April 2022 Sevier County, Tennessee Real Estate Market Statistics

April 2022 Sevier County, Tennessee Real Estate Market Statistics

Homes – April Market Report

  • Price per square foot saw a increase back to just above $380 at $384 per square foot for the Month of April, compared to $364 in March. 
  • Average price is $666,328 (compared to $669,725 in January, $753,664 in February, $686,324 in March)
  • Homes spent an average of 61 days on the market, down 12 days, from March at 73 days 
  • 21% more homes sold during April 2022 than in April 2021. 

 

 

Land – April Market Report

  • 73 parcels of land sold during April.
  • Average price for land in April was $126,934, up from $104,694 in March. 

How is Today Different from the Great Recession Housing Bubble?

Feel like you might be noticing some similiarities?

Fortunately, today’s circumstances are driven by very different reasons! 

In 2006, the lending practices were much more lax. Underwriting was more loose and there were different mortgage products such as adjustable-rate mortgages with big balloon payments due at the end of the term. 

“Today it’s really just about lack of supply,” says Robert Dietz, chief economist at the National Association of Home Builders.

There are two main ways homes enter the market and both of them are not in full flow. 

  1. Builders are struggling to catch up. 

Deitz blames the constraints in the market to what he calls the “five Ls”:

  • Labor
  • Lots
  • Lending
  • Lumber and building materials
  • Laws and regulations
  1. Fewer people are selling.Feel like you might be noticing some similiarities?Fortunately, today’s circumstances are driven by very different reasons! 

A survey by Discover Home Loans found 79% of homeowners would rather renovate their homes than move.

There are more buyers deciding that home ownership is for them! 

Part of that is millennials entering the market and part of that is due to the fact that the pandemic has made remote and hybrid work possible for many. 

When will the market slow down?

Experts surveyed by Zillow predicted it’ll be two years before monthly inventory returns to pre-pandemic norms. They estimated it could be 2024 or 2025 before the portion of first-time buyers again reaches the 45% seen in 2019.

Will rising mortgage rates slow demand?

Dietz says. “The bidding wars are going to cool off.”

Any slowdown caused by higher mortgage rates will make the market a little easier for buyers who are patient, Fairweather says. “By end of summer there should be more homes on the market as not as many buyers will be taking them off the market,” she says.

The market could be in for a shift this year as it copes with higher mortgage rates, Fairweather says. You may want to slow down and consider your options. “I don’t think it’s wise to try to rush the market now because right now the market is adjusting,” she says.

What Economists Say about Home Prices in Quarter Two!

Everyone is curious – what will home prices do during quarter two?

Economist can’t predict exactly what will happen to home prices in quarter two.

Luck for us,  MarketWatch rounded up a few of the top economists options for the near future.

Below are a few of their predictions:

Holden Lewis, mortgage expert from NerdWallet says, “Home prices have been rising fast, and we might see a slowdown beginning in April as home buyers cope with skyrocketing mortgage rates.”

 

 

Bankrate analyst, Jeff Ostrowski, says “The shortage of homes means we can expect prices to remain high during the spring home buying season.”

 

 

Lawrence Yun, chief economist for the National Association of Realtors, predicts, “ There’s an acute shortage of inventory and many properties have multiple offers on them, despite higher mortgage rates. Some believe the interest rates will rise even more if they wait and thereby further push up demand. Home price growth on a 12-month basis should be on solid double digit appreciation through the spring months.” 

 

March 2022 Sevier County, Tennessee Real Estate Market Statistics

Sevier County, Tennessee Real Estate Market Statistics for homes and land below.

Homes – March Market Report

  • Price per square foot saw a decrease from $385 in February to March $364.
  • 12 less homes sold during March 2022 than in March 2021.
  • Homes sold for an average of $686,324. (compared to $753,664 in February and $669,725 in January.)
  • Homes spent an average of 73 days on market – flat to March of last year.

