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(upbeat music) - Hi, I'm Michelle Price.

Welcome to WCTE's "INTERACT."

This month we're talking about housing, and joining me is Donnita Hill, longtime Upper Cumberland Realtor with EXIT Realty, Luke Eldridge, who is a facilitator with Empower, a new program in the Upper Cumberland, Patty Seagrave with Seagrave Mortgage, and Chris Cassidy, Director of Operations with Highlands Residential.

So Donnita, can you tell me a little bit about the residential real estate market?

- Oh yes, I'd love to.

Of course, this has been a most unusual several months for real estate in the Upper Cumberland.

We've experienced over-bids, multiple bids at one time.

The demand has been exceptionally probably unexpected.

And then currently, we still have good demand.

We just have a little bit of a low inventory, which we're hoping that that will improve.

But it's still, we're still good in the Upper Cumberland.

- So talks of a real estate bubble aren't coming to effect in the Upper Cumberland?

- Well, we do hear that a lot.

Of course, no one really has an exact answer on that.

But how I feel and what I see is that I don't think we're in a bubble.

I think, as my dear friend in Jackson, Tennessee said it probably as well as anyone, she's been in real estate for probably close to my time, 40 years, is that she said, "You know, what it really comes down to is a little bit of unhealthy home sales," and the prices have been much higher than people anticipated with all of the growth coming our direction from a lot of the larger metropolitan areas.

I think probably that with the inventory being down, hopefully that will improve with time.

It's been a learning curve for a lot of people.

- The residential apartment business has been crazy too, hasn't it?

- Well, it is.

We've really been in a shortage.

Even before we had the tornado two years ago, we were in a shortage here in the Upper Cumberland County particularly.

And the tornado of course, you know, basically took out 400 living units, both houses and apartments, and I think that made that shortage even greater.

But you know, I've said for the last year and a half, two years, if we had 200 more apartments built tomorrow, I'd have 'em rented as soon as I had 'em built, and I'm not even sure that number's high enough.

We really do have an issue, and it's not even low income.

It's working families.

And you know, workforce housing is a term the city uses occasionally when we talk, and that's a huge problem, and I think it's gonna continue to be a huge problem, because Donnita said it, well, people are moving here.

You know, this is becoming a place where people live here and work in Nashville, unbelievably enough, so it's not gonna go away anytime soon.

- And I do think also since the pandemic that we had, a lot of people are working from home now.

So that focus back into your interest in having a home with multiple home offices has occurred, and we're seeing a lot of people working from their home now.

- And that has allowed a lot more people to move to this area that maybe before would not have, because their jobs do allow them to work from home.

- Yeah, I have two friends who actually, one worked in Oak Ridge, and another one, he worked, well, he worked at a local place here, but they've got jobs with other big companies like Bayer Aspirin, and stuff like that.

They can work from home, and they're making more money, so they've come home and staying there, and their wives have been able to come home.

So, you know, you're absolutely right.

I hadn't even really thought about that until just then, but that is one of the things that now people can work in Nashville but work from home.

Another friend of mine just got the same job offer, another one getting to go to Oak Ridge, and stays here, has to go to Oak Ridge one time, everything else is at home, so he gets to stay home.

- Luke, aren't you working with a program that is helping to pull people up out of poverty, and help them get into the housing market?

- It's called Empower.

We just received a 25 million grant, and now, that is for people who are in, they're housed right now, but they're on that line of they're needing help with rent on a pretty consistent basis.

What we're gonna do with this starting in January is we're going to start working with families to help them find the better jobs to be able to come out of that poverty arrangement.

And then what they can do is then hopefully go to these ladies and look for a house, and get out of the apartment so we can open up more apartment places so people can, we can start kind of funneling, in a sense, them through.

So we hope to do that, because a lot of the government programs, as you know, if you're on 'em, and you try to get off of 'em, it's more of a cut than it is a tip for tat movement.

We have families who are trying to get into apartments or housing, but they have to look at low income housing, or they have to look at government assistance housing because that's just, they don't make enough.

But if they try to go make more, then they're gonna cut their food stamps, they're gonna cut this, they're gonna cut daycare, they're gonna cut Families First.

They're gonna cut those funding options that they can get into, so our job, and what we're gonna try to do is tip for tat, kind of help them out, climb out of that hole, and then hopefully they can be more sustainable.

I think one of the numbers is if we can help them through this process, they're gonna be making somewhere 10, 15,000 more dollars once we help them out of that kind of, out of that bubble or out of that hole, if you will, 'cause we're gonna be able to navigate them through, and not just cut all their governmental assistance off like the government has.

- So Patty, do these people have to save a big down payment to be able to get financing to buy a house?

- They do not.

I think that's one of the biggest misconceptions, because a lot of people still believe you need 20% down to buy a house, and particularly in this area, we have a lot of 100% programs out there.

