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"we're in no hurry to move but are purchasing land now before the prices skyrocket. "
Please don't let this be the reason you buy land now. If you read the results of monthly housing reports, you'll see that TN right along with most other states are actually having a decline in sales. In fact, TN is 11th in the country for having the most foreclosures. That should say something right there. In fact, did you know that in Memphis, there were 19,738 homes sold in 2006, and there were 18,155 residential foreclosures last year? That is A LOT.
I think what many people here are totally forgetting is that the US has just gotten through the biggest housing bubble in it's history. The prices everywhere are totally out of whack with economics. It is only natural that people are shell shocked and having a knee-jerk reaction from more expensive states to buy up land like crazy in cheaper ones. But the bottom line is that the housing bubble has now burst from an unnaturally freakish level. Heck- Florida is already having some areas with 100k cuts on the prices.
In my opinion, anyone buying right now will more than likely be paying more than the land will be worth in a few years, even if the land is seemingly cheap. Just keep an eye on the prices and buy when you really need to, not because you think it will go up. Remember- TN is not FL or CA. Don't expect a massive rush from buyers like happened in FL. The speculative element is now gone.
Sorry to sound nasty. Just trying to throw in a word off caution.
"we're in no hurry to move but are purchasing land now before the prices skyrocket. "
Please don't let this be the reason you buy land now. If you read the results of monthly housing reports, you'll see that TN right along with most other states are actually having a decline in sales. In fact, TN is 11th in the country for having the most foreclosures. That should say something right there. In fact, did you know that in Memphis, there were 19,738 homes sold in 2006, and there were 18,155 residential foreclosures last year? That is A LOT.
I think what many people here are totally forgetting is that the US has just gotten through the biggest housing bubble in it's history. The prices everywhere are totally out of whack with economics. It is only natural that people are shell shocked and having a knee-jerk reaction from more expensive states to buy up land like crazy in cheaper ones. But the bottom line is that the housing bubble has now burst from an unnaturally freakish level. Heck- Florida is already having some areas with 100k cuts on the prices.
In my opinion, anyone buying right now will more than likely be paying more than the land will be worth in a few years, even if the land is seemingly cheap. Just keep an eye on the prices and buy when you really need to, not because you think it will go up. Remember- TN is not FL or CA. Don't expect a massive rush from buyers like happened in FL. The speculative element is now gone.
Sorry to sound nasty. Just trying to throw in a word off caution.
I can not speak for Memphis or any part of west TN, however the housing market here in East TN is not seeing much of any effect from the housing bubble other states are seeing. We are still seeing our steady 5%-7% equity growth a year. I do see there aren't as many homes for sale in the first few months of 07 as there was in the first few months of 06 but I am suspecting that folks are deciding to stay instead of moving out or they are upgrading an moving in state due to volatile markets in other states, but that is my opinion. According to some real estate friends, they believe people are waiting for spring to list their homes.
As far as the foreclosure rate, a lot of those foreclosures are mobile homes (again, here in East TN) I believe this is due to how mobiles are purchased. In the beginning of 05', national lenders began to drop their mobile home lending programs. By mid 06' there were very few that would lend on a mobile, permanent foundation or not. This left only the dealers lenders to finance them at crazy high rates once they adjusted after the first or second year, I have seen up to 14%! As many mobiles are bought here with "land as down payment" program, young couples who's parents gave them the land found themselves in high rate adjustable mortgages with no equity in there property as mobiles drop in value in the first year. No one will refinance them. These folks are left with no choice but to walk away or claim bankruptcy. The rates of bankruptcy's were also up in the past two years in this area. I would venture to guess that a large percentage of those BK's were by folks that owned mobiles. (I say this because I have seen quite a few).
