Bad time to buy a home in Knoxville? (sale, real estate market)

[husbus]

My wife and I want to buy a house in West Knoxville and start a family, and we really want to do it now, even though it seems like scary times to do it (we're not getting any younger, for one thing).

We have stable economy and own a cheap, crappy house that we don't owe anything on (probably worth 60k or so). However, this is still a major thing for us as it'll be our first real "permanent" home, and we'll probably need to stretch our budget a bit to get everything we want.

The Knoxville market isn't in as bad a shape as the catastrophe areas where people are dumping their houses, obviously, but it also seems clear that it is slowing down. How likely is the Knoxville market to take a significant dip in the near future? Is this a stupid time to buy a major housing upgrade, or should we go for it?

[Beretta]

Feds will probably drop interest rates at the end of the month. Housing prices might dip from where it is now over the next 18 months, but then should rebound. How long will it take our economy to rebound? Lots of guesses out there. Predictions are just that, predictions. Many things influence the economy. The housing inventory in Knoxville will probably pick up around March. While housing prices are down, one can pick up great homes that one probably couldn't afford before. Given that, even if there is a future decline, you are probably still ahead of the game in that there are a lot of people that bought at high prices. There are many variables about all of these things.Take everything into consideration, get a GREAT buyers agent realtor and go househunting. Negotiate the best deal you can and start your family and live happily ever after. One piece of advice I will impart to you is to buy well within your means, do not overextend yourselves. You can always upgrade later. Best of luck to you and your family in 2008.

[mmw]

I'm not from the area, but hoping to relocate soon. But I do a ton of research on the area and how the real estate market is doing. Google Knoxville, TN 2008 Housing Prediction and see what you find. My research shows the area is doing pretty good.

However, remember it is a "buyers" market, which means inventory is great to choose from, prices have leveled off, so you are getting a good home at the right price. The media is killing the housing industry with all the negative input, and neglect to tell the good. Not all states are falling apart. Ohio & Michigan is hurting, but that is because those states are a manufacturing state, and losing jobs because of many plants closing . I do know this, people from them two states are relocating to TN for the economy, the weather, and opportunity.

I'm sure a realtor will give you more insight on Knoxville then I have, but buyers shouldn't be so afraid to buy ~ buying your own home is the best investment anyone can do!

Good luck with your search!

[JMT]

Originally Posted by husbus

My wife and I want to buy a house in West Knoxville and start a family, and we really want to do it now, even though it seems like scary times to do it (we're not getting any younger, for one thing).

We have stable economy and own a cheap, crappy house that we don't owe anything on (probably worth 60k or so). However, this is still a major thing for us as it'll be our first real "permanent" home, and we'll probably need to stretch our budget a bit to get everything we want.

The Knoxville market isn't in as bad a shape as the catastrophe areas where people are dumping their houses, obviously, but it also seems clear that it is slowing down. How likely is the Knoxville market to take a significant dip in the near future? Is this a stupid time to buy a major housing upgrade, or should we go for it?

I'm not sure why it really matters what the Knoxville market will do AFTER you buy your house. I mean, I assume you're going to be in it for the long haul, right? If you find a home that you really like and is in your price range, and as long as you get a decent interest rate with monthly mortgage payments you can easily afford, who cares what happens to the local housing market a year from now? You'll be securely in your home, and no bank can force you to leave your home as long as you're making your monthly payments on time.

If you're going to flip a house, then I'd be worried. But if you plan on living in it for years to come, then I say go for it.

[mbmouse]

I agree with the above posts especially JMT. If you are going to buy a "permanent" home, one you will stay in for years, you WILL gain equity. I will add one important factor that I strongly suggest you do first. Get pre-qualified for a mortgage if you are needing to get one (which it sounds like you are). The one thing that has effected every part of the country from the housing mess in other states is qualifying for a mortgage. It is now rather hard and just about limited to only the very qualified. However if you are very qualified it is a great time, probably one of the best times ever, to get a 30 year fixed mortgage.

[mjb62676]

Originally Posted by husbus

My wife and I want to buy a house in West Knoxville and start a family, and we really want to do it now, even though it seems like scary times to do it (we're not getting any younger, for one thing).

We have stable economy and own a cheap, crappy house that we don't owe anything on (probably worth 60k or so). However, this is still a major thing for us as it'll be our first real "permanent" home, and we'll probably need to stretch our budget a bit to get everything we want.

The Knoxville market isn't in as bad a shape as the catastrophe areas where people are dumping their houses, obviously, but it also seems clear that it is slowing down. How likely is the Knoxville market to take a significant dip in the near future? Is this a stupid time to buy a major housing upgrade, or should we go for it?

You might also consider other areas to see where you can get the most bang for your buck....and get them on the upward swing, rather than buying at the peak (how I view W. Knox County right now).