Homes - Sevier County real estate market statistics

 

 

Land – March Market Report

  • 101 pieces of land sold during February.
  • Average price for land was $104,694.

 

Land Sevier County Market Report

 

See past month’s market reports here!

Home shortage – here’s why!

The U.S. is more than 3 million homes short of the demand from would-be homebuyers, according to Freddie Mac. 

NPR states, “Pandemic-related supply chain problems aren’t helping. They’re adding tens of thousands of dollars in cost to the typical house. But the roots of the problem go back much further — to the housing bubble collapse in 2008.”

How so?

As homebuilders went out of business during the crash, tradespeople found other work, or got trained for new jobs. 

For more than a decade, building stayed below normal. 

Then the largest generation, millennials, entered the housing market. 

Here we are – millions of homes short. 

How do we rectify the issue?

Emerson Claus, president of the Home Builders and Remodelers Association of Massachusetts, suggests small homes on less land an/or townhomes

Claus discusses a few things standing in the way of allowing this to happen here. 

 

What do rising mortgage rates mean for purchasing power?

What do rising mortgage rates mean for purchasing power? Read below to find out how much rates have increased,  an example how how the rate increase effects the lifetime cost of a mortgage, and and a comparison of previous yearly rates.

 

Mortgage rates jumped above 4% to their highest level since April 2019. Specifically, the 30-year fixed mortgage rate rose to 4.16% from 3.85% the previous week.

 

The National Association of Realtors signaled multiple times before that mortgage rates would rise in response to the Federal Reserve’s strategy of raising short-term interest rates.

 

Although the Federal Reserve doesn’t set up mortgage rates, a higher rate for banks typically makes borrowing more expensive, affecting the 10-year Treasury bond – an indicator for mortgage rates.

 

NAR expects mortgage rates to average around 4.3% at the end of the year.

 

What does this mean for purchasing power?

 

Forbes Advisor provides a clear example of how a 1% rate increase impacts the lifetime cost of a home mortgage loan.

 

Take a family shopping around for a $300,000 30-year, fixed-rate mortgage. If banks were offering them an interest rate of 3.5%, the total lifetime cost of the mortgage would be approximately $485,000, with nearly $185,000 of that accounting for interest charges. Monthly payments would clock in around $1,340.

 

Let’s say the Fed had raised interest rates by 1% before the family got a loan, and the interest rate offered by banks for a $300,000 home mortgage loan rose to 4.5%. Over the 30-year life of the loan, the family would pay a total of more than $547,000, with interest charges accounting for $247,000 of that amount. Their monthly mortgage payment would be approximately $1,520.

 

Even with the rising rates – today’s rates are still favorable

 

Rates around 4% are still fairly low compared to historical figures.

 

Annual averages over the past two decades from the Freddie Mac survey, which follows similar trends to the Bankrate survey used in this article, show that rates remain quite favorable compared to what they were in fairly recent memory.

 

Rates have risen sharply this year but they still are favorable when compared to levels seen in the fairly recent past.

 

Before the 2008 crash, “good” rates were still above 5%, and rates were well above 4% as recently as 2018 and 2019.

 

Sevier County Tennessee Real Estate Market: Predictions from the Pros

In 2021, home prices skyrocketed nearly 19%, according to the S&P CoreLogic Case-Shiller home price index. And pros say we’re in for another year of price growth — but as for how much, pros diverge

Some predict double digit growth.

  • Indeed, a report in January from Zillow noted that home values were expected to grow 16.4% between December 2021 and December 2022.
  • Goldman Sachs, in October, forecast that home prices would rise 16% through 2022.
  • Fannie Mae says home prices will climb 11.2% throughout this year, followed by a more modest increase in 2023.

