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Home, sweet home: Sales increase as prices fall

Wednesday, January 30, 2013

Ben Craig of Craig & Wheeler Realty & Auction LLC, center, goes over paperwork with Marion and June Savage at a Shelbyville condo the couple are thinking of buying as investment property. Home sales in Bedford County are on the rise, Realtors report.
(T-G Photo by Jason Reynolds) [Order this photo]
Bedford County home sales in 2012 were at their highest levels in three years, Realtors report, although prices have slid.

A home for sale on Horse Mountain Road.
(T-G photo by Jim Davis)
"Foreclosures are going through the pipeline; that's what's impacting the average sales price," said Harold Segroves of Coldwell Banker Segroves-Neese Real Estate.

A total of 396 houses in Bedford County were sold by Realtors in 2012, up from 361 sales in 2009, according to data from the Middle Tennessee Association of Realtors' Multiple Listing Service (MLS). The data lists only sales made through the MLS, which does not include for-sale-by-owner transactions or many auctions. The sales total in 2011 was 335.

The average sales price last year was $104,496, down from $115,020 the prior year. That's the lowest price in at least five years, according to the MLS. The average sales price in December 2012, however, was better, at $115,263.

Segroves estimates that 60 percent of last year's sales were foreclosed properties.

"Only your investor-grade and first-time homebuyer properties are selling, primarily," he said.

The sales price will start to rise once first-time homeowners move back into the market to buy a larger house, Segroves said.

Low inventory

It took an average of 115 days for a house to sell last year, down from 126 days in 2011, according to the MLS.

Inventory is low both locally and nationally, Realtors say.

Realtor.com reports new listings of homes for sale across the nation were down 14 percent from the prior year. Nationwide, the supply of existing homes fell to 4.4 months in December, according to the National Association of Realtors, which is the lowest it's been in more than seven years. Six months of supply is considered to be a healthy balance between available homes and buyers.

Locally, there are currently 376 active homes for sale in the MLS, Segroves said. The 396 sales just last year makes for a sale-to-inventory ratio of roughly one-to-one. The inventory is about 100 units lower than normal, he said. A healthy market needs a higher turnover of inventory, Segroves said.

Hard search

That low inventory means it can be hard to find the perfect home, as one local family said on the Times-Gazette's Facebook page.

Shayne LeMaster of Shelbyville said that she and her family have been looking for a home this past year. The family has either been outbid on many of the houses they considered, or the builders did not come down on the price enough for them, she said.

However, Segroves said he thinks the real estate market is gaining steam, especially with the increase in sales from 2011.

"We're starting to gain a little traction and starting to move out of this," he said.

Out-of-state buyers

Some people, especially from out of state, are investing in undeveloped land, said Belinda Craig with Craig & Wheeler Realty & Auction LLC. Cropland is selling for about $3,000 per acre in some cases, she said, while five-acre tracts for homes may sell for between $25,000 to $40,000.

Tennessee is especially attractive to people from out of state because the Volunteer State has no income tax and the cost-of-living is lower here than in other areas of the country, Craig said.

Kathleen and Larry Bice moved to Bedford County about two years ago from the Chicago suburbs.

The couple bought a three-bedroom, two-bathroom house on 2 acres in Pleasant Grove, said Kathleen Bice, who is retired from an insurance office in Illinois. Her husband is a retired police officer. The Bices selected Bedford County, Kathleen said, because they had friends here and because they got to know Belinda Craig while checking out auctions in the area during the last 11 years while looking for homes.

"We decided we really liked Shelbyville," Kathleen Bice said. "Shelbyville is so friendly, people can't do enough for you. It's the way it used to be when I was growing up. Illinois is not bad, but we like the simpler lifestyle, not as much racing around. The cost of living here is lower. That's fine. We don't need the glitz and glamor and jewels kind of life."

Bedroom community

Bedford County has also become a bedroom community for people who work in Nashville, Franklin, Murfreesboro and other nearby cities, Craig said.

"It seems like it wouldn't be like that because of the distance, but we have the interstate at Beech Grove Road," she said.

Low interest rates help

Low interest rates are helping drive home sales, said Candy Joyce, association executive of the Middle Tennessee Association of Realtors.

Freddie Mac reported an average mortgage rate of 3.42 percent on a 30-year loan for the week of Jan. 21-25.

However, economic uncertainty is holding some people back, Joyce said.

"People may have savings ... but with job insecurity, they don't make the purchase," she said.

Credit is key

There are still loans available where a buyer does not have to have a down payment, but does have to have good credit, Segroves said. Overall, however, getting a loan is more difficult than it was a few years ago.

"Credit scores are all important, because lending has gotten back to where it should have been," he said. "That's keeping some from entering the market, but making them focus on their credit scores and making them healthy. That makes for a stronger market. You have people buying homes who can keep the homes."

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