One of the many tasks my clients expect me to be able to do is to predict what is going to happen with home prices, appraisal values, and time on the market. I only wish that I had a crystal ball to be able to advise them 100% accurately, but unfortunately, that tool does not exist. However, I would like to take a crack at predicting the 2009 real estate market in Nashville based upon aggregated information collected from dozens of trusted sources.
Prediction #1: I believe that the record will show that the Nashville real estate market actually hit a price bottom in late 2008.
Prediction #2: The rate of home sales will increase dramatically by summer of 2009, but not make a full recovery until 2010.
Prediction #3: Mortgage rates will continue to soften and the 30 year fixed rate will hover around the 5% mark.
Prediction #4: There will be a barrage of foreclosures in the second quarter of 2009, but there will also be buyers in the secondary market who will snap these up without hesitation. Nashville real estate auctions will become more numerous and will be well attended.
Prediction #5: Approximately 33% of the custom builders will be out of business by the end of 2009.
Prediction #6: Several large developers will unexpectedly go bankrupt.
Prediction #7: 1 large regional back and 2-4 local banks will cease to do business in Middle Tennessee.
Prediction #8: Rental rates and rental occupancy rates will continue to fall slightly until they stabilize and then turn upward in the September to October months.
Prediction #9: The price for finished lots will take a thrashing and several “Real Estate Vulture Funds” will acquire large groups of these lots. In turn, they will make a killing on the resale of these lots within 2 years of their purchase.
Prediction #10: The value of commercial real estate, especially retail space, will take a massive beating worse than the S&L crisis in the 1980’s.
Prediction #11: Despite the predictions above, 2009 will produce a healthier market than did 2008.
BOLD Prediction #12: By 2010 parts of Nashville (Brentwood, Green Hills, Forest Hills, Oak Hill, and a few others) will experience extreme shortages in both land and homes. Prices will temporarily skyrocket and quite a few folks will make handsome profits on property they acquired during very early 2009.
Obviously, we have been wrong before, but if you research the past 4 years of predictions from this blog, you will find that we are correct more than 75% of the time.
If you liked this post, you may also like:
Nashville Real Estate Market Report February 2009
Multifamily Housing Starts Unexpectedly Surge
January Home Sales Numbers For Nashville