What is so great about this area, we have people who work, they have good jobs, they have good credit, they just can't save for a down payment.

And so we can work with them with no down payment, and help them get into housing.

And so that is great, and that is available in almost our entire or Cumberland area for 100% financing.

- Chris, aren't you all building additional housing for families?

- We are, we've currently started a 48 unit development that is a multifamily development.

It is for working families, workforce housing.

And we have a master plan where we're hoping to build another 150 or 200 units in the next few years.

We have to find the funding to do that, but there are some programs out there.

Hopefully we're gonna continue to see hammers and nails and two by fours for the next few years, and help alleviate some of this problem.

- What are you seeing in the real estate market now, in the people looking?

Are they looking primarily for what we used to consider the starter homes, or I know over the last few months, even the luxury home market has slowed down a little.

Are they going to that mid range?

- Well, what I see that's happening, first time home buyers, yes, are trying to get out of the rental into something that they can own, and then have appreciation build up.

Of course, there's always a need for families as they grow to look for a, you know, a larger home.

That certainly is occurring, and again, some of the luxury homes are still selling fairly strongly because of our out of state activity, as we mentioned, folks moving to a better area, family area, climate, less crime, that sort of thing.

So we still see some of the larger homes getting some pretty good activity.

A lot of retired people are moving to the Upper Cumberland.

They've done their research, perhaps have had family friends to move here, and they've had them to encourage them, because they've lived here long enough to see what a quality community is.

It's the people in the Upper Cumberland that makes such an impression on all these people.

- We're too nice, Donnita, that's what.

Yeah, it's that we're too nice.

- We wanna help, and we care.

I'm telling you, some of these folks come in from the larger town, you can't really speak to people hardly, they say.

And I was with a couple as we walked in Cracker Barrel about three or four months ago, and this gentleman held the door open, and he looked at me and he said, "My goodness, we would never see this happen in New York."

And I said, "I'm telling you, it's God's country."

- Southern hospitality.

- Yeah, I think the very nature of what makes us appealing, the small town feel, unfortunately are the things that we're maybe losing a little bit because we're so appealing.

- Right, absolutely.

- But we still have a lot of affordable housing here compared, even though we've seen such appreciation.

Compared to other parts of the country, our housing is still very affordable per square foot here compared to New York or California, and so that's why we're seeing a lot of people move in as well because they look at our prices and say, "Wow, we could not buy this beautiful house for this price."

It would be double elsewhere.

- They're wanting to get away from those cities 'cause of everything that is going on.

- Exactly.

- The cost of living.

- And Tennessee is very- - They've discovered us.

- And the climate, and I think that's why we saw a large amount of overbidding, because what they sold in some of the larger areas was as much as twice or more, and they didn't mind giving an extra whatever that number ended up being.

- Is it just me, or does this area not seem to be affected as much by fluctuations as some of the bigger areas like California, New York, out West?

- Yeah, we've always had more of a sheltered proximity to that sort of thing, and people recognize that, because the demand comes from so many parts of the world for people to find a good reason to move to Middle Tennessee, and they jump at the chance in most cases.

- What would you advise somebody if they were trying to sell their house?

- A good experienced realtor, a good realtor, sit down with them, and see where you are with the pricing on your home, and then know what you expect to find.

I know of so many people that have sold their homes in '22, and ended up having to rent because they couldn't find the square footage they need or the location they needed for what they sold.

Everything goes back to education.

If you just know ahead of time what to expect, that helps, you know, the transaction so much.

- And I think it's very important they get pre-qualified before they have their home under contract to make sure that they can buy what it is that they're wanting to purchase, and have the payment where they want it to be.

I think that's very important as well for them to think about, so it kind of works hand in hand.

- For our young people that are like, you know, graduating high school, graduating college, and looking at moving out, don't they even need to look at getting on a waiting list for stuff like, you know, housing with you, Chris?

- Absolutely, be prepared.

It's gonna take some time, and if you think you're just gonna do this kind of on a whim and all at once, I'm afraid you're gonna be disappointed.

- The individuals I work with, you know, normally are making $15 an hour, a little lower or a little higher, but we're filling out applications, and housing like that's three months, six months out to try to get into apartments through either some kind of governmental grant or even I tell clients, I tell people, "Look, the big thing is you need to go find a job that's at least making $15 an hour to rent a one bedroom."

'Cause most one bedrooms are going for seven, eight, $900.

And so I'm like, "You guys gotta make sure that you're making that kind of money."

- Everything seems to be going up.

- Oh, yes.

- And to buy your first home and then to deal with the grocery prices, the gasoline prices, everything seems to be higher, so you have to put that equation into your purchase in order that, you know, you can buy a home, but you also have to be able to, you know, pay your bills.

- I think one study I saw said that this inflation and everything that's going on is costing the average family or person in the average family household three to 400 more dollars a month.

