How is the real esate market in Knoxville? (Maryville: mortgage, credit)

[hiknapster]

Originally Posted by hilly7

I'm not sure but in my mind on a couple both employed 30-50% of only one income, lowest one. I'm not even sure if that would qualify a lot of people to buy a home locally so they might have to go more.
My advice, for what it's worth is don't marry yourself to a house. You MUST HAVE money for a rainy day, money to spend or just blow, even if a little. Divorce rates climb when money is too tight, so does sickness not to mention employers love in debt employees, the deeper the better.
While I'm on my soapbox, don't refinance your car into a house to buy a house. How many 30 year old cars do your see driven as daily drivers?
Buy a smaller house, want bigger then work your way up when you can afford it or add on.

Whoa.

Now THAT'S a great real estate agent!

[sliverbox]

Hilly,
Very well said. In fact, I think banks need to go back to an era where loans would only be approved IF and only IF a home could be bought using 30% of a given couple's income. It is true- MANY where I live now are paying way more than 50% of their incomes on their mortgages, and what's worse is that many off those loans were for 100% financing. Very risky business.

One thing I would like to see is a return to constructing SMALL homes. Not these giant 3,000 sq foot monstrosities. There exists a HUGE demand for starter homes in every single market. People looking to buy a starter home don't want to pay 200k. More like 100-150k. If builders realized this, they would sell every single home they built. I'd be willing to wager that the profit margin on such houses would be higher. Both sides win, and ultimately the builders will win even more, because if you build starter homes, those who buy will likely 'trade up' in the future for perhaps a bigger home.

That's what is missing these days in many metro markets: the starter market. Bring that back and affordability, sales activity, and appreciation will return.

[hiknapster]

I agree and have been saying that for years. But with time, it has only gotten worse.

I would be thrilled with a 2/1, 900 square feet and a postage stamp yard big enough to put a small garden in. Why can't they see that?

I don't care that it will have little resale value. I'll live in it until I die. And the less room, the less chance of an in-law showing up at my door!

[suzycue]

Originally Posted by hiknapster

I agree, Sliverbox. I think the prices started to go up in the past couple of years because people were able to sell their houses and escape from other states. Now that real estate is tanking I don't see those prices going up much anymore. Sure, there are a lot of people wanting to move to Tennessee, but can they sell their house?

Yep, that is my situation now....I was going to try to sell my home on my own, but after researching the market; many homes in my area have put their homes for sale, and one home that was put for sale in January 07, closed in June 07..took a while to close and sellers had to lower the price by 20K...This freaked me out, cause you hear how the real estate market is doing on the news or by people, etc..and you think..it can't be that bad...but when it is your turn to sell....you're like....OMG!!! I finally realized that it will be impossible for me to sell my home on my own and save that realtor commission that I wanted..(I wanted to use that money to move, but oh, well..).I think that I am better off using someone with experience and someone I can trust to help me sell my home in this crazy market, so I am meeting with someone this week, and in July my home will be put on the market....It breaks my heart to sell my home, but I must get out of here!! It is time to move on

[Tony1790]

Hello all (Silver, Napster, MBMouse, etc)

I've been off the board for a while, I've started my job in Kansas City (actually in Atlanta for the next 2 weeks trng). I closed on my land sale (my last piece of real estate in the whole wide world) A couple from FL bought it for cash, they are still trying to sell their house in FL.....no takers, FL is a mess, what with the insurance and taxes. There was a news report that said that prices had come down 25% in some parts of FL already, ugh.

Anyway, I'm a bit of a housing bear, so I'm in line with what many said on here, except that if a magazine is calling for a 1 - 2 % rise thru 2008, then I'd bank on a 5-10% drop thru 2008 and that's what I'm looking for and here's why.

The 10 yr bond yield has been climbing, long term rates have went up some, general economic mood of the country is starting to sour, feeder markets of TN are crashing (FL, MA, VT, CA, etc) and a general starting of a credit contraction that's been in place for a few months, tied to slower sales, and more inventory (nation wide)......all of this points to an eventual reduction in prices.

There was a news report on the radio that said that 19% of sub prime loans in TN are in default, that's 1 in 5, as those homes get put on the market as REO, that will help lower prices and increase inventory as well.

As Silver said, in most areas, (excluding TN) it's pretty common to pay 40 - 50% of your budget on housing which is crazy, considering you can rent the same home for half the money (generally speaking).

