashville and it will be a solid investment in the long run. No room to flip and make a profit in this economy, so it truly is a 3 or 4 year investment.

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The graph graph shows a median price analysis compared to the average inventory held for the Nashville condo market since the first quarter of 2007 through the second quarter of 2009. This is market information that I have collected using the official condo sales numbers from GNAR and are deemed to be accurate.

This quarterly condo median price and inventory analysis clearly shows what we had been thinking, condo prices have been slipping while inventory has been rising. However, the median price drop has not been as drastic as most had assumed. The trend line shows a net effective price drop of only 3.7 percent over this time period. The more eye opening statistic is that the trend line shows a net effective inventory gain of 29.7 percent.

What does this condo price analysis predict? It clearly shows that Nashville condo prices have been able to hold steady during the first half of the recession, but it also clearly shows that condo prices will drop rather significantly if the inventory levels continue to trend upward. Really, it's a simple exercise in the laws of supply and demand in a free market economy where outside economic factors such as income, employment and ability to obtain a mortgage are at play.

The good news: There are no major condo projects set to deliver after The Velocity delivers in late Summer. The lack of new construction may allow our inventory levels to fall back to the 2,000 level by the end of the year which may allow the Nashville real estate market to avoid the condo price thrashing other areas have experienced. Only time will tell the tale, but clearly we have reached the fork in the road where one leads to sustainability and the other into the unknown free fall.

The bad news: There is currently one downtown Nashville condo project in receivership, the 5th and Main project. It remains to be seen what the banks and attorneys involved with this 130 condo project will do with the remaining unsold condos. Clearly, if the bank fire sales these condos, the entire market shall suffer a price decline.

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It amazes me how many buyers that do not consider short sales, foreclosures and REO properties when they are looking for a home or condo in Nashville. Part of the problem is that your Realtor probably does not know how to find these properties in the first place, or perhaps they are not sure how to present an offer.

If you are in the market for a home or condo in Nashville, you should take a glance at the short sales and foreclosures before you make your final decision! At the time of this post, there are multiple high profile short sales and REOs in The Viridian, The Bristol West End, The Enclave, Werthan Mills, Row 8.9, The Watauga, Lenox Village! There are even five and six hundred thousand dollar homes in Brentwood, Franklin, Cool Springs, and Green Hills being short sold.

Why aren't you buyers considering these properties?!? Most of these short sale properties are less than 5 years old and most are in really good condition. Whether you are a first time buyer, a relocating executive or a casual investor, there are excellent deals out there in your price range.

Call or email the Remarkable Homes Team to get on our daily Nashville short sale and foreclosure email blast. We are the experienced and educated team that will help you purchase with instant equity. Invest wisely in your real estate. Call Grant Hammond at 615-945-7123 or email grant@remarkablehomes.com

Investors - worried about getting you investment property leased. Don't! We work exclusively with Summit Property Management, Nashville's #1 property management company.

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With the collapse of Wall Street giant Lehman Brothers, so may one of Williamson County's largest residential projects. The Laurel Cove project is a 1,120 acre, 800 luxury home, Greg Norman designed golf course and day spa in Arrington, Tennessee. Lehman Brothers holds the $121 million construction loan as well the ultimate authority to pay all vendors and employees. At the moment the Wall Street giant filed for bankruptcy they were already 2 months behind and now sources say it may take more than 6 months to unravel and assume the loan from the bankruptcy trustee.

What does this mean for the project? It literally means that no work whatsoever will be done until this whole mess is sorted out. Residential construction had not begun yet, but the golf course, club house, and day spa were all more than 50% complete and residential construction was to begin in early 2009.

Prediction: With the national economic slowdown, the developers of Laurel Cove will most likely drag their feet as much as possible to allow the economy and financial markets time to turn around. We would not be shocked if construction resumed any time before 2010.

Update: This Nashville Blog has learned that it may take more than 9 months to sort out the Lehman Brothers bankruptcy. As predicted a month ago, the national real estate picture has continue to struggle and Nashville real estate is holding rather steady.

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This year has been tough on a lot of people, especially on home sellers. In an effort to lighten the mood and bring a little levity to your day, this is Your House As Seen By:

Yourself...



Your Buyer...



Your Lender...



Your Appraiser...



Your County's Tax Assessor...

BTW - we just launched our new and improved real estate auction website today. We are very excited to see how that does in the market place.

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