How is the real esate market in Knoxville?

[hilly7]

Originally Posted by 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.

You'd be surprised how easy and quick smaller homes sell. I'm in total agreement with you on making them affordable, even though my home is one of the monstrosities you mention. I built my own some 22 years ago then doubled it 14 years ago. My wife and I done it all, no sub-contracting. We bought into the bigger is better and I have to admit that with 3 daughters Biltmore sometimes would not be big enough. LOL.
There is a sorta of brainwashing that goes on here that nobody talks about. Not only the bigger the house the bigger the payments but the bigger taxes, electric bills, bigger maintience bills and so forth. If you sell the bigger houses it usually takes longer because people that can afford to buy these can also afford to build what they want and many just can't afford them at all. Now the funny part is that many builders and agents (the public as well) base how good they are on these bigger houses.
The hype behind "bigger is better" and the "you have arrived" is one of the biggest disinformations ever achieved. Personally I think they build and sell them big for the averages and not the publics. If a builder makes 20% on 200k it is more than 100k. The agent % is based on price sold. Also comes the prestigious titles like $ sold or built or financed. The only thing lacking is the advertising to tell people how they need that much, and it's done quite well.
The bigger house is a slow quarter and few of them verses a smaller house is a quick nickel and many of them. I think if builders ever thought that one out they would be building more affordable housing, they would sell more of them. Houses that were average or even large in the 60s & 70s are now considered small, yet we lived much better overall lives and nodoby smothered to death I know of. We call them starter homes now but then they were just homes we were happy with and afford. Having a bigger home will not ultimately make one happy, in fact it could have the reverse effect.

[mjb62676]

Originally Posted by 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

By the way, welcome to the area I've spent my whole life around. Please let me know if you have any questions.

[suzycue]

Originally Posted by 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

Very good point Tony. Thank you for sharing your experience! I am planning to sell in Miami....Scared to death of what is coming for me, but you know what, I am just going to have to stay positive.....My goal is to be out of here by April 2008, so I will just have to sit tight and see what happens....I think once I sell my house is when I am really going to feel the stress, cause I need to find a job and a place to live in Knoxville, TN...I can't do this now, cause what's the point if I can't go to the interviews, nor I have a place to stay.....I wish all would flow perfectly, but you never know....All I know that it is time to move on and look for a better life! The good thing is that it is just me and my hubby....no kids are involved in this stress....

[Tony1790]

Originally Posted by suzycue

Very good point Tony. Thank you for sharing your experience! I am planning to sell in Miami....Scared to death of what is coming for me, but you know what, I am just going to have to stay positive.....My goal is to be out of here by April 2008, so I will just have to sit tight and see what happens....I think once I sell my house is when I am really going to feel the stress, cause I need to find a job and a place to live in Knoxville, TN...I can't do this now, cause what's the point if I can't go to the interviews, nor I have a place to stay.....I wish all would flow perfectly, but you never know....All I know that it is time to move on and look for a better life! The good thing is that it is just me and my hubby....no kids are involved in this stress....

You know, one of you could go start a job there, rent a small place and when the house sells the other can follow. Or just sell and both move up there, rent a small place until you find a home to purchase. There is no law that says that you have to buy right away, you can (and should) rent first.

Either way, good luck, but I don't have to tell you what the FL market is like right now, are you able to slash your price and get out of there or are you in too deep for that?

Tony

[SmokyMtnGal]

I talked to my RE agent today (in Maryville) and there has been a significant decrease in pendings this past week. I can't speak to other areas around Knoxville.

[suzycue]

Originally Posted by Tony1790

You know, one of you could go start a job there, rent a small place and when the house sells the other can follow. Or just sell and both move up there, rent a small place until you find a home to purchase. There is no law that says that you have to buy right away, you can (and should) rent first.

Either way, good luck, but I don't have to tell you what the FL market is like right now, are you able to slash your price and get out of there or are you in too deep for that?

Tony

Hey Tony, I met with my realtor yesterday, and YES, it does NOT look good for us right now……the only thing I can do right now, is to stay positive, fix up the house a bit and offer some incentives to the buyer...The market is slow and is only getting worse...From what I understand of the market in Miami-Dade County is that the worst hit has been Brickell and Homestead, but the rest is coming...I am worried, but oh well...we are still on time, I guess...
We have come up with several plans to move and for the job search situation....In an ideal situation, we sell the house and one of us gets hired for a job in Knoxville from Miami, and we move (obviously we would have the housing situation resolved as well, we will rent for a year until we decide where to buy, and IF we can buy, not sure of the RE market up there, but I do know it is increasing) Another plan would be what you suggested, I stay in Miami selling the house, while my husband goes to interviews and finds a job. He can rent a small room or something meanwhile....and the other is to just sell and just cross our fingers, move up there and find jobs...this is the riskiest, but we need to have a plan if everything else fails.....The good news is that I have been getting calls from Knoxvillehelpwanted.com….This to me shows me that the job market is moving, so we’ll see…I am hopeful that everything will turn out fine…it is just the two of us and I believe we will be able to manage fine…we are just going to have to tighten our belts A LOT!!!! What do you think?

[Tony1790]

Originally Posted by suzycue

What do you think?

First, ANY advice you get on the internet is worth what you pay for it :-), since it's free here's a couple of questions to ask yourself.

1. Are you coming to TN no matter what? (I'd say you are)
2. What is your timeline to move to TN? (no later than 2008?)
3. What are the interest rates doing? (currently going up)
4. What direction is your real estate values moving? (currently going down)
5. Where will your market be next year? (much lower?? I think so, but who knows)

I just went thru your situation, but I was selling 12 houses and trying to move across country with no job. I just sold my last property, but I started a job elsewhere until I can get transferred to TN.

There are some area's of FL that prices have fallen 25%, there is a massive outflow from FL to TN/NC/SC right now, property taxes are rising fast, insurance costs are out of hand there, so it's not to much to say that the market in FL has a ways to fall.

My advice: Sell the dang house, period....don't shoot for a certain amount of profit, just take what the houses are selling for (not listed for) in your neighborhood and cut that price or add incentives and sell the dang house.

If you are really moving to TN and wait until next year and the market goes down even more, what do you gain? I'd say sell now, undercut your neighbors price and move.....period, end of discussion.

Sorry for putting too much of a point on it, but the market is ugly now with rates at 6.5% what will it look like if the rates only go up 1% to 7.5%??

Good luck with your decision, let us know what you decide to do.

Tony

[suzycue]

Originally Posted by Tony1790

Good luck with your decision, let us know what you decide to do.

Tony

I sure will Tony..Thank you for your great advice! I am moving forward with selling the house. This weekend we are going to prepare the home, fixing here and there to get it ready for picture taking and start marketing it. I am blessed to have found an excellent realtor with integrity and she will be my right arm to help me sell...it is not easy to find good realtors in Miami, but I have known this person for a while...

For the job situation, I am also seeking help with Career services at my school, they are also going to help me find a job

I will keep you posted! Thanks again TONY