Nashville Real Estate Market Skipping Across Bottom

nashville real estate investorsWith all of the National news still painting a dim picture, it is good to see hard local numbers that prove Nashville is skipping across the bottom of the market. Serious real estate investors should take note. This article by Jenny Burns appeared in The Nashville Business Journal on June 27, 2008:

Nashville Area’s Shrinking Number of Empty Lots Sparks Optimism

Nashville’s lot inventory has peaked and looks to be slowly shrinking – a potentially good sign for the area’s real estate market, analysts say.
Developed lot inventory reached a record level of 37,760 lots in February this year, but new numbers show it dropped slightly to 37,056 in June, according to MarketGraphics Research Group.
The number of
homes finished but not occupied has also crested. In February, it was at a record level of 4,353. This month, the number has dropped to 3,990.

“This market is very, very close to the bottom. Almost 70% to 80% of indicators are already at the bottom or near the bottom,” says Edsel Charles, president of MarketGraphics, which tracks the new-home market in Nashville and 21 other states.

By 2009, 15% of the Nashville market will see some shortages, he says, and by 2010, about 40% to 45% will see shortages.

“By 2011, we have a problem on our hands with the availability of lots, “ he says.

The economic environment makes it difficult to buy and hold land though and Charles says about one-fourth of the builders are really struggling with the ability to borrow money to develop land.

It is very clear that large investors need to be purchasing developed lots with the intention of holding for 1-3 years depending upon the area of Nashville. It is our estimation that you should expect a 100% return during this period. For those interested in learning more about Nashville’s only real estate vulture fund, please do not hesitate to call.

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