Came for a visit after 2 years of being away... (Knoxville: credit, loans)

[sliverbox]

I used to be on this forum quite a bit, but sort of took a sabbatical.Anyhow, I recently came back to visit my parents who live there. I was born and raised there and moved off to California about 8 years ago.

After two years of being away, Knoxville has really changed. Some good, some bad. The good that I observed was that the downtown area was being transformed. All the buildings were being restored. There was a nice brewpub that I ate at and the beer was pretty good. Many buildings that were abandoned when I was a kid were fixed up. The bad was that it seemed like most of these buildings were getting turned into "Luxury lofts" with extraordinarily high price tags. I assume these are primarily made for those from other cities like NY or someplace else because 350k for a loft in Knoxville is insane.

Secondly, I got a real surprise at how much houses in general there cost. It used to be that just a few years ago, you could pick up a decent starter house for maybe 70k or less. Most decent homes that I saw this time around were at least 150-200k. Many of the homes in the boring subdivision in Powell not far from the high school I went to had 220-250k asking prices. I can't imagine; 250k for some ugly looking brick rancher house. Whatever super-cost advantage the area might have had seems to have disappeared.

The bust seems to have caught up in the area. I saw more for sale signs then I've ever seen there. Even places out in the sticks were for sale. Sometimes a street would have 5-6 signs. Entire blocks were for sale. I overheard one person mention that investors came into the area thinking that the prices were so cheap, then bought and now can't sell anything since there are so many homes for sale.

I also noticed that the number of Mcmansion developments was immense. There were at least 5-6 of these developments that didn't exist just miles from where my parents live that didn't exist just a few years ago. Again-these houses are all way above what area locals can afford- 350-400k for some huge brick box with a postage stamp yard and a bradson pear tree. These were built in the middle of a field or on some former farm.

The traffic was a LOT WORSE too. It took us 40 minutes to drive through West Knoxville. Some parts of the freeway were impassable.

From what I saw, it seems like Knoxville has gotten swamped, with mostly what I suspect are families fleeing other states and places. The cost of living there seems to have partially caught up to the rest of the country and the cost advantage is gone.

I have to admit that yes- this is a negative post. But I grew up there and after what I saw, I'm not sure if I care to move back. I hope that there is more efforts made to avoid Knoxville from turning into yet one more overpopulated, overpriced city.

[tntornadox]

I dunno, it still dosen't seem near as expensive as other parts of the country..

Knoxville is growing, which is a good thing, despite what many may say. Odd you still find traffic to be a snarl, they fixed the interstate through Papermill a couple of years ago, unless of course you went Kingston Pike, by which case I wouldn't be surprised about the traffic. It tends to slow down now due to the congestion downtown, not the snarls out West, which will be fixed when I-40 shuts down through downtown on May 1.

I have lived here all my life, and for once, Knoxville looks nice, IMO. Downtown isn't near as much an abandoned ghetto as it once was, in fact, it's beginning to look really nice. The south waterfront project will transform Knoxville's skyline forever and get rid of some of the blight, several new skyscrapers (for Knoxville, anyway) are on their way...

The city has a responsible government with an intelligent mayor, and is being ran efficiently. I trust Haslam will not allow the city to become a mess under his reign.

Honestly, I can't think of a better time to call Rocky Top home..

[weisgarber1]

The cost of living there seems to have partially caught up to the rest of the country and the cost advantage is gone.

That is totally untrue and is just a personal opinion, not validated by facts or statistics, which in fact show the opposite is true, as far as cost of living is concerned.

[goodbyehollywood]

Originally Posted by sliverbox

But I grew up there and after what I saw, I'm not sure if I care to move back. I hope that there is more efforts made to avoid Knoxville from turning into yet one more overpopulated, overpriced city.

It's not just Knoxville-- it's most growing, small-to-mid-sized cities in desirable SE locations. People fleeing overpriced areas have to flee somewhere and the sunny South is the flavor of the month. With population influx comes escalating traffic, crime, discord, housing and, yes, prices. I watched Knoxville prices rise steadily for two years before I finally moved back from CA. I paid 100K more than I had planned, after chasing prices upward for those two years. But I still spend a lot of time in L.A. and I can say with certainty that Knoxville traffic, crime, discord, housing and prices are NOWHERE near the outrageousness of CA.

The same influx that ruined CA is now moving East. People will continue fleeing pricier areas into less pricey ones. It is the migratory trend of the new millennium. People leaving somewhere have to go somewhere else, and the trend is to go somewhere simpler and less expensive. As CA comes down, other areas will go up. History has shown that is unlikely to change.

But welcome back, sliverbox!