Anyway, I've placed my bet's and my money's on the table, (sold my homes and my land for a profit) and now I'm starting a new job, trying to save up some more money and eventually move to TN.....

....until then I offer this advice. If you are a seller and need to sell, cut, no, Slash your home price, fire the realtor or negotiate a lower commission, etc. Clean out the junk in your home, sell it, burn it or store it, and then if you get an offer.....take it, don't try to hold out, don't think about it.....take the friggin offer and thank god that you got one. I know too many people that are stupidly saying stuff like "I can't take a loss" or the market will come back soon. They say the first loss is the best loss, take it like a man (woman) and move on, it doesn't get better with age.

I can name 5 -10 people that I know (my sister included) that are in the process of losing it all due to not wanting to take a small loss, when bigger losses are looming on the horizon.

Anyway, that's my free advice, take it or leave it, but I just sold 12 houses and 4 very nice pieces of land and I expect to buy them back at much cheaper prices in about 18 months, if not, I'll save my pennies and do something else.

God bless to all that are selling, I wish you the best, my sister's home has been vacant now for almost 2 years, don't let that happen to you.

Tony in Kansas City, MO

[hiknapster]

Tony, I agree. I've been following the Florida market. It's a disaster.

Thanks for giving us an update!

[mjb62676]

Wow...I had a 13% return on my house in a little over 2 years.

[sliverbox]

Congrats on the job in Kansas City Tony. How do you like it over there? Some people like it, some people don't. I couldn't agree with you more over selling a home these days. As someone who sees a LOT of people moving, there are a number of mistakes I see being made repeatedly by people.

A: " I'm gonna' wait until the market comes back" The market was freakishly high and supported by unethical economics. Sooner or later it had to come down. Places like CA and FL will more than likely have rampant depreciation. I predict anything from a 20-30% loss in Florida and parts of CA and the Northeast. This has already started to happen in FL and Chicago.

B: " I'm going to move first, sell my old home later, and buy my new home now." Why you'd do this is beyond me, yet people do it ALL THE TIME on the assumption that they can easily sell their house for 2005 prices when in reality they are not going to get anything close to that.

C: " we're visiting this weekend to buy a home." Lots and lots of people seem to come down to an area they don't know much about, have no jobs lined up, and are ringing their hands to buy a home in a weekend. This is a knee-jerk reaction from people who've lived in housing bubble zones, who saw rampant overappreiation, and think that they MUST buy now or be priced out forever. But what existed in NY, CA, MA doesn't apply in TN, where appreciation is still going along as it always had. 2-3% on average, up to 10% in a good year.

But to bring up a secondary aftermath effect, I do have to admit that the concern I have is that so many states got so horribly overpriced, or lost so much of their industry and economy ( MI) or got hit with double-whammies like insurance and high prices( FL) AND the hundred-zillion baby-boomer teetering on the edge of retirement who ALL want to move away from the North and I do wonder if despite the slowing market, the South will unfortunately absorb some of this fallout in the form of people with big buying power and money from other states who still to this day are salivating at " How cheap" it is there. Only time will tell really.

[hiknapster]

But they have to sell those homes. At this point, unless they are having a fire sale, it's going to be tough.

I know the Knoxville area has had decent growth due to transplants. Lately, all bets are off. I no longer see prices going up. I'm waiting to see what it looks like in a month.

Also, not talked about on this forum is the HUGE amount of foreclosures in Tennessee.

[hilly7]

Just my 2 cents, and I could be wrong but I really don't see a drop in Tn for quite a while. It has been affordable, at least more affordable in Tn than most states and with the influx of people moving here I don't see it slacking off on the ones that have saved or has thiers paid off. Eventually TN will see a saturation point in a few years and may even sooner due to people cominh here at a whim or dishonest advertising and buying at the sour of the moment. It's kind of like a fad, almost like clothing fashion. Eventually there will be somewhere else that becomes the fad and then prices will drop but until a new state becomes the new fad it will remain fairly steady.
It has slowed a bit due to people in states that have bottomed that must sell their homes before they can buy. There in lies another problem, having 2 house payments or doing a bridge loan that makes a hugh payment, don't do it. Your better off riding it out and banning together to change laws in your own state if you can. You are better off dropping the price before losing it but if you can afford it laws can and usually will change. The states borrow or figure their budget by how much money they bring in and without OTP they will have to settle for budgets that don't include 200.oo haircuts.