The Daily News Journal reports from Tennessee. "While the high cost of housing may have stalled in other parts of the country, the housing market in Rutherford County continues to flourish in a way that benefits buyers, sellers and home builders for homes in most price ranges up to $300,000, said Bud George, the general manager for Bob Parks Realty."

"Affordable townhouses are the new starter homes for many who can't afford big high-priced houses, yet first-time buyer Amy Childers was looking for more. 'I wanted a yard not a patio,' said Childers."

"Home buyers this year have closed on 5,883 through November at an average price of $172,240, and about 44 percent of them were new houses, according to RealTracs MLS."

"Buyers looking for starter homes are now having to buy townhouses because of the high cost of land and building materials, said Rob Calk, the sales and marketing manager for Ole South Properties in Murfreesboro."

"'We'll close 750 to 800 homes in the year 2006, and 50 percent of those are going to be townhome sales,' said Calk, whose company is building several subdivisions in Rutherford County with townhouses in the $110,000 to $140,000 range. 'That's what we've replaced our affordable houses with — townhomes.'"

"Ole South Properties began the previous decade building single-family starter homes in Evergreen Farms subdivision in west Murfreesboro, and these 1,100-square-foot houses on quarter-acre lots sold for about $70,000, Calk recalled."

"'That same house today is pushing $130,000,' said Calk, noting that those homes are being squeezed on about an eighth of an acre to keep them affordable. 'You have no yard at all.'"

"Not all first-time buyers, though, want high density. 'I've already lived in an apartment, which is not a whole lot different than a condo,' said Childers."

"Home shoppers searching for larger houses here have numerous choices, but this makes it harder on the sellers, a real estate professional said."

"'The problem we've got is we probably have 350 on the market right now,' said Bud George. 'Once you get over $300,000 in general...we've just built many more than we've built before. We've over-supplied the market above $300,000 in Rutherford County.'"

"The remaining houses in that range represent about a one-year supply based on the rate of selling, said George, noting that Realtors consider a sixth-month supply to be a balanced market for both sellers and buyers."

"'Locally, we don't have a bubble. Our sales prices average 96 to 98 percent of list prices. There're lots of opportunities for buyers and sellers in this market,' said real estate agent Joi Sherrill."

"Although real estate professionals remain upbeat, rumors have spread about home builders turning in keys to the bank for unsold $300,000 houses because they can't make payments."

"Those stories are exaggerations, said Tad Craig, board president for the Middle Tennessee Association of Realtors. 'The upper-end market is the only thing that has slowed down,' said Craig. 'A year is longer than they want to see, but it's not the end of the world.'"