Homes in need aren’t the ones selling in bidding wars
This week’s “Sale of the Week” confirms some homes selling for more this year than they did last year. However, there are some houses in some places that are not selling as quickly.
The ancient maxim “location, location, location” had gone out the window the past two years as anything with a location of Nashville or the vicinity sold and sold in short order for high prices with no contingencies such as appraisal, inspections or finance.
As of late, some of those properties located on busy streets, under power lines, in flood plains or facing any other issues that were seen as shortcomings in days of yore are once again struggling to sell.
Well-maintained, move-in-ready homes in good locations continue to sell well and sell for more than they did last year, while those with challenges are not appealing to the current set of buyers who have twice as many choices as those who bought in 2020-21.
Even though fixed-rate mortgages are hovering around 6%, adjustable-rate mortgages are in the mid-4% range, so buyers are ever optimistic that the higher interest rates will blow into the wind before the rates adjust.
Sale of the Week
When the residential real estate boom hit in 2021, there were many fearful that the city was bubbling and that buyers paying too much for properties would never be able to recoup their investments when the market shifted.
One market segment that failed to experience the overall explosion was houses that required some work in order to reach perfection, sometimes known as a fixer-upper, a home in need of TLC or perhaps a residence that Realtors suggest buyers might be inclined to invite their interior designer to the showing.
Such was the case of 202 Moultrie Park when veteran real estate broker Sheila Reuther listed the property in late June 2021. Reuther has sold hundreds of houses throughout her illustrious career and has never been one to sugarcoat – not even when listing in Sugartree, the home of Moultrie Park.
Reuther described the home as an “elegant, custom-built, one-owner home” and noted it was being sold to settle an estate and was “ready to be taken to the next level.” Additionally, she noted this was an opportunity to bring this home back to its original glory.
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And just in case the reader was unable to ingest the nuances, she added the house exhibited “classic detail throughout but needs to be renovated.” Case closed. It’s a fixer-upper.
Luckily for the estate and Reuther, Cecil Elrod who, like Reuther, hails from Engel Voelkers Nashville, had the buyer. Based on the photography from the two listings, the buyer renovated the kitchen and gave the entire house a facelift, just as Reuther suggested.
Since the house was in need of updating, Elrod was able to negotiate a price of $1.125 million, slightly off the $1.349 million that Reuther had listed. The Metro tax records had the house appraised at $1,317,200.
Those transplanting their families in Nashville have no time or resources to renovate, so this was not going to be a multiple-offer, pay-over-list price with no contingencies sale.
After a year of renovating, remodeling, updating, bringing the house back to its original glory and taking it to the next level, the house hit the market for $2.2 million in May 2022, some nine months after the purchase with the seller hoping to realize a gross profit of slightly more than $1 million.
Some 77 days later, the seller agreed to $275,000 less than the list price, but $800,000 more than the acquisition price. There were, of course, significant improvements made that would not have been inexpensive in the recent construction environment.
Keeping the entire legacy of sales within the family, John Clayton of Engel Voelkers Nashville represented the buyer on the home when Elrod switched from buyer’s agent to listing agent.
Elrod noted the neighborhood is surrounded by a state-recognized arboretum and described the house as “exquisite.” He described the den as “richly paneled” and highlighted the screened porch.
The house has seven bedrooms, five full bathrooms and a half-bath in 5,326 square feet, oddly enough the same as when Reuther had it listed.
The answer to the “Where are the good deals?” question is that they are in houses that need to be returned to their original glory, except with new kitchens, new bathrooms, new flooring and fresh paint.
And remember, the carrying costs are back to their original glory.
Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty and can be reached at richard@richardcourtney.com.