As for construction built homes and the rest of the housing market. You have to understand that the mortgage/lending market goes hand in hand with that. Last quarter of 06, the feds raised the Prime rate from the 6's to the 8's. This caused a huge impact. Now due to the high foreclosure rates and housing bubble across the country, lenders have tightened there criteria on borrowers. The last week and a half were crazy for me and others in the industry. As of March first (because all these statistical reports from 06 are coming in) it is now VERY hard to get 100% financing if you are not in the conforming range. This has and will slow down the rate at which houses are sold as it means less people are able to qualify for a mortgage. To me, this means houses will be on the market a bit longer than historically, which means home sales per month averages will go down, that does not mean home values will go down, the value is still there, just not as many qualified home buyers to purchase them.
"we're in no hurry to move but are purchasing land now before the prices skyrocket. "
Please don't let this be the reason you buy land now. If you read the results of monthly housing reports, you'll see that TN right along with most other states are actually having a decline in sales. In fact, TN is 11th in the country for having the most foreclosures. That should say something right there. In fact, did you know that in Memphis, there were 19,738 homes sold in 2006, and there were 18,155 residential foreclosures last year? That is A LOT.
I think what many people here are totally forgetting is that the US has just gotten through the biggest housing bubble in it's history. The prices everywhere are totally out of whack with economics. It is only natural that people are shell shocked and having a knee-jerk reaction from more expensive states to buy up land like crazy in cheaper ones. But the bottom line is that the housing bubble has now burst from an unnaturally freakish level. Heck- Florida is already having some areas with 100k cuts on the prices.
In my opinion, anyone buying right now will more than likely be paying more than the land will be worth in a few years, even if the land is seemingly cheap. Just keep an eye on the prices and buy when you really need to, not because you think it will go up. Remember- TN is not FL or CA. Don't expect a massive rush from buyers like happened in FL. The speculative element is now gone.
Sorry to sound nasty. Just trying to throw in a word off caution.
I'm the one who made that quote that we're buying now to move later on. We have been looking at land in East TN since last April and we've already seen the land values go down in the areas we're wanting to buy. Compared to under a 1/2 acre of land in our neighborhood now going for $49,000 to 2 acres in TN for $30,000 to us is a deal. This is the time we can afford to buy and keep our home at the same time. We eventually will move but in the meantime we plan to prepare our land for a home and by doing it over time will be less of a financial burden than doing it all at once. When we do make the move, our home and land will be completely paid for and we'll be able to start building a new home hopefully with little money borrowed.
I think now is an excellent time to buy a home or land!
Quote:
Originally Posted by sliverbox
"we're in no hurry to move but are purchasing land now before the prices skyrocket. "
Please don't let this be the reason you buy land now. If you read the results of monthly housing reports, you'll see that TN right along with most other states are actually having a decline in sales. In fact, TN is 11th in the country for having the most foreclosures. That should say something right there. In fact, did you know that in Memphis, there were 19,738 homes sold in 2006, and there were 18,155 residential foreclosures last year? That is A LOT.
I think what many people here are totally forgetting is that the US has just gotten through the biggest housing bubble in it's history. The prices everywhere are totally out of whack with economics. It is only natural that people are shell shocked and having a knee-jerk reaction from more expensive states to buy up land like crazy in cheaper ones. But the bottom line is that the housing bubble has now burst from an unnaturally freakish level. Heck- Florida is already having some areas with 100k cuts on the prices.
In my opinion, anyone buying right now will more than likely be paying more than the land will be worth in a few years, even if the land is seemingly cheap. Just keep an eye on the prices and buy when you really need to, not because you think it will go up. Remember- TN is not FL or CA. Don't expect a massive rush from buyers like happened in FL. The speculative element is now gone.
Sorry to sound nasty. Just trying to throw in a word off caution.
I think you have some very informative and valid points. However, I look at the housing market locally instead of nationally. I pulled the existing homes sales for the last quarter of 2006 from the Dataquick site you reference. It shows that overall, the market in Rutherford County showed an increase of 3% and the market in Nashville only showed a 2.1% decrease. Areas such as Brentwood show an increase of 5.7%. I don't think these percentages are going to make anyone rush out and buy up land or homes but they do reflect our steady market and our consistent increase in value. Investing in a home instead of renting, or buying land for a future home site is a wise investment in Middle TN.
