Buffett Says U.S. Housing Will Recover by Next Year

Below is an excerpt on the article by Andrew Frye in Bloomberg on Warren's Buffet's comments on the residential real estate market.

March 1 (Bloomberg) -- Billionaire Warren Buffett said the U.S. residential real estate slump will end by about 2011, predicting that’s how long it will take demand for homes to catch up with the supply.

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote Feb. 27 in his annual letter to shareholders of his Berkshire Hathaway Inc. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits.”

The worst housing decline since the Great Depression has left one in five U.S. mortgage holders owing more than their houses are worth. Record foreclosures last year flooded a real estate market already glutted with unsold property, causing new construction to fall to the lowest in at least 50 years. The fall in homebuilding is the only fix unless the U.S. decides to “blow up a lot of houses,” Buffett joked.

“People thought it was good news a few years back when housing starts -- the supply side of the picture -- were running about two million annually,” said Buffett, the chairman and chief executive officer of Omaha, Nebraska-based Berkshire. “But household formations -- the demand side --only amounted to about 1.2 million.”

Berkshire, which owns a real-estate brokerage, a business that constructs pre-fabricated houses and units that make products used in homebuilding, has suffered amid the slump. Profit at Clayton Homes, the pre-fab housing business, fell about 9 percent to $187 million before taxes, while earnings at carpet manufacturer Shaw Industries fell 30 percent.

‘Deeply Invested’

“High-value houses and those in certain localities where overbuilding was particularly egregious” will take longer to recover, he wrote.

“He’s very deeply invested in this,” said Tom Russo, partner at Gardner Russo & Gardner, which holds Berkshire stock. “Across his industrial companies, he’s massively poised to gain” from a housing recovery, Russo said.

Buffett joked that curbing home construction was the best of three ways to reduce supply. The other two, he said, would be to explode homes in a “tactic similar to the destruction of autos that occurred with the ‘cash-for-clunkers’ program” or “speed up householder formations by, say, encouraging teenagers to cohabitate, a program not likely to suffer from a lack of volunteers.”

Top Selling Condos in Franklin TN

Cue Drumroll...."The award for the top selling condo in Franklin TN for 2009 goes to...(the tension is unbearable, isn't it?).... Hardison Hills! Congratulations!"

In case you didn't know, these awards are rigged - or at least slanted in favor of new construction. Obviously, a development with twenty to thirty new units for sale all year should outsell an established community with only resales.

With that in mind, here is my official list (using MLS data)of top selling developments in Franklin:

1. Hardison Hills with 18 units, averaging a sales price of $159,513.
2. 11th off Main (another new development in downtown Franklin) with (appropriately enough) 11 sold units averaging $328,914.
3. Fieldstone Farms - with 4 units in Prescott Place and 7 units in Windsor Park. (Windsor averaged $209,428 and Prescott around $186,600).
4. McKay's Mill sold 9 condos with an average price of $203,431.
5. Orleans Manor sold 8 units at an average price of $104,362.

Hononable Mentions go to Grant Park, Parkside at Aspen Grove, and River Rest which each sold 7 condos. Andover and Ashton Park each sold 6 units. Avalon, Carriage Park, Laurelwood, Reid Hill Commons, Brentwood Pointe The View, and Westhaven each had 5 condo sales. Forrest Crossing, Gateway and Southwind each had 4 sales.

If you have any questions about any of these or other condos, don't hesitate to contact me at 615-545-8611 or at jeff@jefffulmer.com. I have a video which gives a quick overview of 12 of these developments... You can check that out here on YouTube. There is more information on my Franklin TN Condos web-page.

Top Selling Condos in Brentwood TN

According to MLS/Realtracs, there were 128 condo sales in Brentwood TN in 2009. Concord Place was far and away the best selling condo development in Brentwood with 46 sales. Of course, this large Centex complex on Nolensville Road had more condos on the market than the competition. Fredericksburg and Brentwood Pointe finished 2nd and 3rd with 16 and 15 units respectively. Below are the other top selling condos in Brentwood TN.

