CLARKSVILLE, TN (CLARKSVILLE NOW) – Carol Herrera rents an apartment Sango for herself and a middle-schooler she takes care of. This year, she was ready to finally become a homeowner.

“I never in a million years dreamed that all of the hard work I put in getting my finances to where I could buy a home was actually here,” Herrera told Clarksville Now.

With all her ducks in a row, she was approved for a loan. She also applied for down payment assistance and a first-time homebuyer’s program. Herrera had rebuilt her credit, leaving just student loans to tackle, and they had been deferred, she said.

Then Clarksville’s housing market exploded.

“Just as soon as it’s listed, somebody’s got a contract out on it,” Herrera said. “Every one of the houses I’ve looked at, they were gone and had a contract on them within 24 hours.”

Seller’s paradise, buyer’s nightmare

Over the last year, the housing market in Montgomery County has become a seller’s paradise, with multiple offers on homes and most coming in over asking price. But for the buyers staring down the upcoming summer moving season, it’s a nightmare with no end in sight.

Christian Black, an agent with Century 21 Platinum Properties and the 2021 president of the Clarksville Association of Realtors, said he has never seen the housing market this hot.

“When I first started in real estate, that was 2004 or 2005, and we had maybe 750 to 800 homes on the market. That was a busy market, but this is just unprecedented,” Black told Clarksville Now.

As of Friday, May 14, only 116 established, single-family houses were on the market, according to Black. There were also 95 new-construction listings, but 42 of those have yet to be built. This brings the total to just 211 homes available for purchase in Montgomery County.

“We’re getting multiple offers on every listing. We had a listing last week that had 40 offers on it,” Black said.

Home prices rising

The median price for a single-family home has jumped considerably. Around this time last year in Montgomery County, the median price was $210,000. Black said this data was based on 1,596 sales.

This year, the median price rose to $237,900, according to Black. That’s a 13% increase and based on 1,773 sales.

Two things Black are contributing to the shortage, and the first is what Black called “Nashville spillover.”

“Nashville’s prices are way more out-of-hand than our prices, so folks end up in Clarksville,” Black said. “I guess people decided it was better to commute and get a more affordable house with more square footage, bigger yard, by coming to Clarksville.”

The second is Tennessee’s lack of a state income tax. He said this is especially true for people retiring or moving from high income tax states such as California, Illinois and New Jersey.

“The offers we have coming in, they’re coming in over full price, the buyers are paying appraisal gap coverage, so if it was $250,000, they’re contracted for $260,000 and then say they’ll pay up to $5,000 on a low appraisal,” Black said.

Lumber prices jump

The housing market shortage problem is compounded by the high price of lumber, which has skyrocketed in the last year, stalling new home construction.

“It’s costing more and more to build the houses, so you might have some builders that kind of lay back on how many they’re building because they’re not making as much profit,” Black said.

Bill Orgain, president of local lumberyard Orgain Building and Supply, said he’s never seen anything like these trends.

“We’re in unprecedented times. I’ve been working down here since the 1970s and I’ve never seen anything like it. (Lumber) prices are four times what they were a year and a half ago,” Orgain said.

The shortages in lumber, and the corresponding price increase, had a lot to do with the COVID-19 pandemic and several natural disasters over the last year.

“During the main COVID outbreak, a lot of the mills had to shut down. They had employees sick, so they had to shut the whole thing down. And then those mills would have to take people from other plants and bring them in. They just couldn’t work at full capacity, and then there were those big hurricanes down in Louisiana and Mississippi that flooded areas and tore up mills,” Orgain said.

Plywood and oriented strand board (OSB) are also in short supply, and are more expensive than ever before.

“So for framing a house, it might be $40,000 more expensive than it might have been a year ago,” Orgain said. “It’s been a perfect storm of disasters and pandemics, and then just the fact that our economy is busting wide open. Everyone is looking for a new house.”

Military moving season

It’s not just civilians in Clarksville staring down this impending housing shortage. It’s also active-duty soldiers stationed at Fort Campbell, which is partially housed in Montgomery County.

Summer is the biggest PCS – or permanent change in station – season for active-duty soldiers and their families. And this season, there will be more soldiers coming to the area than leaving.

According to Bob Jenkins, civilian public affairs officer for Fort Campbell, approximately 2,672 soldiers will PCS into the area, while just 1,500 will PCS out to other installations. This movement will occur from May until the end of August, for a net gain of almost 1,200 soldiers, many with families.

There are about 9,500 homes for soldiers on post, in addition to barracks for single soldiers.

But with the renovations and demolitions announced over the last six month to on-post housing, Jenkins said there is a lot of uncertainty about on-post housing availability in the coming months.

To compound this issue, it’s not just active-duty military who want to live in Clarksville; it’s also military retirees and their families.

“People that retire, they want to be close to the base because they’re still getting their benefits and the VA for medical,” Black said. “I think our temperature and climate is also a factor for retirees in general.”