This area has never had a huge number of investors or flippers purchasing homes for immediate resell. The housing market in Memphis is completely different from Nashville and unfair and inaccurate to point to one and indicate it will be the same in the other. Our economy and diverse economy is completely different from Memphis.
Homes that sell for huge percentages off of list price are not the norm here. I think most people in this area, and posting on this forum, are searching for homes and land to be used as personal residences and want to buy wisely. Now is an excellent time to buy since we are in a slight "buyer's market" even though you don't like that phrase. I see homes being reduced in price in order to attract buyers, or seller's accepting offers for amounts lower than their asking price. This was not the case last spring or summer and there is already a change in the market occuring ~ at least locally. The market is again picking up and homes are starting to sell. If nothing else, the number of people now seriously looking (buyers) has increased. Housing prices follow supply and demand. Spring brings more buyers and the demand returns the prices to normal or increases value.
Moodys Economy (not NAR!) did a study on the down turn in the housing market and studied 130 metropolitan areas, including Nashville. Their economists stated that the Nashville market should continue its current trajectory of slow, steady appreciation, insulated from national fluctuation by its diverse economic base. Nashville did not experience the same spike in house prices that affected the rest of the country, and consequently will not experience a plummet.
I think the housing market in Middle TN is solid and will continue to rise steadily in 2007, 2008, and on. But, now is an excellent opportunity to take advantage of a soft market. Buyer's should not come into a home search thinking that they are going to get deep discounts on houses. Likewise, they should not be buying a home or land thinking it will be double in value in the near future. But, if they are realistic and hoping to invest wisely, there are some excellent bargains to be had. It is my honest belief, that these homes and land purchased today will increase in value and show a steady apprecation in value. I certainly dont' believe that "anyone buying right now will more than likely be paying more than the land will be worth in a few years, even if the land is seemingly cheap" as you stated. I respectfully disagree with that statement!
I think most people in this area, and posting on this forum, are searching for homes and land to be used as personal residences and want to buy wisely.
Buyer's should not come into a home search thinking that they are going to get deep discounts on houses. Likewise, they should not be buying a home or land thinking it will be double in value in the near future. But, if they are realistic and hoping to invest wisely, there are some excellent bargains to be had. It is my honest belief, that these homes and land purchased today will increase in value and show a steady apprecation in value. I certainly dont' believe that "anyone buying right now will more than likely be paying more than the land will be worth in a few years, even if the land is seemingly cheap" as you stated. I respectfully disagree with that statement!
I agree. I always thought that the price of land goes up in value because it's so scarce to find it in a particular area but there is a lot of land to be bought in east TN so i don't think the big jump in prices will happen anytime soon. I could be wrong though. I'm not looking to make a profit on our land, we're looking to live on it. but then again have you noticed people buying up the land in big acreage only to make these subdivisions i'm finding all along the interstates? I would say 60% - 70% of the realty i'm finding online are lots in these subdivisions at least in the east side of TN. Not that it's a bad thing to live in a subdivision as it does have it's pros and cons but i'm looking for unrestricted.
I agree. I always thought that the price of land goes up in value because it's so scarce to find it in a particular area but there is a lot of land to be bought in east TN so i don't think the big jump in prices will happen anytime soon. I could be wrong though. I'm not looking to make a profit on our land, we're looking to live on it. but then again have you noticed people buying up the land in big acreage only to make these subdivisions i'm finding all along the interstates? I would say 60% - 70% of the realty i'm finding online are lots in these subdivisions at least in the east side of TN. Not that it's a bad thing to live in a subdivision as it does have it's pros and cons but i'm looking for unrestricted.
