Local developer Marty Heflin has a different take on the apparent strength of the apartment sector, which is almost universally viewed as having been one of the few beneficiaries of the housing crash.Yes, there are reasons to be bullish, he says, but investment pressures may be pushing some firms to develop new rather than buy existing properties with the hope that valuation increases will help them make money down the road.

Soo, if you can build to a 7 yield and expect a bidding war in three years to push cap rates down to the sub-5 level, you could experience some healthy returns. It also beats return expectations if you are buying quality assets in the 4.5% cap range or even value-add plays in the 6% range. You might never get the 200 bp spread on the exit that would goose your returns.

Heating and air conditioning wholesaler Comfort Supply has opened a location in Knoxville. The 14,000-square-foot warehouse and showroom is the company's fifth and comes a year after it expanded into Clarksville and extends its reach eastward from Cookeville. CEO Clay Blevins said "Knoxville was the next logical step for Comfort Supply," which distributes Ruud products and has averaged annual revenue growth of about 20 percent since 2006, when it first grew beyond Nashville proper.

The bad news: Research firm Clear Capital says Nashville is one of only a handful of cities in this part of the country where home prices are still below year-ago levels. The good news: They're up 0.8 percent from the fourth quarter, which puts us 13th nationally.

On the whole, Clear Capital says most regions are working their way back to price levels higher than those seen at the bottom of the cycle in early 2009. The numbers may not be pretty for a while, but they'll clear up soon enough. "In the Midwest, Northeast and South regions, the price declines currently being reported elsewhere date back to the October 2010 through January 2011 period and reflect a post tax-credit reset reminiscent of early 2010. Those declines are out-of-date and do not accurately represent current home price trends," Clear Capital said.

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The U.S. apartment vacancy rate dropped to its lowest point in almost three years, Bloomberg reports, as weak homebuying fueled demand for rentals. The vacacny rate fell to 6.2 percent from 8 percent in the year-ago quarter — the lowest since the 6.1 percent rate in the second quarter of 2008.

“There is a bias against homeownership at this point, especially if you feel home prices won’t rise and you can wait,” Victor Calanog, chief economist at Reis, said in a telephone interview. “Most of the applications for construction and building loans are for multifamily buildings.”

Beazer Homes, one of the country's largest residential builders, is expanding into the rental and resale business with the launch of a Pre-Owned Homes Division. The venture has started its business in Phoenix and will likely expand into other distressed Western markets soon. No word yet on whether Nashville, where Beazer is marketing 11 projects, will become part of the company's pre-owned push.

UPDATE: A Beazer spokeswoman says there are no plans to come to Nashville and that the company "is not prepared at this point to speculate whether or not — and where — we would possibly expand" the pre-owned division.