The National Association of REALTORS (NAR) says over 50 percent of March’s home sales were tied to first-time buyers, many of whom snapped up foreclosed homes and other distressed properties. Experts believe getting first-time buyers off the sidelines to take advantage of historically low interest rates and federal tax credits will reduce the glut of homes on the market and spark a recovery, and some point out that first-time buyers are helping to revitalize communities in Florida, California, and other states hit hard by foreclosures. However, distressed properties often sell for 20 percent less than traditional dwellings, and the increase in lower-end sales is driving down the national median home price.
We are very interested to see the Nashville home sale reports from GNAR to see if this national trend has translated to our local Nashville real estate market. We certainly expect to see first time buyers making up a larger percentage of sales, but would be surprised to see it reach the 50 percent level. Personally, we are see more and more savvy investors snapping up investment grade properties. These investors tend to lease the properties with a property management company in hopes of flipping a few years down the road. There are some very good equity plays in this market.