Just my .02.

[gemkeeper]

SmokyMtnGal, you mention getting a good buyer's agent. I agree that this is quite important.

We felt that we had chosen a great buyer's agent, but as things progress DH and I do not feel that our well-being is at the top of her list. She is now pushing properties as "super buys", and we do not agree. We, also, do not feel that we were represented as we expected and as she portrayed with our deal gone south (so to speak).

Just how in the world is one to know if they have found a "good" buyer's agent and not someone who is helping their agency or fellow realtors make a sale no matter what consequence to their buyer?

Mbmouse, you might have some ideas on this as well as SMG.

[Whataride]

The housing market in the Knoxville area will not be hit like the areas of the country that were boom/speculative buying areas. The definition of the housing bubble is when the median home price is increasing at a greater pace than the median income. In some areas of FL and CA the median increase annually of a home was between 25 and 35% while the median increase in income was between 8 and 10%. It does not take a rocket scientist to figure out that this can't last forever. The correction in the East TN area should be about 10% total and most of the builders have already cut the prices to move inventoryu to reflect this.

Now is a great time to buy...I locked in a rate on Friday at 5.5% on a 30 yr fixed mortgage for one of my clients with no origination points. Most of the people that will try to time the market will still have the same house payment as those that don't. When the bottom hits (probably pretty close to already hit in Knoxville) the rates will already start to rebound and the higher interest payment vs the lower house payment will equal out.

Do your economics research on this but do not let anyone tell you that the prime rate will lower and you need to wait etc etc.... The mortgage rates for fixed rate mortgages have nothing to do with the Prime rate. Fixed rate mortgages are priced on the bond market, not prime rate.

[AdelinaRotar]

Gemthornton: You just do--if you don't feel like you have a great buyer's agent, then you might not. A lot of agents are in with their buyers/sellers for the long haul. I'd rather show my client 40 houses and then have that client refer me to others then push one of the first 5-6 houses to get a deal going. Sometimes it literally takes months and months to find what that client is looking for--it doesn't mean that my client is picky or that I can't find what they want--usually, the client knows exactly what they want and are just waiting for the right one to pop up on the market--sooner or later it does.

Several things you might want to ask a buyer's agent in the future is:

How many buyers have you represented in the past 6 months...Can I have their phone numbers?

How many houses will you show me?...What if I don't find what I'm looking for right away?

Is Real Estate your full-time job?...How available are you for showings?

Pushing properties as "super-buys" doesn't qualify as being a good agent. I have many picky clients, but if I never get referrals if my clients felt pushed at any point--and my business is 90% referrals.

Has your agent worked long with you guys? If so, maybe she/he feels like they've gone above and beyond for you and showed you a ton of properties and you guys are slow to make a decision... This is not an excuse for your agent, but if they're showing you homes every week for the past 6 months...you get my point. I would definitely sit down or call my agent and ask if they feel like they are wasting time with me because I feel like I'm being rushed--I know I would appreciate a call like that vs being bad-mouthed in the future. If your agent cares for her/his reputation and is honestly working for her/his commission, they will be honest with you--maybe they misinterpreted the criteria you all are looking for and they think they are finding you deals after deals and you're refusing each one...maybe your agent just doesn't have a clear understanding of what you're really looking for.

Like any other profession, there are bad apples; however, most agents value your business and will not try to "sell" you on something. Give them a call and discuss your frusturations...communication almost always solves the problem...either by you firing them, you all talking and understanding what the problem is and fixing it, or by your agent refusing to work with you.

[mbmouse]

Originally Posted by gemthornton

SmokyMtnGal, you mention getting a good buyer's agent. I agree that this is quite important.

We felt that we had chosen a great buyer's agent, but as things progress DH and I do not feel that our well-being is at the top of her list. She is now pushing properties as "super buys", and we do not agree. We, also, do not feel that we were represented as we expected and as she portrayed with our deal gone south (so to speak).

Just how in the world is one to know if they have found a "good" buyer's agent and not someone who is helping their agency or fellow realtors make a sale no matter what consequence to their buyer?

Mbmouse, you might have some ideas on this as well as SMG.

I agree with what AdelinaRotar said about buyers agents. It is all in the communication. Being available as a Realtor too is very important. I would also say ask around, use who others were very happy with. Like she said 90% of a Realtors business comes from referrals if they are good. It also can be a matter of connection. If you interview several, you will just "feel" who the right match for you and hubby is. Speaking of, look around, here on City-Data are several Realtors who have spent a lot of time answering questions freely and from what I can tell, very honestly. Haven't seen them advertising either, and they still stick around when they find out they can't on here. Seems like they are caring people who like to help. Give one or two of them a call, might find the best one ever right here where you get some of your answers already. Just an observation and a thought.