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
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$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

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.

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

 

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

 
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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

Update: Total Solar Eclipse 2017

 

Everything you need to know:
Solar Eclipse Broadcast from our very own, Clingman’s Dome:

The National Park Service in collaboration with NASA, the National Institute of
Aerospace, and Southwest Community College is hosting a staged event to celebrate the 2017 total solar eclipse as it passes over Clingmans Dome in the Great Smoky Mountains National Park. The 4-hour broadcast will explain the science and physics of the eclipse, offer musical sounds of Southern Appalachia, and help viewers create their own stories about this once in a lifetime experience. Join NASA 360 on August 21 as we witness the ecliptic shadow across this majestic landscape from one of the highest points on the east coast.
For more information visit: http://eclipse2017.nasa.gov

ECLIPSE Who? What? When? Where? and How?
Follow the link below to get all of the scoop!
https://eclipse2017.nasa.gov/eclipse-who-what-where-when-and-how

This website is a great one for an interactive map:
https://eclipse2017.nasa.gov/sites/default/files/interactive_map/index.html
Use the zoom feature on the bottom right then click on any spot and a pop up will give you details of duration for that spot.

Don’t have the protective glasses?  All sold out?  How anyone can enjoy the eclipse, simply:

This website has great ideas and instructions on how to make a pinhole box, how to simply use just your hand in a fist (with a tiny hole for light) for a pinhole projector, and how to use binoculars flipped around also projecting the eclipse onto paper or flat surface:
http://www.businessinsider.com/solar-eclipse-pinhole-camera-viewer-instructions-2017-8

When is the next Total Solar Eclipse in the U.S. and where?
The next total solar eclipse will take place on April 8, 2024, and will cross through 13 states (Texas, Oklahoma, Arkansas, Missouri, Illinois, Kentucky, Indiana, Ohio, Pennsylvania, New York, Vermont, New Hampshire and Maine), according to EarthSky.org.

Featured Properties:

New Construction:

2 BD/2.5 BA, 1,400+ sq ft log cabin, currently under construction, located on a relatively level lot that is 1/2+ acre in size, &  just mere mins. to dwtn. Gatlinburg. Ideal as a permanent or 2nd home, or as an overnight rental – has enormous rental potential.   More info

Price Reduction:

1321 N. Baden Circle   Gatlinburg, TN 37738        $159,900     ID#: 209328
Private, cozy, well-located, 2 BD/1.5 BA, log cabin, only minutes from dwtn. Gatlinburg, Ober Gatlinburg Ski Resort. Ideal as a permanent or 2nd home, or as an overnight rental.  This rustic-style log cabin is all on one level in a beautiful wooded setting.   More info

Total Eclipse in the Smokies

Total Eclipse of the Sun in the Smokies!

On August 21, 2017 the western half of Great Smoky Mountains National Park will lie within the path of totality during the first total solar eclipse observed from the continental United States in 38 years. Totality within the park will range from 30 seconds to almost 2 1/2 minutes at some locations.

Planning for the eclipse:

August is typically a busy time of year in the park. The solar eclipse will bring even more visitors to the area, so expect traffic delays, congested parking lots, and the possibility of road closures. Please note that eclipse viewers may need to make special plans to avoid viewing the astronomical event while caught in traffic. Visit the main park web page for alerts and current information.

Where can I see the eclipse in the Smokies?

The entire western half of Great Smoky Mountains National Park will fall under the path of totality for the eclipse, providing opportunities for viewing, weather permitting. The park is currently planning organized public viewing events at three locations in the park: Clingmans Dome; Cades Cove; and Oconaluftee. Visit the Great Smoky Mountains Association page to buy an Eclipse Regional Map.
Clingmans Dome: Clingmans Dome Trailhead parking area will be converted to a special ticketed event site for experiencing the eclipse with the assistance of experts, educational exhibits, and story tellers. The Clingmans Dome tower will be limited to MEDIA ACCESS ONLY, but there are many opportunities for viewing from the parking area and along the 0.5 mile trail to the tower. Tickets for the Clingmans Dome event are sold out. Any cancelled tickets will become available to the public again, so visit recreation.gov regularly to watch for cancellations. You must have a ticket to attend the event at Clingmans Dome. NASA will be streaming live from Clingmans Dome and other locations around the country. Watch the NASA Livestream on August 21. Clingmans Dome Road will be closed on Sunday, August 20th and Monday, August 21st to accommodate the special event. Call 865-436-1585 with questions about the event.
Cades Cove and Oconaluftee: The park is currently planning to host informal staff- guided eclipse viewing sites at Cable Mill (Cades Cove) and Oconaluftee Visitor Center. There will be no charge to participate. Vehicle access to these sites, though, may be closed when parking becomes full or roads become congested.

 

Market Report Sevier County

Let’s take a look at the real estate market. Currently there are 219 sales pending in the market overall, leaving 743 listings still for sale. The resulting pending ratio is 22.8% (219 divided by 962).

The pending ratio indicates the supply & demand of the market. Specifically,  a high ratio means that listings are in demand and quickly going to contract. Alternatively, a low ratio means there are not enough qualified buyers for the existing supply.  Current inventory is described as “mildly active.”

The $150K – $200K price range has a relatively large number of contracts pending sale.

The $200K – $250K price range has a relatively large inventory of properties for sale at 142 listings. The average list price (or asking price) for all properties in this market is $334,531.

A total of 780 contracts have closed in the last 6 months with an average sold price of $232,350.

Breaking it down,  the $150K – $200K price range contains the highest number of sold listings.

 

 

Alternatively, a total of 189 listings have failed to sell in that same period of time. Listings may fail to sell for many reasons such as being  priced too high, having been inadequately marketed, the property was in poor condition, or perhaps the owner had second thoughts about selling at this particular time. The $200K – $250K price range has the highest number of off-market listings at 37 properties.

Featured Properties:

$214,900   ID#: 211383

Spacious, well-located, 3 BD/2 BA contemporary-style mountain chalet, complete w/an attached 2-car carport, fenced back yard, seasonal view, and located only mins. to dwtn. Gatlinburg.  Ideal as a permanent or 2nd home, or even as an overnight rental; currently used as a long-term tenant-rental.  More information

 

426 Trentham Lane   Gatlinburg, TN 37738

$399,900  ID#: 211292

Prime commercial property in the heart of downtown Gatlinburg. Walking distance to shopping, restaurants, attractions, national park, and trolley stop. A corner parcel with access from two streets. Level lot. Current site plan from Trotter and Associates includes 30 Efficiency units, 15 One bedroom units, and 9 two bedroom units with a total 54 units and 66 parking spaces. This would make an excellent hotel, apartment or condo location. Public water, gas and sewer. Over 233 ft of road frontage.  More information