Is this a stupid idea? (Knoxville, Maryville: for sale by owner, real estate, foreclosures)

[Topo]

Ok, please be honest here with your opinions. I thought of something the other day, and need to find out how feasible, or stupid it is. Thought I would run it across you lovely people here on the knoxville board.

Here it is, I have realized that the real estate in Knoxville/and the surrounding areas are going up and up and I am not sure if they are going to bottom out at some time or another or just keep rising.
Also, employment seems like it is kind of hard to find, well something that makes reasonable wages anyhow. So this is my thought.

What if I bought a house/condo in the area of Knoxville/Maryville now and either put it in a realtors hands, rent it out, or visit on weekends and holidays and work at my current job until I can either pay it off, or afford to move there w/o employment.

This way I will I will not have to worry about finding a place in another 5yrs or so that I can afford, and also will not have to worry about employment, or paying for the place or being able to afford it paying my own health insurance. What does everyone think?

I live in the central part of NC, so this seems doable to me, any ideas, opinions, or suggestions as to my thought? You guys have alot of wisdom and I treasure your opinions.

I am alone, and have to come up with solutions to afford to relocate, and eventually retire there in the Knoxville area.

[hiknapster]

Who says they are going "up and up?" If anything, they are leveling off.

I almost bought a house a week ago. It was a flip that sat on the market for five months, and didn't get any activity until they got desperate and drastically reduced the price.

On the radio we are hearing lots of ads from these planned communities trying to sell lots. A couple of months ago, there were no ads.

Of course the real estate agents will come on here and say none of that is true.

Funny thing about that. A year ago, we hardly saw any agents on here. Now, there are lots of them.

[Monicaabc]

Originally Posted by hiknapster

Who says they are going "up and up?" If anything, they are leveling off.

I almost bought a house a week ago. It was a flip that sat on the market for five months, and didn't get any activity until they got desperate and drastically reduced the price.

On the radio we are hearing lots of ads from these planned communities trying to sell lots. A couple of months ago, there were no ads.

Of course the real estate agents will come on here and say none of that is true.

Funny thing about that. A year ago, we hardly saw any agents on here. Now, there are lots of them.

I agree! My husband and I are selling and buying right now. I just heard a financial expert on the today show yelling out "DO NOT BUY A HOUSE NOW DO NOT BUY A HOUSE NOW YOU WILL LOSE MONEY!!!!!" He was also on the very next day because he had received death threats! The point is, we have had our house on the market for over a year. We finally relented and reduced the price using a 7% appreciation for every year we lived here. We still wound up selling it for less than even that because we HAVE to move. On the other side we are trying to BUY in Knoxville. The house we are looking at..same situation on the market for over a year. Prices will soon start to fall falll fall fall. They will have to. People like us must move not by choice, there are millions of us out there. All this to say........if you have the time I would wait at least a year to see what the market is going to do. Investing is a gamble but I think all the signs point to prices going down.

[Topo]

Interesting info, I guess in the last few years I have seen the area grow so much that I am worried in a year or two when I am ready to make the move that I won't be able to afford anything. But, if you guys don't think the area will go up anymore that is wonderful news also. A plus for me! Thank you for all the considerate comments.

[pdq]

Hey Topo,

I understand where you're coming from but please understand that a realtors only desire is to convince you to buy something now, right now. They will use any tactic available. The old tired line "buy now or be priced out forever" is quite funny considering where the market is heading.

Yes many "asking" prices are still rising and many many many properties are sitting without a buyer in site. I know of several nice mid priced homes that have been sitting for more than a year, a few for over two-three years. The Knoxville mls has over 24,000 properties listed and continues to rise. When you add in FSBO, and others, this is the largest glut of "for sale" that the Knoxville area has ever seen. Sales are off, credit is crunched, this downturn has only started. Many area counties building permits have tanked 35-50% which is a long term indicator of the declining market. So many owners still think they can snag an equity bandit relocating to the area. They keep hanging on to their stale old prices, hoping, praying that someone will make them rich. They may have a better chance in Vegas these days.

The most recent Fed decision on rates showed great concern over this tanking housing market. While the 1/2 point cut gives little in the way of actual help to the end consumer shopping for a mortgage. The cut mainly buys time for the big mortgage companies faced with bankruptcy. The nations biggest, Countrywide is tettering on failure, if it goes... so goes the industry. If you read throught the Fed minutes you'll see great concern for the entire housing industry.

Realtors will tell you that it's different in Knoxville. True, Knoxville didn't see the nauseating price increases of LA, FL, etc. But given Knoxville's poor job market, etc many prices here are far above the historical norm. That given, if you find an amazing "deal" somewhere, someone really desperate, then yes consider buying. Any true deal is going to be bought up by the realtor or real estate company. They don't let "deals" let alone "steals" get past them. Many of the "flips" right now are owned by them.

Some investor rules to consider. Never buy at the top of the market. Never buy in a declining market. The time to buy is when no one is talking about (insert investment here) anymore. If Knoxville was cheap or a good investment pick you'd see every investor in the world flock in and buy everything up. Not happening. Wait a year or two, everything will be cheaper. Nothing sells like the price.

Good luck to you.

[jimlee]

Here's a link to Realtor sales data back to 1999 through August 2007 from the Knoxville Area Association of Realtors

HOME SALES REPORTS

Yearly, quarterly, month; do your own research.

Here's a hint; Knoxville home prices are NOT going down.

3rd quarter 2007 and September figures should be out around the middle of October.

NEW HOME sales are a bit draggy right now but not resales.

BTW, historically, average appreciation rates in the Knoxville area have been in the 3-5% a year range.

[hiknapster]

I take anything that a board of realtors has to say with a grain of salt.

It's kind of like the fox saying that the hen house is safe and secure.

Some of my personal favorites from the eternal optimist David Lereah, former chief economist for the National Association of Realtors...

"If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It's as if you had 500,000 dollar bills stuffed in your mattress." —Lereah, LATimes, August 28, 2005

With sales stabilizing, we should go back to positive price growth early next year" —Lereah, NAR August 2006 existing home sales press release, September 25, 2006

[jimlee]

Take it any way you like.

The link contains the same sales figures that are a public record at the Knox County Registrar of Deeds minus for sale by owner sales, builders, and foreclosures which are roughly another 20% of the market.

Any way you read it; home prices in Knoxville are not declining.

[pdq]

Good one hiknapster,

Keep those Lereah one-liners coming. I'm not that familiar with him. Does he do stand-up comedy? Seems like I saw him doing jokes on Letterman maybe?

It's true, asking prices are not coming down at all, market is just becoming stagnant. Sales in the 2nd quarter (the years strongest q) were off, some areas by quite a bit.

When you have a flood of inventory and no where to go, eventually something gives. People give up or they lower prices or both. Seems like the realtors would want the prices to come off a bit. How much commision do you make selling a home for $150K ? How much do you make not selling the same home for $200K ? Perhaps they're stuck owning a larger amount of the inventory than I originally thought.

Best of luck!

[mbmouse]

Hiknapster, why would you take that info with "a grain of salt"? As stated, that info is all gathered from actual sales and deeds registered at the court house.