Is history repeating itself?

Rapid price increases will not last forever.

The current growth in home prices is echoing the lead-up to the recession.  Is history repeating itself?

 

The answer is likely not, according to a recently released realtor.com® report.  Building is lacking in many markets—one hallmark 10 years ago was over-construction—and credit standards are more stringent, says Danielle Hale, chief economist of realtor.com.

“As we compare today’s market dynamics to those of a decade ago, it’s important to remember rising prices didn’t cause the housing crash,” Hale says.  It was rising prices stoked by subprime and low documentation mortgages, as well as people looking for short-term gains—versus today’s truer market vitality—that created the environment for the crash.”

In 2016, home prices (the national median home sales price) were 2 percent higher than they were in 2006, the report reveals. Pre-recession prices have returned in 31 of the 50 largest metropolitan areas.

In contrast with 2006, however, are today’s credit conditions. Currently, the median FICO score for a mortgage is 734; the median in 2006 was 700.

Builds and flips are also different from 2006—starkly.  The credit environment, among other factors, is keeping a lid on unfettered flipping and over-construction.  In 2006, one household formation generally equaled 1.4 single-family housing starts; in 2016, that number shrank to 0.7 single-family starts.  Flips accounted for 5 percent of sales in 2016; in 2006, they comprised 8.6 percent.

“Lending standards are critical to the health of the market,” says Hale.  “Unlike today, the boom’s under-regulated lending environment allowed borrowing beyond repayable amounts and atypical mortgage products, which pushed up home prices without the backing of income and equity.”

Additionally, economic indicators point elsewhere.  Employment was healthy then and is now, but inventory is limited more today—at a 20-year low.  Presently, the average months supply is 4.2; in 2007, the average months supply was 6.4.

 

Featured Listings:   Price Reductions

Beautiful one level brick 3 BD/2 BA complete w/incredible views of the Smokies & of a beautiful pond adj. to this property.  More info
————————————————————————————————————————————————————-

$458,800   ID#: 212271
Resting atop 1.49 beautiful acres you’ll discover an architectural gem of 5000+ sq ft, 4 BD / 3 BA.   Views of Mt. LeConte & Clingman’s dome.  More info

National Real Estate Market

Prices are up, homes selling faster, new listings slightly up

Autumn began in September, but activity in the housing market remained at summer-like levels through October, according to realtor.com’s latest data preview. Prices in October were 10 percent higher than those one year ago, with the national median at $275,000 and the national median age of inventory at 73 days.

“This month we aren’t just experiencing still-summery weather—we’re also seeing a sizzlingly competitive housing market at a time when things are usually cooling off for the fall,” says Danielle Hale, chief economist at realtor.com. “With not enough homes on the market to meet the high demand, homes are selling 8 percent more quickly than a year ago even though prices are as high as they’ve ever been.

“For potential buyers who waited until fall hoping to score a bargain, the pickings are disappointingly slim,” Hale says, “but one potential bright spot for market-fatigued buyers is that new listings are up slightly from one year ago. While new listings declined in the first four months of the year, they have increased on a year-over-year basis in five of the last six months.”

Would you ever buy a haunted home?

A new survey from Realtor.com shows most folks won’t shy away from a spooky space–so long as the price is right.

In September, Realtor.com surveyed more than 1,000 online respondents. The verdict? Thirty-three percent were open to living in a haunted house, 25 percent might be, and 42 percent are not open to the idea.

What factors impacted these results? Let’s explore:

  • 40 percent of respondents indicated that they need a price reduction in order to choose a haunted home over a non-haunted home;
  • 35 percent require a better neighborhood;
  • 32 percent need larger square footage;
  • and 29 percent would do so if more bedrooms are involved.

Who minds a few spooky spirits if there’s a third bedroom?   From the survey, 47 percent of participants indicate they would live in a home where someone died, 27 percent said they might, and 26 percent said they would not.

The survey also showed certain paranormal activities are preferred over others. Forty-eight percent of those surveyed didn’t mind a few cold or hot spots in their home, whereas 45 percent could get down with unexplained noises, and 39 percent are willing to tolerate strange, freaky feelings in certain rooms. Thirty-five percent of folks could deal with shifting shadows, but only twenty percent were alright with levitating objects or the sensation of being touched.