- Yeah, I'd say it is.

- And I think because of that, you know, we've had rates tick up, and Patty can talk about this better than I can.

- I've heard that somewhere, something about that.

(all chuckling) - You know, rates are still historically low.

You know, I'm not young anymore, and when my wife and I bought our first house and we had an eight and a half percent mortgage, and I thought that was the greatest thing in the world, and these two, 3% mortgages we've seen in the last, I don't know, Patty, eight or 10 years, you know, people don't realize a 5% mortgage is still, and I don't think that's the problem.

I think what Donnita said is right.

It's inflation in general.

It's the cost of everything else.

It's not whether they can or can't make a payment at 5% versus three and a half percent.

It's everything else that goes with it.

- How is having the shortage of the tradespeople affecting housing and new housing construction?

- As you know, I was at a home earlier in the week under construction.

The projection was it to be finished in November.

Well, now they're running behind, because some of the folks are not keeping a scheduled timeframe to get in to get it accomplished.

So now it's out to the end of the year.

So it really is affecting for people trying to still buy at a certain interest rate, and while things are are working for them.

- I know particularly with the new school that the county's getting ready to build, getting ready to start that's been in the paper several times, but they only had one bidder.

They only had one bidder because that was the only company that could guarantee their subs, that could guarantee their electricians and their plumbers and their HVAC.

The development that we've just started, the subs have been lined up for a year, you know, and it's like, okay, we can start that, but we can't start that until next fall.

And you know, so it is, I would hate to be trying to build a house for myself right now.

- I spoke to one of the developers of one of the larger subdivisions here in town a couple of months ago, and he said that he was having to bring all of his subcontractors from Nashville because all the ones in the Upper Cumberland were so busy.

- Which again increases your prices.

- It does, absolutely.

And builders are afraid to price the homes until they're at the very last, you know, 30 day period of time, or at least on the front end, they have to add in a certain percentage for all of the surprises they have, and they can put the price out there.

If it has to adjust, we have to make sure that is adjusted where people knows that, you know, the product's gone up.

They can't sell it at that price, because you know, it's all about everyone has to have a little bit of a profit margin, you know?

- And that's never happened before, has it?

- Never, has not.

- What are the price of building materials doing?

I mean, they've been going up and up.

Is there any, especially with the hurricane just having such an impact on the building industry?

- And you know, when we unfortunately had the tornado here a couple of years ago, you saw the prices just jump.

Any of the natural disasters certainly is going to cause that, but a lot of the folks such as Lowe's and the other building material, they can't get a certain amount of whatever's needed for job sites.

And that's where people are having to have a delay on a completion date, and that affects everybody's ability either to buy or fit to be, you know, certainly under a contract.

- And I remember, so when we bought our home in 2020, July of 2020, we got it right before everything.

Hurricane Michael came through not too much longer after that, and I was remodeling our house.

We lived in it as I remodeled it.

And I just remember Lowe's would say, "Man, you better buy what you need now, because every day it's just, it's going up $4, $3."

It just kept going 'cause of what Michael did, and I'm not sure what it is doing with this new, this other hurricane that just went through, but I just remember a piece of wood I was getting was 14 bucks.

I went back a week later, and it was like 23 or 25, and I was like, "Man, I should have bought it all."

But yeah, it's insane what the hurricane has done, what the tornado, and just these last couple years have not been favorable for what we're trying.

- I think it's interesting in the last couple of years, and I think some of this has gotten better, but literally the Oaktree Towers, the 50 unit mid-rise that we completed earlier this year, as we were getting to the point that we were getting towards finishing up, and the city doesn't have 50 gas meters or 50 electric meters to bring to us.

"Hey, we'll bring you 20 today, and we're hoping to get in some more in a couple of weeks."

You know, I know from talking again to cities and towns, okay, I've got a list of 50 people that are ready for their gas service.

I've got 10 meters over here, I gotta decide who we're installing gas for right now.

And we've just never gone through things like that.

And again I think that's gotten some better, but if that pushed back construction six months ago, well, now it's still pushing back, we've not caught up from all that yet.

- No, we certainly do have a shortage of new construction, that's for sure.

- That has to be impacting the current existing homes in bringing those prices up, doesn't it?

- Oh, it does, it does, and as I said earlier, I mean, nobody was actually prepared to see this happen, but it has caused the pricing of your average home to really escalate, and then as you go into the larger homes, it's even caused a greater amount of value being added.

- Seems like a lot of people though are moving back to the downtown living.

You know, we've got some of the mixed use retail and residential housing complexes now like in Cookeville, and there's plans for I think close to 180 new townhomes just right downtown.

Are you seeing a lot of people wanting to be more in the city center?

- Well, a lot of folks that wanna be around the activity, the hustle and bustle that have maybe gotten used to that and still want that will oftentimes ask about downtown living.

