cost of living vs property values per year (Knoxville, Kingsport: sales, real estate market)

[sthepoet]

would love to hear what areas of Tennessee's properties are rising the fastest, and is the cost of living keeping up? This is where Laura would be extremely helpfull. Any insight?

[amyevansmom]

I am in Sevierville and just bought a house that has appreciated $10,000 a year since it was built. It's on an acre and the house is 1500 sq. ft. Built in 2002, sold for $125,000. Sold again in 2005 for $150,000. We just bought it for $174,000 and was appraised at $178,000. I've been told by realtors and locals that the housing in Sevier County appreciates very quickly. It seems true w/ the one we purchased, anyway.

[Misty Panda]

Hello, Wow, it seems your property value has increased $24,000 over the past two years where for its first three years it only increased $25,000. It's accelerating! Is this true of most property in Sevierville? Is there still money to be made by flipping houses in Sevierville? How many net new families are you getting per year vs new construction? Thank you

[mbmouse]

I can only speak of the Tri-Cities area and area East of Knoxville. The past 5 years has seen a 5% to 7% equity growth. Recently ( I believe the first half of 2007) some areas such as Kingsport has seen a 9% equity growth.
I have yet to see any reductions in any housing in this area.
I have however seen houses that have been put on the market WAY over prices an then listed in the MLS with big REDUCED signs on them, but they have only been "reduced" after the sellers have realized people aren't dumb and brought the price back to where it belongs.
Misty Panada, yes people here are making money flipping houses here, normally I wouldn't like this practice, however it seems to be working very well in the downtown areas as it is really upgrading and changing the atmosphere of areas that in the past has been a bit run down, now the flipping practice is really revitalizing those areas. So for now in this area flipping is pretty beneficial to all involved.

[Misty Panda]

Hi mbmouse, A 9% return isn't too bad really. I guess that wouldn't be enough to effectively flip houses considering the commission costs involved? Does the Tri-Cities area and East of Knoxville have enough growth so flipped properties would be snapped up without sitting, say within a month or less. Multiple bids on properties?

[mbmouse]

Originally Posted by Misty Panda

Hi mbmouse, A 9% return isn't too bad really. I guess that wouldn't be enough to effectively flip houses considering the commission costs involved? Does the Tri-Cities area and East of Knoxville have enough growth so flipped properties would be snapped up without sitting, say within a month or less. Multiple bids on properties?

The 9% was not a flip rate but an average equity growth on houses.
Multiple bids on a property is not something you will find here and the average time on the market for a well priced house is 3 months. However that is an average, if you find in the right place and depending on what you do to flip it, how much and what kind of upgrades etc, yea they can go quicker than 3 months.

[Misty Panda]

mbmouse,

We aren't really flippers anyway, even though it has intrigued us greatly. We were curious as to the growth and sales rates really.

Thank you again, Misty

[goodbyehollywood]

Average DOM in East TN is more than 96 days and that number is increasing. Ask any seller whose turnkey home has been sitting since March. Multiple bids are laughable here, as most people have more sense than to bid up a price. If a house has an offer, they'll simply walk away and focus on one of the thousands of other properties available from sellers expecting to negotiate down, not up. So no, flipping properties is not a winning idea here, unless of course, spending months and thousands to barely break even is your goal.

Flipping houses has done wonders for the real estate markets and housing prices in the hot flipping areas. Las Vegas, Phoenix, South Florida, SoCal and D.C. Metro pop to mind. (I have a friend in LV whose home has been on the market for 16 months, at $125K less than what he paid for it!) Speculation is what drove the prices insanely beyond reason in these markets, and homeowners there haven't felt the worst of the pain. Locals and the less well-to-do are left out, the American Dream of home ownership unachievable or unsustainable in an area where proud residents have deep roots.

Yes, urban revitalization is good and I'm all for it, but it doesn't... won't... can't... stop there. Greed is unquenchable and ever-escalating. Once somebody makes a penny, the next guy wants two. If flipping comes to East TN, the fleeing rats from sinking cities will scurry in and the smart money will cash out-- ka-ching-- and move elsewhere, leaving locals with unrealistically high prices and no economic and employment base to support them. JMO, but history has sided with me, again and again and again. Flippers, speculators, developers -- whatever you want to call them-- have their own agenda. Back in the 1860s, they were called "carpetbaggers."

Tennesseans in favor of flipping, show your thumbs.

[mbmouse]

You are right goodbyhollwood, I guess I should have thought more about the national concept of the term "house flipping". I was speaking of local here in North East TN. Most of those that do "flipping" here, buy a old house in downtown areas and update them to an average livable, nice house. They make about 40k, not 100k or more per house. It is also not something that is being done in mass. Example, they buy for 20k or less, put in new windows, doors, bathrooms and kitchens. Spruce it up some, put in about 20k-30k and sell it for about 90k. These homes can sit on the market for the same 3 months or so that any other house does. Sure there are others than can be bought for the 60k-70k, updated and sold for 120k but you don't see the buy it for 20k, put 10k into it and sell for 200k. No it is not your typical "flipping" practices, you are right.

[JMT]

Originally Posted by goodbyehollywood

Average DOM in East TN is more than 96 days and that number is increasing. Ask any seller whose turnkey home has been sitting since March. Multiple bids are laughable here, as most people have more sense than to bid up a price. If a house has an offer, they'll simply walk away and focus on one of the thousands of other properties available from sellers expecting to negotiate down, not up. So no, flipping properties is not a winning idea here, unless of course, spending months and thousands to barely break even is your goal.

Flipping houses has done wonders for the real estate markets and housing prices in the hot flipping areas. Las Vegas, Phoenix, South Florida, SoCal and D.C. Metro pop to mind. (I have a friend in LV whose home has been on the market for 16 months, at $125K less than what he paid for it!) Speculation is what drove the prices insanely beyond reason in these markets, and homeowners there haven't felt the worst of the pain. Locals and the less well-to-do are left out, the American Dream of home ownership unachievable or unsustainable in an area where proud residents have deep roots.

Yes, urban revitalization is good and I'm all for it, but it doesn't... won't... can't... stop there. Greed is unquenchable and ever-escalating. Once somebody makes a penny, the next guy wants two. If flipping comes to East TN, the fleeing rats from sinking cities will scurry in and the smart money will cash out-- ka-ching-- and move elsewhere, leaving locals with unrealistically high prices and no economic and employment base to support them. JMO, but history has sided with me, again and again and again. Flippers, speculators, developers -- whatever you want to call them-- have their own agenda. Back in the 1860s, they were called "carpetbaggers."

Tennesseans in favor of flipping, show your thumbs.

I would normally say "you took the words right out of my mouth" except your wording is much more eloquent than mine. I agree 100% with what you said, particularly about GREED being a major motivator in the unholy practice of house flipping. Someone a few weeks ago posted an article about the slumping housing market in South Florida, and a realtor said that greed was probably the biggest factor. I couldn't agree more.