MetroPulse Covers Knoxville Housing Market

There's a big article in the new MetroPulse about the state of the Knoxville housing market. The article quotes several Knoxville real estate insiders, including an anonymous source, "John Smith." Apparently John Smith, a recent Knoxville home buyer, wouldn't give his name, because the deal he got was so dang good. That's just wild.

But I digress. The article is not all doom and gloom and makes several good points.

1. The Knoxville housing market is not nearly as far in the toilet as other markets around the country.

From the MetroPulse:

The one trend Knoxville is not sharing with areas like California, not even a little, is decreased home values. Yes, people are pricing some homes below their appraised value so they’ll sell quicker in an excess inventory environment. And true, the median Knoxville metro area home price—$146,000—dropped 2.7 percent from the last quarter of 2007 to the first in 2008. The April report from KAAR goes on to say that the median price of a home with four or more bedrooms fell more than 12 percent to $240,000.

But—and this is an important distinction for the average home owner who has a reasonable mortgage and doesn’t need to sell anytime soon—these statistics mean only that the averages of the prices of homes that sold were lower. Local real estate values have not been affected.

Exactly!

2. Local foreclosures are not out of control.

MetroPulse:

Knoxville’s foreclosure rate of 0.6 of a percent and year-over-year increase of 46 percent is only high enough to place us 72 on a list of the 100 largest metro areas.

And as we've seen week after week in Foreclosure Watch, the number of active, pending, and closed foreclosures, at least in the Knoxville MLS, is remaining more or less steady, not skyrocketing like some national media outlets would lead you to believe.

And don't forget. our market is considered so stable, Knoxville was named the 7th best place in the US to invest in foreclosures.

3. Out of control lending was partly to blame for the current market.

From the article:

“In 2005 and 2006 we saw the trend where the appraisals were too high and the amount of money being loaned became 100 percent of the value of the home or even higher," says Jim Slyman ... "So if the market for the home you paid $300,000 to buy slips even 10 percent, you now owe more than $30,000 over and above your loan."

Along with traditional high-end home buyers, many average folks got bitten. “The reason there have been so many foreclosures is a lot bought houses who should never have been able to qualify..."

Ouch. True, but ouch.

4. The correction of out of control lending practices has knocked a lot of buyers out of the market.

MetroPulse:

“This time last year, you could still get a zero-equity deal, but lenders have tightened their guidelines," says [Jim] Lee..."It’s tougher to quality for a loan right now.”

This is very true. I had a client a few months ago who qualified for a loan and then got knocked out of the market 3 weeks later when minimum credit scores were raised. This client was not able to buy a home and won't be able to for another year - and that's only if they can manage to clean up their credit in that time. Last year, I would have sold that client a home. This year I won't. Pretty basic cause and effect, no?

The article has a lot more to say about Knoxville real estate, and you can read the whole thing here. After you do, come back and let me know what you think about the Pulse's take on our local market. I'd love to hear your thoughts.

Half a Chance

My company, like probably every other real estate company, keeps track of listings taken vs. listings sold. Today I had a chance to review our averages for the last few years and the trend is startling. Check this out:

Percentage of Listings Sold By Year

2005 - 80%
2006 - 70%
2007 - 50%

These numbers are rough and rounded off, but there's a definite trend there, no? I would hazard a guess that the percentages for most other area companies are roughly the same (even though I'm sure a lot of companies don't want to admit to it). If this trend holds up for 2008 (and keep in mind this is totally hypothetical and purely unscientific), that means that at least 50% of the homes we have listed this summer simply won't sell. That's tough.

But that also means that - hypothetically - 50% will sell. So, who will make the cut? The extremely motivated: the folks who are willing and able to get their homes in pristine condition and who are also willing and able - you knew this was coming - to lower their listing price. Because the fact is that there are buyers out there, lots of them, they're just not that motivated. A few years ago, low interest rates and the prospect of getting rich fast motivated them. Today their biggest motivation is price, namely the lowest price they can get. This doesn't mean you have to give your home away, but it does mean that your home must be competitively priced. Now is not the time to get rich. Now is the time to cut your losses and move on if you have to move.

If you do have to sell, get a good agent who will market your home like crazy. Make sure it's getting lots of internet exposure and multiple photos on Realtor.com. And then listen to your agent. If they are doing their marketing and the home is still not showing, that price may have to come down and/or the condition of your home may need to be improved.

