Nashville new Construction
Posted Jan 6, 2007 @ 4:59 pm, Viewed by 520 Visitors, Read 521 Times.Nashville Tennessee
Today was another day with a client looking for the perfect home at the perfect price in the perfect location. Nothing unsual there. All homebuyers have an ideal home they are searching for and in the end make a number of compromises so that they end up with something that comes as close as to their ideal home as possible.
Location is still King!
It seems in Nashville that the old adage of Location, Location,Location is still the basis for the majority of buyers when it comes to finding the ideal place to buy their next home.
Out with the old and in with the new.
Driving around the Brentwood, Belle Meade and West Meade areas today with my client it became very apparent that the older homes built in the cheap land days of the 1950's and early 1960's were becoming sought after. Not for the value of their small bedrooms, smaller closets and original hard wood floors. The value in these properties is almost all in the lot itself. Street after street we saw the traditional $500,000 ranch home sitting in the shade of a newly built $2 million dollar luxury home. These mansions are the new trend in developing in the Nashville inner city areas.
These traditionally popular locations have maintained their desirable address due to proximity to the downtown business districts and the upscale shopping that is only 5-10 minutes away. There are plenty of new upscale developments around Nashville and further afield but these lots in areas like Green Hills and West End are now the most sought after by buyers and builders alike.
Rising Land Values
The end result is that the value of the land is increasing to a point people are being approached by developers and asked if they would consider selling their home. If the sellers are offered a figure they can't refuse then with weeks you'll see a new mansion starting to rise of from the ground where the 60's ranch once stood.
As the number of new luxury homes continue to be introduced to these areas as does the appraised value of the existing homes. That in turn means a rise in the tax bill for the current residents. This is also leading residents to re think their position on selling. In fact, faced with the prospect of a huge tax bill based on the newly appraised values, many people are letting it be known that they are ready to sell.
This focus on new construction then helps to promote these areas as the deirable locations to out of state buyers and further enhances the demand!
In the end, this is merely history repeating itself, in that the life span of the average American home is now probaly less that 50 years and we will see the rapid tearing down of more of the older homes to be replaced with these new luxury mansions.
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Nashville Investor
I am thinking of investing in Nashville, would it be worth it to purchase some of the older buildings and demo and reconstruct? What is the current price of building materials per square down there right now?
In terms of tear-down and building a new home that effectively is a luxury home the question of wether its worth while is easily answered in that builders are actively scouring the neigborhoods for suitable projects. many of these homes do't even make it to the MLS as the are approached directly by investors and builders and buy the home privately. The cost per sq ft of these luxury homes when built is anywhere from $200-250 per dq ft according to one luxury home builder in Nashville.
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We are seeing similar actions in several areas here in Memphis, especially the East Memphis Shady Grove area. I believe people in general, will only travel so far (the suburbs expanding outward from the Metro area) and then they start the migration back inward toward the Metro area. This has been seen in Atlanta, LA, and other large cities, and now even humble Memphis and Nashville. Nice article.