Of those surveyed, 28 percent believed they already have lived in a haunted house, with 14 percent unsure and 58 percent quite sure they’ve never been haunted.

 

Featured Listing:

This lot was issued a 5 bedroom septic permit, which is increasingly rare. Great opportunity to build a 5 bedroom vacation rental cabin.   Located in very desirable Pinnacle Vista subdivision in Pittman Center.

Don’t miss OktOBERfest!

                Enjoy Oktoberfest in Ober, Gatlinburg though Oct. 29th

OktOBERfest is being celebrated with Gatlinburg-style roots of merrymaking from September 22 through October 29th.  Ober Gatlinburg Ski Resort commemorates the 207th anniversary of the popular festival held in Munich, Germany.

One of the highlights of OktOBERfest is the food.  Most of the food is German inspired and is derived from recipes and cuisine from traditional Bavarian festivals.  Cuisine includes but is not limited to schnitzel, bratwurst, strudel, turkey legs, pretzels and sauerkraut.  During this month-long celebration, along with multiple daily shows, the Seasons Of Ober Restaurant switches to their OktOBERfest menu.  Special Oktoberfest Biers will be served including several local favorites.  If German food isn’t for you, there are other eateries on site that will offer meals suited to your taste and overall budget.

And, of course, along with great memories, you’ll want to take home souvenirs of this month-long celebration. They have a wide variety of OktOBERfest  souvenir apparel, gifts and accessories available in the outdoor vendor tent.  Inside the mall, you’ll also want to check out the retail shops… most especially the unique and specific  Beer Necessities kiosk,  which provides an eclectic selection of gifts and accessories for the true beer aficionado.

Enjoy the Bier Garten!
An Outdoor Bier Garten is open for beer sampling for festival-goers who are 21 and over. Different featured breweries will be included each weekend, with a company representative from each of these present on Saturdays.

 

Along with the authentic German cuisine and beer, you can also look forward to outdoor games and the Bavarian Fun Makers Oompah Band.  The band dresses in authentic lederhosen while performing traditional Bavarian folk dances, oompah music, sing-a-longs, yodels, and more!

 

Featured Listings

Three Charmers Near Ober:

Beautifully crafted 2 BD/1.5 BA, 1,400+ sq ft, mountain chalet.  Ideally suited as a permanent or 2nd home, or as an overnight rental.   More Info

2220 St. Moritz Court , Gatlinburg, TN 37738   $219,900  ID#: 211874

1 BD/2 BA, 1,350+ sq ft, contemporary-style mountain chalet. Spectacular mountain & city views.  Currently on a well-established rental program.  More Info

 1536 Zurich Road   Gatlinburg, TN 37738
$215,000     ID#: 208705
3 BD/2 BA, 1,600+ sq ft mountain chalet with amazing mountain & city views.  Ideal as a permanent or 2nd home, or as an overnight rental.   More info

 

Outdoor fun this weekend in the Smokies

Kick up your heels!

Sugarlands MountainFest, a music and outdoor festival (September 28 – October 1, 2017) produced by Sugarlands Distilling Company, is a spirited celebration of the great outdoors. For four days this fall, outdoor enthusiasts will gather to enjoy over 30 live musical performances, running, biking, & fishing competitions, craft cocktails, award-winning spirits and brews—all in the breathtaking mountains of East Tennessee.

Experience the world class attractions and shopping of downtown Gatlinburg, Tennessee.  Enjoy the natural splendor of the Great Smoky Mountains.

Featured Properties:

5000+ sq ft, 4 Bedrooms & 3 Baths.   Views of the mountains, convenient location. Lovely home. 1.49 acres includes another lot.  What more can you ask for?  More Info
304 Village Way  Pigeon Forge, TN 37863
$265,000  ID# 212285

4 BD/3 BA, 2,200+ sq ft, mountain chalet. Currently a well-established VRBO rental.  Walking distance to shopping and dining.    More info

College debt affecting housing market

College debt is having a compounding effect on how millennials perceive and plan for home ownership.

Eighty-three percent of millennials in a recently released report by the National Association of REALTORS® (NAR) say they are delaying their home-buying plans by a median seven years as a result of their student loan debt. Twenty percent of the millennials surveyed in the study are homeowners; 80 percent are not. The typical millennial homeowner is burdened by $41,200 in student debt, and earning $38,800 annually.

