Cost of living in Knoxville comparing with other cities (Farragut: sale, renting)

[sliverbox]

I guess perhaps my view is a little off-kilter due to my years of being out here in CA. I am not kidding when I say that a SMALL, older, un-updated, sort of so-so house out here in CA- anywhere- even an hour away from the city can easily be something like 550-600k. Yes. Six-Hundred-thousand-dollars for a 2 bedroom house.

When I hear people say they're moving to TN, it seems like half want these massive, new, stainless steel appliance and granite countertop Mc-monsters. That or something in a subdivision, or something new. Even then, 175-200k for a large home compared to anything out here is astounding.

As for me, I would be perfectly happy with a small, unrestored, old house either out in the sticks, or in a not so yuppified part of town. The fact that houses are actually affordable with real incomes there is to me a luxury. Perhaps I am just shell-shocked from being out here too long.

[hiknapster]

Well, I agree, sort of.

I'm not so sure about the "real income." I guess it depends on what you do. If your a doctor, maybe. But salaries here are not that great.

This all reminds me of Florida. Pay wasn't great but housing was affordable. Then housing went sky-high and pay still wasn't that great.

That's my big concern. I've never been to California, but I don't think we can compare Tennessee to California. Unfortunately, I am seeing a lot of parallels between Tennessee and Florida.

Do you see where I am coming from?

[hoosier07]

Wow, 500K for a two bedroom house.....how can you guys afford it ? How much money you have to make in order to pay the mortgage payments ? That is out of the reality and people cashing out from those homes will continue to drive home prices upward in places like TN. A realtor told me a house that I saw and found way overpriced, it was sold last week for the asking price. A couple from NY bought it and thought it was a great deal. Sold price $235K in East Knox Co.

[sliverbox]

Wow, 500K for a two bedroom house.....how can you guys afford it ? How much money you have to make in order to pay the mortgage payments ?

The answer is that we don't. We rent a large house for 1/5th the cost it would be to buy a crappy house in the ghetto. I am not kidding. Latest projections for what the bare minimum you need to make to pay the median price now, which is still hovering around 650k is around $220,000. That's just to get what seems like a middle class living situation. The median income is around 45-50k.So for now, we just sit back and slowly save our money while the craziness continues.

Something like 60% of all buyers out here used IO loans which means they couldn't afford, but bought anyway. The only people who are cashing out are those that bought 5-6 years ago when prices were much lower. Honestly, to an outsider the situation in CA is absolute insanity. I still find it crazy.

In regards to salary, I think the same can be said nationally that lower income wages are equally bad everywhere. If you're making 6-10 bucks an hour in TN, you might make 15 in CA. whopeee. But for middle income residents in TN, the disparity between CA and TN is amazing. You might make sat 60k in CA, but 45k in TN. The difference is that 45k is actually decent in TN whereas in CA, 60k doesn't mean squat.

Anyhow, bottom line is that we are in the remains of a real estate bubble. There are always large numbers of people who relocate in the fallout right after a downturn. Sales are already off as many people from other states can't sell their homes. This is especially true in CA, FL, and chunks of the Northeast. So I get the feeling that things will cool down in TN before they even come close to getting insane. Raleigh and NC are the "hot" areas that people are flocking too anyway. Don't believe me? check out their city data site. 10 times the amount off people, and all with posts like:" we're from Boston and wanna' move to NC where it is cheeep!" So... Hopefully TN can lay low. That's what I hope anyway.

[sliverbox]

In fact... I just took a peek at the Raleigh city site. Just for that city alone there are 1.5 PAGES of posts from just today. The Knoxville forum?- 4 posts. Entire state of TN?- half a page. That tells you something right there.

I have one hope: Somebody at the Wall Street Journal or some other big publication doesn't write: " Knoxville/Nashville are the BEST places to live! It is so perfect!" The minute they do that- BAM. here they come. I read these articles about Southern cities being so great. Shut up already. Ya, we know and you want to know why they're so great? Because they aren't overpriced and overrun. They will be if these kinds of articles are written.

[hiknapster]

Originally Posted by sliverbox

As for me, I would be perfectly happy with a small, unrestored, old house either out in the sticks, or in a not so yuppified part of town. The fact that houses are actually affordable with real incomes there is to me a luxury. Perhaps I am just shell-shocked from being out here too long.

So why don't you move back home?