[sliverbox]

Again,
Sorry to sound so negative about this.I'm not trying to pull any nerves here. But the differences to me seemed pretty drastic. Yes, I agree that Knoxville now looks nice-especially compared to what it did when I lived there, which was back when the only thing in Downtown was the tattered remnants of the World's Fair. I guess what I mean by " Knoxville had caught up to the rest of the country" is that what I saw in dollar cost wasn't matching up to the type of value I saw just two years ago. Back then, you could still get a pretty decent home on some land for 100-150k. Those same plots of land were pushing 300k when I was there. Ordinary 1970's homes were easily 200k in most places-more if they were near a school. I flipped through dozens of RE rags there and looked at a few that were for sale in the area.

That isn't to say that 100k houses don't exist, but these were typically tiny little Post WW2 homes or again- ramshackle affairs. Monetarily- yes the prices are lower than ( name your overpriced coastal city here) but that doesn't to me mean value, of which I saw much less of in Knoxville and especially Nashville. I think people from other places are going to keep coming until that delta is closed between the areas. The prices can only go so high before they start making the allure of a cheaper cost of living disappear. Some parts of Knoxville are getting dangerously close to that, and the fact that I saw distress there with all the houses for sale along with the national credit crisis and housing bust means that the boom might well be over for Knoxville as well anyhow. If you look at other major cities, some of them are having severe price depreciation. So if a house that was at one time 500k in New Jersey is now worth 350k, then how is paying 250k in Knoxville for less pay any better? You might break even. That's partially why I think things have slowed in the Southeast.


The point I'm trying to make here is that I think Knoxville and most other Southern cities have now jumped the gap from simply being cheap little cities in which people from other states can affordably deposit their families to more modern, functioning, growing, and subsequently pricier cities. So I think the attitude of simply moving there for nothing other than cheap houses is a bit outdated. You aren't going to get a steal anymore, so you might want to ask why you're moving there in the first place. Of course snowbirds want warm weather and a lake. But for the rest, I think a visit is worth a thousand words.

[goodbyehollywood]

I think the macro view, unfortunately, is that no place is affordable anymore.

The high-priced urban areas have the jobs, but few can afford the housing. The lower priced areas have affordable housing, but you earn less, so you increasingly can't make ends meet as RE prices go up. So the gap exists everywhere. Ordinary people can no longer afford homes, based on traditional ratios. I've lived in overpriced urban areas my entire working life, so I got used to paying 50% or more for housing long ago. I've made do with less elsewhere to compensate. Unless that gap between what people make and what things cost narrows, higher ratios are going to be the norm. Without the credit cards (that's another issue!), that's going to change how people define "necessities" and "luxuries."

I agree-- the days of "steals" are over and the days of "bargains" may not be far behind.

[SmokyMtnGal]

Welcome Back!

Everyone is entitled to their opinion. I happen to disagree lock, stock and barrel with your opinion but that is ok. For us, we love it here and financially this is a great place for us. We lived in other states and find that we do better here. Other towns work better for other people and that is what makes the world go round.

Growth and sprawl is happening in a lot of places, not just here. Go read some of the other boards and one will see the very same posts such as yours. Change is difficult for some and I remember my grandparents saying some of the same sort of sentiments about their day and time.

All the best,

SMG

[sliverbox]

Again- I think that if you have lived or live elsewhere, compared to other places, Knoxville still has some degree of affordability that it can wave around in the air as a drawing factor. I would not go as far as to say that Knoxville is not affordable.But I wouldn't say it is cheap, and from what I saw, you get far less for what you pay than even a few years ago.I realize that people from say- NY are going to flip open a RE magazine and see a 250k house in Knoxville and say" golly! that's cheap!" But is it really? is 250k 'cheap' for Knoxville? Not really.

I think the sprawl there is above average, but it has been like that for years. The sprawl was only part of it. The Mcmansion developments were another.Perhaps some people like them because " You get a lotta' house for your dollar" but to me the things are simply hideous looking.

But...the "good" thing is that I personally believe that the housing boom that TN got just a nip of is over. The credit system is in the crapper and banks aren't going to be giving out loans to just anybody, and especially not flippers and speculators.

Again- I'm pretty sure that Knoxville and maybe even Nashville no longer meet my criteria. The prices are no longer fantastic enough to make we want to relocate there, especially since the job market is what I'd call fair, but not great.I'd be taking a big risk moving there since the job I do would be scarce there. I'd rather pay slightly more for a house in a city that has more job opportunities. Its starting to look like Austin might be a better bet.

At least Knoxville isn't like Raleigh. That city is now maxed out price-wise. You can't touch anything there for under 250k.

[creeksitter]

SB, do you have kids? do you have to worry about schools? Because once the young'uns fly the nest I'm pretty sure you can find something in your price range.

[NJDevil]

There has indeed been a mass exodus from other states (ESPECIALLY FL) to Knoxville. Due to astronomical insurance rates after the hurricanes of 04 and 05, a lot of us could no longer afford to live in FL. Knoxville is a hub, a LOT of companies are headquartered/based here, because of the 3 major interstates (don't forget 81). People will continue to flock here for jobs. Add to this UT and the nearness to the Smokies, and Knoxville is doomed to keep growing and expanding. Hopefully it will not be all bad. New roads (highways) will have to be built, it is inevitable.