It really depends on the area. Right now in Murfreesboro/Rutherford County if a developer can find large plats of land to purchase they will buy those and then cut it up into small plots for subdivision development. There is also going to be a lot of restrictions on raw land in this area, especially city limits. Neighboring counties, like Cannon or DeKalb, have a lot more unrestricted land available for purchase.
Some 2006 tract trends here along the Tenn River valley may not be the future norm. TVA sold Two large waterfront tracts, and public reaction had a future decision to not release any more land. .Always get a few large farms to be acquired by developers. A new bridge on Rt #58 over Hiwassee river will be actractive to that area.
Some of the Lumber co's (Bowater) were selling off their holdings as Pine tree disease Blight fell over many pines, and recycle products reduce need for logging. Developments are productive to lay UTILITIES for new houses, electric, storm water run off, cable -fiberoptic, etc. There are a few Mini-FARM lots (5-8 Acre) that are being offered inside communities, so a few Horses, goats, etc, but NO chickens,Pigs allowed.
Clearing a wooded lot of stumps and running water lines can be expensive and a challange for a single rural house.
Urban boomers, and International owners getting more popular in city of Chattanooga, recent open condo tour has range of $250k to $850k.
There are some excellent posts in this thread. I'm glad some people who are still living there chimed in. I'll state that my perspective is a little skewed when it comes to the housing market. As a native Tennessean, I live in the most expensive area of California, which is also subsequently the most expensive area in the country.
What concerns me is what I saw happen here in the heart of bubble territory and what I sometimes feel "could" happen to TN and other areas. Most of the severe upswing in prices in CA was caused by two things: easy credit and panic. The prices were already high 5 years ago, but they went from being expensive to unaffordable in less than 3 years mainly because there was a mantra that " we'll be priced out forever!" from many buyers. That kind of attitude made people buy well beyond their means and take out some incredibly risky loans. In CA, there is essentially no more room to wiggle and it will take years for things to become anywhere close to normal. In the intervening time... who knows?
That's what when I hear people, especially those from CA, NY, FL, etc make comments that they have to buy now before things get too expensive, I see a very similar thing starting to happen that caused some of the bubble areas to have their roller-coaster cycle. I feel that this kind of unnecessary fear is what causes prices to skyrocket out of control.I also think that people from other more expensive states are conditioned to think that TN is like their home states, and thus likely to have the same illogical appreciation. I doubt this will be happening anytime soon. I am also likely conditioned to feel this way. Simply put- being able to actually afford anything is now a luxury to me. That's true for a lot of people in other states now and still totally foreign to someone living in say- Knoxville.
The comments about trailers was very interesting. I had never thought about that myself, but now that I think of it, there are still a LOT of trailer parks in TN. I think in the case of Memphis, they have some economic issues that come into play with their high rate of foreclosure.
Lastly, I suppose the last thing to consider is that TN's population density is a small fraction of that compared to most northeastern and western states. This simple statistic is reason enough to stave off high prices that go out of line with economic fundamentals.
It is my hope that TN will make the transition into a modern, influential, interesting, economically successful state that is looked up to by others. NYC, SF, LA, Boston have had their time in the light. Now it is our time to shine.
What, are you kidding me? I moved to Knoxville precisely because it was NOT one of those other places. If it is its turn to shine, I plan on moving elsewhere.
"What, are you kidding me? I moved to Knoxville precisely because it was NOT one of those other places. If it is its turn to shine, I plan on moving elsewhere."
In my opinion, Knoxville already has to some extent. Perhaps you had not seen it 20 years ago. But when I was a kid, it was VERY different than it is now. The fact that I ate at a number of slightly sheeshy restaurants in the downtown area versus 10 years ago when it was basically abandoned tells me that the change has already started, and will continue to do so. I barely recognize the area I grew up in. Half the homes there simply did not exist 5 years ago.
I doubt Knoxville will ever be a NYC or even Atlanta. But I wouldn't deny that the area will likely have a tremendous amount of growth- quite possibly in a way that does away with the more romantic notions of a pastoral environment.
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I think now is an excellent time to buy a home or land!
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