Obviously, the convenience plays a whole lot of interest in that for people if you can just walk to about wherever you need, the activity, the physical activity, and plus, you know, it's an enjoyment to be able to do that.

- As our economy changes, I'm also having more people say we really want to live, I spoke with a lady yesterday, she goes, "I want a couple of acres.

I wanna be able to grow a garden, and I wanna be able to can," so I think there's the other extreme there of people who don't want to live right downtown.

They still, they want to go back to what we may consider more the old fashioned way of living there, and have chickens or whatever.

- Live off the land, that's true.

Luke, are a lot of the people that you deal with looking to buy soon, or are they looking more, is that a long term goal for them?

- So that's more of a long term, 'cause most of the people I work with, obviously, they're still in that emergency mode, right?

They're in that trying to figure out month to month, because they're on that fine line of poverty, could become homeless or are homeless, so it's all emergency right now.

And so they're thinking just, "Where can I be next?"

And so we are trying to say, "If we can get you here, then we can give you all these other resources to get you to here," and so most of the ones I work with are just emergency right now.

Now, the dream is they, yeah, they would love to own a home, 'cause they have children, and so they want that, but what can I get right now to just take some pressure off of me?

And so that's what we're trying to work with, and then hopefully get 'em to a place where they can get into some of these programs to where they can get the home, either, whether it may be a Habitat.

We may have to go Habitat, or we may be able to come and get a little starter home or something like that, and hopefully we can do that because of the pay increase and what we're gonna be able to do to get 'em out of that poverty bubble and pull 'em out of that.

- We've talked a lot about, you know, young families and younger people moving in, but what about housing for the elderly?

Are they getting kind of pushed out of the market?

- Well, I have said for a long time now that our area needs some senior living development, because we have folks moving here that have already lived perhaps in one where they're coming from or have family bringing them here, but they don't wanna live in their home.

They want have their own.

We need that badly, and I've already talked to several folks in the building industry.

I said, "I will tell you they will sell like hot cakes.

There will be a waiting list if you'll put it up."

There's a old saying to build it and they will come.

I tell you, there's already people asking for this, and have been for a long time now.

- And I think when you get to the elderly particularly, you know, there's other services that they may need.

And from a rental standpoint, I think many times what owners shy away from is they don't care to build an apartment, they don't care to run an apartment.

That's kind of their expertise, and they're good with doing that, but you start talking about these supportive services, home health, or maybe meals, and they're like, "Well, that's getting outta my comfort house, and what I know how to do."

And so I agree with Donnita completely.

We need some senior living complexes, maybe not even at an assisted living level, but we definitely need a place where elderly people can live but get some of these supportive services.

- Well, probably most of that would probably have to be income based, because I'm starting to see a lot of elderly call and say, "My rent's went up.

I'm on a fixed income.

I have nowhere to go, I need help."

And so I'll send them to Chris, or I'll send them to the development district for some housing, but there's waiting list on that.

So if we found somebody to fill that gap, that'd be fantastic especially, 'cause most of 'em are, they're retired, or they have a, you know, they're on disability, social security.

And most of the ones I deal with, 800, 900, $1,200 a month is all they get, and then food stamps is $20, you know?

And so that is a big, I think I do see a gap in that, that we would be great to have.

- Do you see any solutions in the future for that?

(all chuckling) So we're gonna go have to help Chris build homes.

- Well, you know, I think that's the interesting thing.

As I said earlier, we could fill up 200 units tomorrow if we had the units built, but the federal government doesn't just give out money anymore or the old public housing things that we've talked about.

Those funds to build new units don't exist, and so we have to be creative.

We get tax credits occasionally that help us.

This 48 unit development we're building now has a tax credit component, but we're not guaranteed with that.

And I will say this, one of the great things, we've had a lot of conversations with the city, we've even had some conversations with the county.

There's some money that has been out and available due to COVID, or due to some other things in the last couple of years that, you know, you've gotta put these partnerships together and these coalitions together sometimes, and you know, maybe it involves the county, maybe it involves the city, maybe it involves the state and some state funds.

And you know, that's, I guess at the end of the day, that's what I've really focused on a lot in the last couple of years.

You know, it's not a simple deal anymore of here's one pot of money and we're building these units.

It's six pots of money to build these units, and that causes more work for our office, but that's okay.

That's what we're there for, but again that's a slow process.

The 50 units that we completed at the first of the year, we had our first meeting about those, and had filled out our first grant application for those in 2017.

- So five years?

- And it was basically four and a half to five years.

- Thank you for joining us this month on "INTERACT" when we were talking about housing.

Please continue talking about this issue with your friends and your neighbors.

It's very important.

I'm gonna keep talking with my friends, Donnita Hill, Luke Eldridge, Patty Seagrave, and Chris Cassidy about this issue.

Join us next month.

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