[taxguy]

All great points. I considered a job in CA and quickly decided that you can't really move from the South (or Southwest) out to CA. I think moving from CA is the only way to do it.

I agree that Knoxville seems much more like Florida than I bargained for. And every time I find an area of Knoxville that someone says is a little more affordable, bam, the real estate agent says prices went up a month or two ago. The numbers that I am seeing in comparison to Dallas are 3,000 sq ft houses going for $240K over there are easily selling for $275K+ over here in Knoxville. Yes, the shorter commute is worth something but I am not sure it is worth $35K. We may begin looking out beyond Pellissippi State and Faragut to see if further out is truly less $$.

What I am not understanding is the supply and demand theory. If houses are moving that quickly either locals are upgrading which means that should free up other houses for sale or out of towners like myself are coming in. From this board it looks like there is only two of us doing that right now...... I am trying to understand how folks can ask for $100+ per sq ft here and get it with no problem at all. If salaries don't move how are these folks affording this level of housing?? In Florida you can make the argument that the Snow Birds are coming in and driving up values. I don't think you can say that Knoxville would be attractive to the Snow Birds due to its mild weather. Could it be the no income tax? I know that is an attraction to TX for many. I know I shied away from a job in Atlanta for two reasons. The traffic and the income tax.

[hiknapster]

First of all, Sliverbox and I agree to disagree on this.

I see people coming here in droves. (I like ya, Silverbox, but I'm here in Knoxville everyday.)

There are suddenly lots of inventory? So what? That happens every spring. And you are right. Those affordable homes are snapped up in a minute. I'm not seeing it be affordable in Farragut and Pellissippi, either, but quite the contrary.

And yes, the snowbirds are coming.

There are HUGE issues going on in Florida.

Ever looking for the early-bird special, they are now furious that along with their home equity their TAXES have gone up, too! Imagine that! Their homeowner's insurance is SKY-HIGH! How dare those insurance companies jack up the rates after the state was battered by hurricanes?

The ONLY thing that is stopping the area from really seeing the next great land rush is the fact that a lot of these folks can't sell their houses in Florida. Well, I suppose they could, but Joe next door sold his and made a $150,000 profit! Not to be outdone, they wait.

A lot of those folks moved to North Carolina, because let's face it, they like living closer to the ocean, that's why they chose Florida first. But darn it all, the place was just so darn Southern and CROWDED. Now they hear there is NO STATE INCOME TAX in Tennessee.

Like I said, they like their early-bird specials.

It doesn't matter how many people are on this forum, it is not indicative of the onslaught. It may not be North Carolina. Good. But it's still bad.

[sliverbox]

Farragut IS expensive. It was expensive when I was a kid, and it i still expensive. So are parts of Pellisippi.

What exactly are you looking for? My brother bought his house a year ago for 57k. it is small, Post ww2, kind of plain, and it needed work.Lots of it. What I'm wondering whether most people here are looking for fully fixed up, suburban, updated homes, or just a home in general. last time I looked, homes that need work in the area are still widely available. If you're talking 40k... forget it. There were not many 40k homes when I last lived there in late 90's either.

90% of my family lives in east TN. My parent's house, a larger place on 14 acres with an in ground pool and a green house is worth around 150k. My grandmother's 5 miles up the road on 11 acres- 120k. These are larger somewhat decent houses too, fully updated. In fact, none of the values of my family's homes are worth over 200k. Most hover around 70-150k max. So nobody in my family is getting rich, and none of them are seeing this onslaught you mention. Perhaps you aren't fully aware of what exists out there because you aren't from there and haven't investigated all of the surrounding areas fully. I will say that most of my family lives in rural areas. So it depends on what is acceptable to you. If you want city- then you'll pay more. You want country, then you'll pay less.

I am a native Tennessean with over 200 years of family heritage invested in the state. If there is one thing I learned as a kid and I tell those who fret is to be patient, study your surroundings carefully and when the opportunity strikes- then make your move. If you want a home, wait for the market conditions to be right.

[TNherewecome!]

I'd have to say moving from one area to another is sooo different! My family is looking to move to Eastern TN ASAP!! I am very excited to experience the culture shock.

Could anyone make any recommendations....

We are looking for a small town but, close to somewhere we can work. Willing to commute some. Also looking for reasonable pricing on 3-4 bedroom homes. (we are used to them running 175 and up. But would like a little less steep if possible.