If you would like to view a video of the condos in Brentwood, click here. Next up - Franklin TN condos.


Concord Place sold 46 units and the average sales price was $162,486.
Fredericksburg had 16 sales with an average sales price of $219, 168.
Brentwood Pointe had 15 sales with an average sale price of $183,595. *(This only includes the condos in Brentwood and not Franklin).
Brentwood Trace had 14 sales with an average sales price of $141,731.
The Terraces of Brentwood (in Brentwood Chase) had 13 sales with an average price of $221,000.
Mooreland Estates had 8 sales and averages $193,206.

FEBRUARY HOME SALES INCREASE; PENDING SALES CONTINUE TO RISE

There were 1,308 home closings reported for the month of February, according to figures provided by the Greater Nashville Association of REALTORS®.

This represents an increase of 3.2 percent from the 1,267 closings reported in February 2009. Year-to-date closings through February are 2,341, a 4.5 percent increase from the 2,241 closings reported through February 2009.

“The number of closings are up from last year, which has been the case now for five consecutive months. Pending sales have also increased, which is a positive sign for what we can anticipate for the spring,” said GNAR President Lucy Smith. “With median residential prices virtually the same as last year, median condo price down slightly and interest rates still remarkably low, the overall market remains stable with some cause for optimism as people take advantage of these conditions.

“It was expected that the market would stabilize after the significant increases in closings at the end of 2009 due to the tax credit deadline. But, with the next deadline at the end of April, it is reasonable to think that we could see another burst of activity in spring and early summer. And, with increased activity and energy in the marketplace, it is possible that there will be more closings beyond first-time homebuyers in the upcoming months,” Smith continued.

There were 1,614 sales pending at the end of the month, compared with 1,452 pending sales at this time last year. The average number of days on the market for a single-family home was 89 days.

The median residential price for a single-family home during February was $159,900, and for a condominium it was $149,950. This compares with median residential and condominium prices of $160,000 and $151,120, respectively at this time last year.

Inventory at the end of February was 23,159 up from 23,122 in February 2009.

“Inventory is up slightly from last month and pretty even with levels from last year,” added Smith. “With less than 60 days left until the homebuyer tax credit deadline, excellent interest rates and a good variety of homes available in the Greater Nashville market, the spring and summer selling seasons could be better than what was the case during the past two years.”

To see this whole article, complete with graphs, click here. For more information on homes and condominiums in Nashville, feel free to contact me, at 615-545-8611.

What Buyers Want

Or What's Hot (and Not) in New Construction

The Tennessean recently ran an article that looked at the new trends in construction and what selective buyers are currently looing for in their next homes. Not surprisingly, smaller, one-level houses are very popular, as opposed to the bigger three story homes. Large two story high great rooms are less in favor, now considered a waste of space of energy.

Outdoor living space, including outdoor fireplaces are hot. Living rooms are viewd as less important. Buyers are looking for at least one home office and having at least one bedroom on the main floor is a plus, two being even better. If possible, buyers prefer a private bathroom for every bedroom. Less popular: shared or "jack and jill" baths.

Back doors with foyers or 'mudrooms' with built-in cabinets or cubbies are popular. Formal foyers with grand staircases are less sought after.

IN - Granite countertops, trim painted cream, textured faux wall treatments, bronze
OUT - Corlan countertops, white painted trim, small patterned wall paper, brass
HOT - Italian style villa and English French country style homes
NOT - Greek revivial and colonial/traditional homes

ALWAYS HOT - Kitchens that connect with living spaces, hardwood floors, spa like bathrooms, storm protected living areas, and dining rooms.

Check out the article and pictures at The Tennessean.

For more information on homes in Franklin TN, homes in Brentwood TN, Brentwood TN condos, Franklin TN condos, or Condominiums in Nashville that are hot - or not so hot - feel free to contact me at 615-545-8611 or jeff@jefffulmer.com