On the bright side, this forecast is not as downbeat as that of Zillow...
Housing market research firm CoreLogic is forecasting that Nashville-area home prices will rise just 2 percent this year. That's the lowest number among major cities and less than half the expected national price gain. Here's CoreLogic's release and below is how the firm expects many other cities to perform.
Zillow has compiled its final 2013 numbers for the nation's housing markets and says the average Nashville-area home value rose 5.5 percent. That's a percentage point below the national average, a gap Zillow's researchers say will grow going forward: They expect local home values to rise just 0.9 percent this year, while the national number is projected to increase 4.8 percent.
Kathleen Madigan at the Journal points out that housing starts finished the fourth quarter at their fastest pace since the spring of 2008. On top of that, she adds, home builder sentiment suggests more good quarters to come. That should translate to good times at Nashville-based Louisiana-Pacific, which will report its fourth-quarter results next month. But analysts aren't forecasting big things from the company: Their Q4 consensus EPS forecast has ticked down a penny to 5 cents in the past month while 2014's number has come down to $1.22 from $1.30. LP stock (Ticker: LPX) closed at $17.29 last Friday and is down slightly over the past three months.
Real estate research firm CoreLogic says home prices in the Nashville area finished November 8.8 percent higher than the year before. (Taking out distressed properties, that number ticked up to 9.2 percent.) That's in line with the numbers we saw for much of the second half of 2013. The question for the next few months is how much that year-over-year number will drop. Last summer, CoreLogic's team forecast that, by March, Middle Tennessee home prices would be just 1.2 percent higher than a year before.
We still don't have a much clearer idea of what the post-recession "normal" mortgage delinquency and foreclosure rates for Middle Tennessee will be. The latest data from CoreLogic shows that those numbers dipped in October to 3.65 percent and 0.78 percent, respectively. Those are down 97 and 47 basis points, respectively, from a year ago, a pace that's been remarkably consistent over the past year. (In October 2012, the year-over-year drops were 86 and 67 basis points.)
Looking at an area map, CoreLogic's data reveal that the Interstate 24 corridor and parts of Sumner County continue to gradually improve the way other parts of the region have done before them.
The homes in the Nashville area are on track to finish 2013 with a total worth of $121 billion, says research firm Zillow.com. That's up $7 billion, or more than 6 percent, from last year — a gain that eclipses those of a number of larger cities such as St. Louis, Pittsburgh and San Antonio.
Here's Zillow's rundown for most of the nation's largest markets:
The economic recovery and Nashville's ascent to It City status have brought with them numerous side-effects. In this week's Scene cover, Bobby Allyn takes a look at piecemeal residential redevelopments, which many area residents aren't at all thrilled to see. The value of teardowns has more than doubled in recent years, he writes, as builders have begun taking advantage of rising land values in many of the city's most popular neighborhoods. That is prompting talk of tightening building and zoning regulations that would preserve some of the character of specific districts and — fingers crossed — lead to more balanced development.
Many advocates point to inclusionary zoning as part of the solution. It's a zoning model that makes developers devote a percentage of new housing units to low-income residents. Developers, in turn, usually receive incentives like looser density limits and other relaxed zoning requirements. In Montgomery County, Md., just north of Washington, D.C., for example, up to 15 percent of new housing has to be affordable. The requirement has spawned around 11,000 affordable units over several decades.
The housing market in Tennessee continues to improve, says David Penn of MTSU's Business and Economic Research Center, but not as quickly as it has in recent quarters. One bright spot is that the number of distressed properties continues to trickle downward. Case in point: The number of foreclosure starts around the state in the third quarter was the lowest in seven years.
Looking for home price appreciation in the coming year? The researchers at Zillow.com say you need to look beyond the Nashville MSA: Only in La Vergne, Thompson's Station and White House do they see home values rising more than 1 percent. That's a big change from this year, when nine area cities posted average price increases of 7 percent or more.
Zillow's data also shows that only in Brentwood and Franklin are less than 10 percent of homeowners with a mortgage still underwater. Along those lines below is, courtesy of fellow research firm CoreLogic, the chart showing how delinquencies and foreclosures have trended down in the past 18 months.
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