Home ownership is not the only casualty of student debt—millennials are also postponing career changes, children, marriage and retirement savings, the study shows.

“The tens of thousands of dollars many millennials needed to borrow to earn a college degree have come at a financial and emotional cost that’s influencing millennials’ housing choices and other major life decisions,” says Lawrence Yun, chief economist at NAR. “Sales to first-time buyers have been underwhelming for several years now, and this survey indicates student debt is a big part of the blame. Even a large majority of older millennials and those with higher incomes say they’re being forced to delay home ownership because they can’t save for a down payment and don’t feel financially secure enough to buy.

“A scenario where only those with minimal or no student debt can afford to buy a home and save for retirement is not an ideal situation and is one that weakens the economy and contributes to widening inequality,” Yun says.

Millennial homeowners are doubly pressured, unable to sell and trade-up due to their student debt. At the entry level, the inability to move keeps valuable inventory off-market, worsening already scarce supply in the tier.
“Millennial homeowners who can’t afford to trade up because of their student debt end up staying put, which slows the turnover in the housing market and exacerbates the low supply levels and affordability pressures for those trying to buy their first home,” says Yun.
Combating the issue comes down to education. Many millennials are in the dark about college costs—in fact, the study shows only 20 percent have a big-picture understanding of the expenses related to education.

“REALTORS® are actively working with consumers and policy leaders to address the growing burden student debt is having on home ownership,” says NAR President Bill Brown. “We support efforts that promote education and simplify the student borrowing process, as well as underwriting measures that make it easier for home buyers carrying student loan debt to qualify for a mortgage.”

The study was conducted in conjunction with American Student Assistance (ASA), a non-profit guarantor.
“Student debt is a reality for the majority of students attending colleges and universities across our country,” says Jean Eddy, president and CEO of ASA. “We cannot allow educational debt to hold back whole generations from the financial milestones that underpin the American Dream, like home ownership. The results of this study reinforce the need for solutions that both reduce education debt levels for future students, and enable current borrowers to make that debt manageable, so they don’t have to put the rest of their financial goals on hold.”

 

Featured Listings, Price Reductions:

 

1224 Sky High Way  Gatlinburg, TN
$249,900   ID#: 210698

2 BD/2BA, 1,300+ sq ft mountain chalet, complete w/incredible views of Mt. LeConte, downtown Gatlinburg, ski resort & the Smokies.  Currently on a well-managed rental program.  More info

 

936 Stans Road   Gatlinburg, TN 37738
$249,900   ID#: 210699

Well-located, 2 BD/2 BA, 1,500+ sq ft mountain chalet,  currently on a well-established rental program. Amazing views of the Smokies & the City of Gatlinburg.  More info

 

Fall into the Smokies!

Fall Events in Gatlinburg:

Looking for things to do in Gatlinburg? The Gatlinburg fall calendar of events is jam-packed with seasonal Gatlinburg TN attractions that you won’t want to miss this fall.

 

Event Name: Gatlinburg Craftsmen’s Fair
Date(s): October 8 – 25
Season: Fall
Category: Arts, Entertainment
Description: More than 200 booths featuring some of the nation’s finest work. Artists demonstrating on site, selling art. Live music.
Location: Gatlinburg Convention Center
Website/Link: http://www.craftsmenfair.com
Admission: $5.00

Event Name: Smoky Mountain Harvest Festival
Date(s): September 18 – October 31
Season: Fall
Category: Arts, Entertainment, History
Description: Fall decorations, old fashioned hayrides, events, entertainment, and local craft exhibits.
Location: throughout Gatlinburg
Admission: FREE

Event Name: Fall Foliage in the Smokies
Date(s): September 15 – November 15
Season: Fall
Category: Entertainment
Description: The notion that peak color season in Great Smoky Mountains National Park happens in mid-October is a misconception. The marvelous colors of autumn actually light up the Smokies for seven weeks or more as the peak elevations move down the mountainsides from the highest elevations to the foothills.
Location: Great Smoky Mountains National Park
Website/Link: http://www.gatlinburg.com/
Admission: Yes

