MARKET SPOTLIGHT: The Southeast
NASHVILLE-DAVIDSON-MURFREESBORO-FRANKLIN, TN METRO AREA DISTRESSED SALES BREAKDOWN
Q1 2019 DISTRESSED SALES
Q1 2018 DISTRESSED SALES
11.9%
12.0%
A typical flip takes approximately 110 days from purchase to sale, Fish estimated. When it comes to selling his flipped properties; however, Fish is finding in- creased competition from the iBuyers who go online to find properties for sale with- out having to deal directly with anybody. “They’re a legitimate force in the industry. You get an offer on your house and you can decide to sell it. You don’t get top dollar for your house, but I don’t mind leaving a little money on the table. It’s more convenient than going through the listing process.” Like in other parts of the Southeast, housing affordability is a real problem im- pacting buy and hold investors in particular. “Affordability is impacting investors who buy and hold. The ratio of rent to purchase price is not ideal for folks who buy for cash flow.” As for flipping, Fish said it’s definitely tougher to flip in the current market given it‘s harder to buy and sell properties with not as much profit. “You can’t pay too much for the property
9.5%
9.0%
6.0%
5.6%
4.8%
4.4%
3.5%
3.0%
1.9%
Nashville, TN
1.1%
ATTOM reported a median sales price for a home in the metro area was $240,000 in the first quarter, up 5.3 percent from the same time last year and an 85 percent increase from the metro’s post-recession bottom price of $130,000. Rent in most counties in the Nashville metro area are paying $1,550 a month to rent a three-bedroom home, except for Maury County where the rent runs $1,307 a month for a similar home, according to ATTOM. “Our primary goal is to hold the property. If it doesn’t work from a cash flow or debt service perspective then it doesn’t meet our holding criteria and we will reno- vate and sell it,” he explained. “Rental properties are still in demand. Ours rent relatively quickly unless they are in an edgy area or in the path of progress.”
on the front end. It’s a lot of work on some of these to make a small profit. The market is not as forgiving as it was a year ago. You’re taking a lot of risk. It’s not a good market for a beginner,” Fish noted.
0.0%
PCT OF SHORT SALES
PCT OF REO SALES
PCT OF TOTAL DISTRESSED SALES
PCT OF THIRD PARTY FORECLOSURE AUCTION SALES
For investors looking for deals in the current market, Heflin said many investors have turned to wholesaling. “There’s a pretty active wholesaler market with guys knocking on doors and putting out offers. They’re looking to get lots rezoned for more density or just flipping the lots.” For investor Jeremy Fish with TN Homebuyers, buy- ing and holding, as well as flipping, work when the deal is right given current market conditions. “It really started showing signs of slowing down in
the first quarter of 2018, softening up a bit. Things still sell, but the houses have to be a little nicer and there’s not as many bids. Where you might have gotten eight bids before, now you get two,” Fish said. “Folks are offering below or near list price or maybe slightly above, but it’s not as crazy as before. The houses have to be nicer, better renovation with better materials if you want to sell. Days on the market have increased a little as well.”
Joel Cone is a freelance business writer based in Southern California. His articles have appeared in California Real Estate magazine, Real Estate Southern California, OC Metro, GlobeSt.com, Foreclosure News Report, the Los Angeles Daily Journal and the Smarter Investor blog for U.S. News & World Report, as well as many other print and online publica- tions. Contact him at snocone1030@gmail.com.
26 think realty housing news report
september 2019 27
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