Our housing cloud is lined with silver pricing
by Matt Edens
Housing starts, home sales, and the wildly seesawing stock market: Itâ’s as if every day the newspaper brings a new set of disturbing numbers. Even Knoxvilleâ’s relatively robust real estate sector isnâ’t immune from the fallout from the nationâ’s free-falling housing market and rising foreclosure rate. Just last week, General Shale Brick announced it was closing its Riverside Drive facility due to reduced demand, resulting in the loss of 65 jobs.
Luckily, last weekâ’s news also included a couple of encouraging stories on the local housing frontâ"even if one of them wasnâ’t exactly reported that way.
â“Brownlow Sales Slowâ” said the headline in the News Sentinel, announcing the results of last Tuesdayâ’s auction. Redevelopment of the historic school, standing on 4th and Gillâ’s northern end, has been troubled ever since the county sold off the building several years ago. And it may still be, depending on whether developer Kinsey-Probasco-Hayes feels that pre-sales of 13 of the projectâ’s 35 units is enough to justify proceeding with construction.
So why am I encouraged? The answer lies at the center of the on-again, off-again plans to convert the building into condos: sales prices per square foot. Recall that downtownâ’s resurgent residential development didnâ’t make the shift from rental units to owner-occupied condos until prices had pushed past the $150 per square foot mark. That benchmark, coupled with 4th and Gillâ’s resistance to new rental units in the neighborhood, put would-be Brownlow developers in a bind. Previously, the upper end for fully restored properties in 4th and Gillâ"freestanding homes, too, not condosâ"came in at about $125 per square foot. And as far as Iâ’m aware, only one or two houses crossed the $120 threshold, with most sales hovering just above $100 per square foot. So, while the $122 to $196 per square foot prices Brownlowâ’s condos came in might not seem too impressive compared to downtown, the supposedly disappointing auction results have pushed 4th and Gillâ’s price ceiling up by a considerable marginâ"almost 57 percent by my back-of-the-envelope calculations. Sure, those 13 sales may not be enough to move the project forward, but the prices people were willing to pay for them is still welcome news for anyone else looking to sell a house in the neighborhood.
The same goes for the two George Barber-designed homes in Parkridge, recently sold by Knox Heritage. Lavishly restored with funding from HGTV and The National Trustâ’s Restore America initiative, both homes were listed for sale at just over $100 a square foot, which worked out to $224,900 for the larger of the two. Those figures might seem a bargain for 4th and Gill, but theyâ’re an almost 20 percent jump in Parkridgeâ’s previous price per square foot record and include the first listing Iâ’m aware of over the $200,000 mark. Even more remarkable, barely a week after being open for the neighborhoodâ’s annual home tour, both houses are currently under contractâ"and each contract is a full-price offer. Not bad for a neighborhood where prices have mostly hovered around the $60-$70 per square foot range. Makes me wish weâ’d held onto our own house in the neighborhood for a few more years (it sold in 2005 for a mere $57 a square foot).
Even more impressive is the larger context these sales occurred in. News about the nationâ’s housing market isnâ’t exactly positive. Prices are slipping in many places, and homes are sitting unsold while lenders are less anxious to make loans. Sure, much of the bubble bypassed Knoxville in the first place, but Iâ’ve always been surprised how quickly into downtownâ’s high-profile residential boom some people started circling, predicting the inevitable bust. However, as the still-climbing numbers in the neighborhoods around downtown demonstrate, rather than imploding, downtownâ’s residential resurgence continues to ripple outward.
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