What's becoming of the green, green grass of home? (Knoxville: apartment complex, credit)
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Seems to me Knoxville and Nashville are apples and oranges. There is little industry in Knoxville, while Nashville is booming with business-- lots of big nationals relocating HQs and regional offices there. As a result, Nashville is seeing a rapid influx of young professionals and affluent middle and upper-middle managers, while Knoxville is seeing retirees, because they don't need good jobs, which Knoxville has in short supply. Yet real estate prices are escalating more or less in tandem in the two cities.
I don't understand the lack of balance in Knoxville. Usually high home prices mean high paying jobs, coastal access, scarcity of land or wonderful weather-- none of which really apply to Knoxville. Yet there are scads of people buying high-end homes, driving prices up and leading developers to bid against each other to turn vacant parcels of land into more and more exclusive enclaves. There can't be that many CEOs, CFOs or wealthy retirees in Knoxville.
And if people are coming here for a less expensive cost of living, why are they buying $400K, $500K or $600K homes? If they wanted that, why not just stay where they are-- they'll probably have an easier time finding a job. And their sales tax will be lower. It's a puzzle-- all this influx, with so little industry to support it.
And Knoxville's version of smart growth developments are skyrocketing. There was an article in the WSJ or one of the business pubs not that long ago. Downtown lofts are selling like mad for $199/SF (and rising by the nanosecond) and the new mixed-use business-residential development off Northshore is selling well. Small homes start, I believe, in the mid-to-high $400Ks. At this rate, they'll be in the $500Ks next year.
But where are the jobs? I'm baffled.
The answer to that question is pretty obvious...but then, this would turn into a political debate pretty quickly.
LOL! no, but I did live in Boston for 2 years. What god-awful MISERABLE weather. I couldn't believe how expensive it was there. Sub-zero winter weather, and people were delighted to blow 500k on a crappy little house.
No wonder the whole Northeast is a sinking cesspit. Crappy weather, a crumbling economy, and way overpriced housing. Folks from up there are what concern me. They come on down here and see a 300k house and they're like: " 300k? Is that all? I'll buy 3 of them!" That's how prices get too high.
That's where I'm from. Born and raised in a crappy little factory town about an hour out of Boston. Of course, the factories closed a long time ago. Then the Boston yuppies moved in and jacked up the prices. No one from my high school class, save for a few, actually lives there anymore.
And Knoxville's version of smart growth developments are skyrocketing. There was an article in the WSJ or one of the business pubs not that long ago. Downtown lofts are selling like mad for $199/SF (and rising by the nanosecond) and the new mixed-use business-residential development off Northshore is selling well. Small homes start, I believe, in the mid-to-high $400Ks. At this rate, they'll be in the $500Ks next year.
Indeed, you hit the nail on the head in one part of your post which is that Knoxville is getting scads of wealthy retirees. What I mean by wealthy is that they might have been middle class in MA, but after they sell their house, retire from their jobs, and scoop up all those investments they made, a move to TN means they will be sitting very pretty.Many boomers are in this position. Post office workers, teachers, and police officers in Connecticut bought their small 2 bedroom house for 2ok and now it is worth 650k. Move to TN, they can buy a HUGE Mcmansion for 300k and be done. Many are making that decision. That Knoxville is becoming a new 'in' place to retire is another reason I marked it offf the map as a place to relocate. I'm a young professional and I do not want to live somewhere that basically gets stiffled in terms of economic options.
But at the same time, everyone says that prices are going through the roof. Yet my dad is getting ready to put an older, Post WW2 3 bedroom modest rental house on the market for around 85k. There are TONS of homes just like this too. Perhaps they aren't big or complete with stainless steel appliances, But they offer a good start for a middle income family. I also watch the MLS in Nashville. My latest count for today shows 12,831 homes under 200k in the Nashville Area. That doesn't include areas outside the area either or undeveloped land. Total count is well over 22,000, which is quite a lot for a city of 450,000. The supply is high. In fact, the supply is higher now than it was a month ago, and way higher than 2 months ago. Usually supply actually drops by this time of year because most families move prior to the 4th of July. So I seriously doubt prices are simply going to go through the roof. That and the last time I was home, a 15 minute drive out of Nashville put you into countryside. There's a LOT of open space out there, and as long as that's the case, prices can't go too high because there is still a lot of land.
I take it you have never been to North Dakota. At least, not in winter.
LOL! no, but I did live in Boston for 2 years. What god-awful MISERABLE weather. I couldn't believe how expensive it was there. Sub-zero winter weather, and people were delighted to blow 500k on a crappy little house.
No wonder the whole Northeast is a sinking cesspit. Crappy weather, a crumbling economy, and way overpriced housing. Folks from up there are what concern me. They come on down here and see a 300k house and they're like: " 300k? Is that all? I'll buy 3 of them!" That's how prices get too high.
True story. When we first moved here, I was in the Loudon County Assessors office educating myself about the local property taxes prior to making an offer on a farm. The lady who was helping me said the staff was constantly amazed at the responses they got from people in relatively high tax Tellico Village.
Rather than being outraged at the high taxes they had to pay (due to the high assessed valuations compared to the rest of the county), they universally expressed delight, saying things like, "Wow, only $2,000 a year. We had to pay $6,000 a year back in Connecticut."
But at the same time, everyone says that prices are going through the roof. Yet my dad is getting ready to put an older, Post WW2 3 bedroom modest rental house on the market for around 85k. There are TONS of homes just like this too. Perhaps they aren't big or complete with stainless steel appliances, But they offer a good start for a middle income family. I also watch the MLS in Nashville. My latest count for today shows 12,831 homes under 200k in the Nashville Area. That doesn't include areas outside the area either or undeveloped land. Total count is well over 22,000, which is quite a lot for a city of 450,000. The supply is high. In fact, the supply is higher now than it was a month ago, and way higher than 2 months ago. Usually supply actually drops by this time of year because most families move prior to the 4th of July. So I seriously doubt prices are simply going to go through the roof. That and the last time I was home, a 15 minute drive out of Nashville put you into countryside. There's a LOT of open space out there, and as long as that's the case, prices can't go too high because there is still a lot of land.
