Smart Buying
What's Your House Worth?
This time it's for real: The hot housing market is gradually cooling down. To see how moderating price hikes affect your town, check our survey of 100 cities.
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, January 2006
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In both Bakersfield and Fort Walton Beach, housing prices were driven even higher by investors and speculators. That has made it tough for first-time buyers and some move-up buyers to afford a home in their own town. But for homeowners who got in early, the ride has been sweet.
One native of Fort Walton Beach for whom the market has worked well is Debbie Collins Culbreth, 49, principal of Ocean City Elementary School. Last summer Culbreth bought a three-bedroom waterfront home with 2,800 square feet and stunning views. She put down nearly $300,000 on the $820,000 home -- the proceeds from the sale of her former home, a waterfront condo, which she bought in 2001 for $157,000 and sold in June for $425,000. If prices fall, it's no matter. Culbreth got married over the summer, and she and her husband expect to live there indefinitely.
Rising star
The beat of Nashville's housing market has been strong and steady, resulting in a price gain of 8.1% for the year. Music City could just as easily be nicknamed "corporate relo city," given the influx in recent years of major businesses, such as Dell; Asurion, a service provider to the wireless communications industry; and Caremark, a pharmaceutical services company. Gary Taylor's and Melody Wofford's real estate agents, Mike and Candie Worsham, note that young Nashvillians once moved to Atlanta for jobs, but now they stay home or are returning.
The Worshams describe Nashville as "a small town with a big-city feel," but it's the small-town -- even rural -- aspect that will rivet visitors from congested regions. In November, Gary and Melody flew to Nashville from Chicago so the Worshams could show them homes in nearby Williamson County. Within a 20-minute drive of downtown, a ring of forested hills bright with fall colors comes into view. Just beyond are expanses of pastureland dotted with estate homes that have enough land to justify the name. To top it off, the southern hospitality is real, not rote. The county seat is Franklin, Tenn., which is 20 miles south of Nashville. It features a Confederate war memorial in its town square and used to be small, slow and isolated. Not anymore. Nissan plans to move its U.S. headquarters there over the next couple of years.
Gary and Melody look at five single-family homes with at least a half-acre of land priced under $350,000. To buyers coming from, say, California, where the median home price in several cities tops $600,000, finding five such properties listed for sale might seem astonishing. The couple tour a two-story, three-bedroom home on an acre of land, which lists for $309,000, and Gary paces off the yard to see if there's room to add a master suite. But their favorite is a Southern-style ranch, with a master suite downstairs and two bedrooms and a bath upstairs, selling for $344,900. They can't afford to make an offer yet, and they hope the house, or one with similar appeal, will be available when their Geneva home finally sells.
Meanwhile, the couple's agent in Geneva recommends that they reduce the price further. That would make their home compete better with the less charming but brand-new homes being built on the edge of town. Candie Worsham, in Nashville, urges patience. For now, the couple will hang tight, but it looks as if winter might feel longer than usual in Chicago.