Event Name: Winter Magic Kickoff & Chili Cookoff
Date(s): November 4
Season: Fall
Category: Entertainment, Fundraiser, Food
Description: Gatlinburg lights up the city with millions of winter lights, an award winning chili contest and live entertainment. Come join us!
Location: Downtown Gatlinburg
Admission:  Yes

 

Beautiful and affordable lots in prestigious Pinnacle Vista:
Pinnacle Vista subdivision in Pittman Center among $1,000,000+ cabins

 

714 Pinnacle Vista Lot 28  Gatlinburg     $35,000   ID# 206795

5 bedroom septic permit, which is increasingly rare.  Great opportunity to build a High income vacation rental cabin.  1.94 Acres.

 

 

Lot 27 Pinnacle Vista Rd.  Gatlinburg,    $39,900  ID# 206353

Great area for rental, second or permanent home site. Easy access with paved through the development.  No HOA fees.  1.9 Acres.

 

 

 

Lot 90 Pinnacle Vista Rd.  Gatlinburg  $ 29,900  ID # 206361

3.19 Acres.  Close in proximity to Greenbrier entrance for the Great Smoky Mtn. National Park and only about 10 mi. to dwtn. Gatlinburg.

 

The Great Smoky Mountains real estate market sees steady growth

 

 

Featured Properties:

1536 Zurich Gatlinburg, TN

$215,000 ID# 208705

Well-located, 3 BD/2 BA, 1,600+ sq ft mtn. chalet w/amazing mtn. & City views, located only mins. to dwtn. Gatlinburg. Ideal as a permanent or 2nd home, or as an overnight rental – has great potential as a rental.

 

 

1155 Upper Alpine Way Unit 802  Gatlinburg, TN   

  $130,000   ID#: 212013

High quality, 2 BD/2 BA, nearly 1,100 sq ft condo, made of solid, masonry construction. Great location inside the city limits of Gatlinburg, & only about a mile from Over Gatlinburg Ski resort.

Will home prices reverse course?

It seems unlikely, however there may be some good news:

Home prices increased in the latest S&P CoreLogic Case-Shiller Indices, up 5.8 percent year-over-year in June, compared to 5.7 percent in May.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index’s 10-City Composite rose 4.9 percent year-over-year, down from 5.0 percent in May, while its 20-City Composite rose 5.7 percent year-over-year, identical to May. Month-over-month, the 10-City Composite and the 20-City Composite both rose 0.7 percent.

Of the 20 cities analyzed for the Index, Dallas, Texas, Portland, Ore., and Seattle, Wash., came out on top, with prices up 7.7 percent year-over-year in Dallas, 8.2 percent in Portland and 13.4 percent in Seattle.

“The trend of increasing home prices is continuing,” says David M. Blitzer, chairman of the Index Committee and managing director at S&P Dow Jones Indices. “Price increases are supported by a tight housing market. Both the number of homes for sale and the number of days a house is on the market have declined for four to five years.

“Currently the months supply of existing homes for sale is low, at 4.2 months,” Blitzer says. “In addition, housing starts remain below their pre-financial crisis peak as new-home sales have not recovered as fast as existing-home sales.

“Rising prices are the principal factor driving affordability down,” says Blitzer. “However, other drivers of affordability are more favorable: the national unemployment rate is down, and the number of jobs created continues to grow at a robust pace, rising to close to 200,000 per month. Wages and salaries are increasing, maintaining a growth rate a bit ahead of inflation. Mortgage rates, up slightly since the end of 2016, are under 4 percent. Given current economic conditions and the tight housing market, an immediate reversal in home price trends appears unlikely.”

Featured Properties:

2924 Nuns Cove Rd. Sevierville  $495,000  ID#: 211855 

Amazing, private, 4 BD/3 BA, 2,200+ sq ft, well-kept chalet, located in the New Center area on 76 acres, minutes to dwntn. Sevierville.  Ideal as a permanent or 2nd home, or overnight rental.   Read more

 
 .
 .

2220 St. Moritz  Gatlinburg   $219,900    ID#: 211874

1 BD/2 BA, 1,350+ sq ft, This cozy chalet has incredible views of the Smokies, Gatlinburg, and the Ober Ski Resort Tramway, from the large deck of this home, allowing for perfect enjoyment of the area at its finest. Read More