 

 

Others have more modest predictions:

  • The National Association of Realtors, which surveyed more than 20 top economic and housing experts, predicts housing prices are expected to climb 5.7%  through the end of 2022.
  • Realtor.com predicts a 2.9% increase in 2022. “I believe home price appreciation will normalize in 2022 and home price growth will begin to more closely track inflation,” says Bill Dallas, president of Finance of America Mortgage.
  • As of February 2022, Redfin predicted home-price growth to slow at an annual rate of 7% by the end of 2022.

 

 

Holden Lewis, mortgage expert from NerdWallet, says, “One of the reasons home prices will continue to push upward in the short-term is because mortgage rates are falling temporarily.”

Click to read more predictions from Bill Dallas, president of Finance of America Mortgage, Jeff Ostrowski, analyst at Bankrate and Zillow economist Nicole Bachaud. 

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Search active listings in Sevier County Tennessee here.

February 2022 Sevier County Real Estate Market Report

Homes

  • Price per square foot saw another increase from $329.83 in December 2021 to $364.29 in January 2022, to $385.03 in February.
  • 26 less homes sold during February 2022 than in January 2022.
  • Average Price saw another sizeable increase – Homes sold for an average of  $753,664 compared to $669,725 in January.

 

Land

  • 34 pieces of land sold during February.
  • Average price saw another increase from $144,892 in January to $289,715 in February.

 

2022 Real Estate Trends

If you’re looking for some relief in the crowded and competitive housing market in 2022, these 2022 real estate trends may lend some hope.

 

“With more housing inventory to hit the market, the intense multiple offers will start to ease,” according to Lawrence Yun, the National Association of Realtor’s chief economist. “Home prices will continue to rise but at a slower pace.”

 

Take a look below at the trends Salem News says will affect buying and selling in 2022.

 

1. Mortgage Rates Will Continue Rising

Mortgages rates are predicted to rise to 3.6% by the end of 2022. What does this mean for home-buyers? Assuming rates rise from 3% to 3.6%, a $300,000 loan will cost buyers an extra $100 per month.

 

2. Buyer Demand, Competition Will Decline

Redfin’s chief economist, Daryl Fairweather, sees a shift toward a less frothy market. “2022 will bring more balance to the housing market,” she says. “But don’t expect a buyer’s market; just more selection, less frenzy, and slower price growth.”

 

3. Home Value Appreciation Will Slow

A NAR survey of more than 20 economic and housing experts predicted that annual median home prices would increase by 5.7%, far less than the previous year. NAR chief economist Lawrence Yun, “Slowing price growth will partly be the consequence of interest rate hikes by the Federal Reserve.”

 

4. New Home Construction Will Increase

Mike Fratantoni, the chief economist at the Mortgage Bankers Association, sees the supply shortage starting to ease in 2022, leading to additional inventory hitting the market. “Home-builders will have more success overcoming current building material shortages and should be able to increase the pace of construction to meet the sizable demand for buying,” he said.

This will be an interesting 2022 real estate trend to keep a beat on. According to Random Lengths, lumber prices are now about 22% lower than peak but still about three times their average pre-pandemic price.



5. Investors Will Continue Buying

Danielle Hale, chief economist at Realtor.com, notes homeowners preparing to sell are in a good position going into 2022. Home values are predicted to continue their upward march, albeit at a slower pace.

 

Click here to read the entire Salem News article.

Lumber prices soar!

Up 218% in the past five months to $1,238 per thousand board feet!

Material shortages and lack of skilled labor have caused headaches for remodelers and homebuyers across the country, causing delays in remodeling projects.

Despite these challenges, NAHB reported that remodelers’ sentiment continued to improve, with the NAHB/Royal Building Products Remodeling Market Index (RMI) staying well above the benchmark point of 50.

“Every sub, vendor, and supplier is as busy as they’ve ever been,” Matthew Emmons, president of Emmons Construction in Jenks, said. “I think the concern moving forward is timing for completion and keeping quality at a premium during all the chaos of supply chain issues and labor shortages.”

Click here to read more.