Wednesday, December 01, 2004

Rate hikes not expected to slow housing boom

The Manchestor Times

The booming housing market in Coffee County is not expected to feel the effects of rising interest rates anytime soon.
The Federal Reserve has raised interest rates on four occasions this year, including a quarter of a percent raise November 15, bringing short-term interest rates to two percent.

Janet Nettles, a broker with Christine Fisher Realtors, said she does not foresee a slowdown in the booming housing market in Coffee County due to increasing interest rates.

"There is a shortage of housing in Coffee County. They can't build them fast enough. We're all busy," Nettles said.

Rutherford County is running out of land and Franklin County land prices are rising due to the Nissan plant in Decherd, she said.

More people are settling in Coffee County due to the comparatively low land prices, Nettles added.

Vicki Wells, another broker with the real estate firm, said she believes, at some point, rates will level off, people will adjust to what that level is and their fear will subside," Wells said.

"It's a buyers market right now. The market will change. Interest motivates buyers and sellers. They don't like uncertainty. People will always buy and sell, but rates affect the number of homes on the market.

"People are motivated by different things in their lives," she said.

A lot of people are motivated to move during the holiday season, she said.

"We're seeing a lot of people moving here from Florida to retire. Those from Northern states are moving here in the wintertime.

"Job changes are a big factor. People are moving here for employment in our industrial park.

"We need to promote our industrial park and economy. City and county officials have worked very hard to bring industry in and that keeps our real estate market growing."

The loan program and financial situation of the buyer determines the interest rate they will get, Wells added. She echoed Nettles' sentiment that Murfreesboro is becoming overcrowded.

"The infrastructure is not accommodating the homes they are building. I feel like they are moving in this direction, which will keep our market strong," Wells said.

"Last year was the strongest year Christine Fisher Realtors has ever had. This year, we are right on target to meet that again."

New homes are being constructed in the Maple Springs Estates Subdivision off the Woodbury Highway and infrastructure work is being done on Creekside Manor, a new, high-end housing development on Maple Springs Road.

The approximate 40 Lots in Creekside Manor are priced between $25,000 and $35,000, with some outlying larger lots expected to bring as much as $50,000. New lots in the existing Maple Springs Estates subdivision are going for $20,000 to $25,000. New construction in that area should increase the value of the existing properties there, she said.

Wells said new and existing homes can be found for prospective buyers in any area of Coffee County and Manchester.

Nancy Jernigan, co-owner of Coffee County Realty, said Mustang Construction is developing the infrastructure for Whispering Winds, a new 100-lot subdivision next to Fredonia Village.

Jernigan said lots were not being sold separately, but Whispering Winds homes would average between $160,000 to $200,000.

She said it is difficult to tell if rising interest rates are affecting business this time of year. The holiday season is normally a slow time for the real estate market, but in the last two years, that downturn has been hardly noticeable, she said.

"Just about all the agents are showing. Some are in a rush to get their contract to the banker so they can lock in their interest rate," Jernigan said.

"It's not like people would think," she said. "We see an increase in business when rates are on the way up, versus on the way down.

"We've had two record-breaking years. Last year was unbelievable. This year, we've already done 15 percent more than last year.

"We've been very fortunate," she said.

Outsiders are migrating to Tennessee for its comparatively lower cost of living, Jernigan said. Others choose the state because it is a mid-point between Chicago and Miami, she said.

Paul Guess, city codes administrator and safety director, said housing permits are a little slow right now, but added that is normal for this time of year.

A lot of permits are issued before the rainy season sets in as contractors work to dry houses in so they can work inside, Guess said.

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