Knoxville prices were poised to go skyrocketing into the ozone. Now, I don't think it's going to happen. You see that supply going up, sliverbox, because people can't SELL the house they are in now in another state.
Real estate went from bad to worse just in the past month. The news reports say that it is the worse it has been in years, but wait until the July 25 real estate report. I bet that one will be a real eye-opener.
Sub-prime tanked and foreclosures are continuing. The ARMs are getting ready to reset this summer on a lot of these mortgages. Builders are dumping their properties into auction in some volatile states.
This month, in Fort Myers, Florida, a builder pre-sold his condos for $300,000. He couldn't get rid of half of them so he dumped them at auction for $145,000. You should have seen the boomer owners crying and gnashing their teeth.
My MIL is in foreclosure right now in Fort Myers.
For once, the boomers are out in the cold. It must be tough for a people to adjust, that has always had everything handed to them.
In my opinion, TN kind of got 'nipped' by the housing bubble. There is a bit of the aftermath of the fallout from other states, which is that those who got priced out are still seeking more affordable means. But for now, I'd say that TN will probably have a leveling off for a few years. The hysteria nationally is now over.
You're right, hiknapster. But I think Knoxville is a "fence" market. Buyers and sellers are sitting on the fence, and the market could go either way-- up slower or down faster. I think it's stabilizing right now, because the skyrocketing has already happened.
The seller I bought my house from last year had seen the value almost double in five years. That's CA and FL-type inflation, and it happened in many parts of Knoxville, especially West and some parts of North. Homes in those gentrifying historical neighborhoods (which used to be do-not-go-there-for-any-reason slums) are astronomically expensive, as are some of the "mid level" West Knox neighborhoods. Some of the inflation is hidden, since the builders are playing tricks. They start building all-brick homes and selling them in the 300s, then start building brick fronts right down the street and raising the price a bit, all the while reducing the size of the lots and dropping amenities, while the prices gradually bump up to the 400s. That's rampant price escalation creatively camouflaged so buyers don't scream too loud.
There are a lot of homes for sale in my neighborhood, but if sellers can't get their high asking prices, most of them are taking them off the market. And if they're moving out of the area, like my neighbors across the street, they're renting them.
I, too, think we're heading for a day of reckoning. But then I've thought so for a long time and it hasn't happened. The carnage should be much, much worse. So perhaps it never will be. Or perhaps the wolf will keep huffing and puffing and sooner or later, it'll all come down. But in my old neighborhood in L.A.--just yesterday crowned as the Least Affordable City in America, with only 3% of the residents able to afford the median-priced home-- prices are still going up. Yes, the statistics show that they're dropping, but the reality is, in the desirable neighborhoods, they haven't fallen at all. Sure, demand has slacked and DOM are up, but prices have yet to tumble. Time will tell...
I live in Columbus Georgia, which is a nice place to live. But I rather have snow myself and in forthy yeras I have seen snow 4 times I think, but to the point I live on a dead road and that's why we bought this house 10 years ago, it had that country feeling in the city limits. But we now have the second largest Sam's Wholesale Club in the world among 40 new stores that has been built in the last 3 years, we was not hurting for new stores to start with. We have 3 of the largest movie theaters and two smaller theaters, it's like being in Atalanta but in a smaller town. We have over 20.000 ssoilder moving to Ft, Benning in the next few months and with the trafic the way is already I can't begin to wondering what it's going to be like then. People will not be able to get to point A to point B in less then 30 to 40 min's if that, we're not far from that already. Our property value has double but I rather take the small town country feeling any day. We have over 90 Schools already and we need 4 more to have the room for the families that are moving in, prices are going up but the wages are not. In fact my little piece of Country City living is about to be gone, no more then 10 FT to my property line where the fence seperates the dead end to what was a woody area is now becoming a new college and I'M wondering if that will help or harm the vaule of our home. But one thing for sure the noise is something I'M not looking forward too. For some reason when soilders retired they seem to not live Columbus Georgia, which we are happy to have them, please don't take that the wrong way. I do feel safer with them here. It's getting more like Atalanta everyday traffic and all. We are 92 miles from Atlanta on the edge of Flordia and Alabama. Go figure, it's every where.
There are a lot of homes for sale in my neighborhood, but if sellers can't get their high asking prices, most of them are taking them off the market. And if they're moving out of the area, like my neighbors across the street, they're renting them.
I, too, think we're heading for a day of reckoning. But then I've thought so for a long time and it hasn't happened. The carnage should be much, much worse. So perhaps it never will be. Or perhaps the wolf will keep huffing and puffing and sooner or later, it'll all come down. But in my old neighborhood in L.A.--just yesterday crowned as the Least Affordable City in America, with only 3% of the residents able to afford the median-priced home-- prices are still going up. Yes, the statistics show that they're dropping, but the reality is, in the desirable neighborhoods, they haven't fallen at all. Sure, demand has slacked and DOM are up, but prices have yet to tumble. Time will tell...
The prices haven't fallen because the Joneses next door got $300,000 for their crackerjack box in 2005, and the Smiths are not going to be upstaged. Or the Miller's bought their home for $300,000 in 2005 and now their ARM is about to reset and really, truth be told, they can't really make the mortgage payment they have now. They need to sell their house at their asking price or they are toast.
The market's tanking. Mark my words. Is Tennessee tanking? Maybe not, but it isn't going to be the boom that I once feared.
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