If you're not that motivated to sell, and you really want to get more money when you sell your home, now may not be the time to put your home on the market. I know that's hard to hear - heck, it's hard for me to say, considering I'd love to list and sell your home this summer - but it's the truth.

The good news is that homes are still selling. They really are, I promise. And just like everything else in life, this market shall pass - it just may not pass as quickly as a lot of us would like.

Weekly Poll

This week's poll is ready for your voting enjoyment on the top left and this week's topic is the state of the Knoxville housing market.

Nationally, some people say the housing bust is over and others say it's not.

I don't know about other places, but here in K-Town, I've been seeing a ton of activity in the real estate market over the last few months. Granted, it's totally crazy activity (super low-ball offers, deals pieced together MacGyver style with little more than paper clips & chewing gum, financing that would fall over if you breathed hard on it, etc), but after the dead silence that was August - December, 2007, I'll take any activity I can get my hands on.

What do you think? Is the Knoxville market chugging along like the little engine that could or is it seriously derailed?

Of Builders and Baristas

While the weekly poll is showing that most of you think I should go work at Starbucks to offset my rising gas costs, I'm thinking out of work East Tennessee builders might have already filled all the vacant positions. Via Property Scope:

The Knoxville research firm [The Market Edge] recently issued its 1Q numbers for residential building permits, and the comparison with the first quarter of 2007 is grim:

Knox County -- down 58 percent
Loudon County -- down 21 percent
Anderson County -- down 63 percent
Blount County -- down 48 percent
Sevier County -- down 40 percent.

Don't eat all the biscotti before I get there, boys.

Straight from the Cashville

Josh Flory over at Property Scope noted an article from The Tennessean about the Nashville housing market in his daily briefing today. The article says that although Nashville home sales are down, purchase prices are up:

Despite the rising inventory and falling sales, the median price of a single-family home increased 3 percent to $178,388, the fourth time in the last six months that the average home price has risen. The median price of a condo also climbed 5 percent to $160,573.

I'll be interested in to see what the Knoxville Home Sale Report numbers for March say when they come out next week.

Riskiest Real Estate Markets

Here's one Forbes list I'm glad Knoxille didn't make it onto: America's 10 Riskiest Real Estate Markets. The 10 unfortunate winners are:



1. Detroit, MI
2. Orlando, FL
3. Cleveland, OH
4. St. Louis, MO
5. Miami, FL
6. Las Vegas, NV
7. Sacramento, CA
8. Denver, CO
9. Tampa, FL
10. Phoenix, AZ

How risky are these markets? This quote from Forbes.com says it all:

There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate.

Ouch.

Repeat after me: there's no place like Knoxville!

Winona Ryder Caused the U.S. Housing Crisis

I'm a little upset. I just found out that my generation is responsible for more than the gratuitous wearing of flannel, the death of Kurt Cobain, the rise of Courtney Love, Winona Ryder in general, and the tech boom and subsequent crash. According to Generation X Finance, Gen X'ers may also have caused the current mortgage & housing crisis. How, you ask?

1. We were too darn optimistic.

Generation X Finance:

If we look at the position of Generation X in the economy, a noticeable trendemerges. The majority of those in this generation that attended collegegraduated in the mid- to late-90s. What was the economy doing then? We wereinthe midst rapid technology growth, and the sky was the limit. The economy wason fire, high-paying jobs were almost being handed out upon graduation, and lifecouldn’t have been better for this generation....
..But without being able to experience or understand the effect of inflation rates in the double-digits and what a bear market feels like, this generation had unbridledoptimism as they set out on their own.

Unbridled optimism? Really? Didn't this guy see Reality Bites?

2. We were childless, overeducated, and rolling in the dough.

Gen X Finance:

Without a family or children to support, the booming economy presented opportunities that most young adults could only dream of. Unlike their boomer parents who typically worked blue-collar jobs and didn’t venture far from their roots, many Gen Xers saw an opportunity to take dream jobs almost anywhere in the country.

And lose them one or two years later in the tech crash, causing them to go home and cry to their mamas. I know - it happened to me.

3. We were overly mobile and buying more house than we could afford.

Gen X Finance:

Since people were not often bound to their hometown by a spouse or young child, this allowednew graduates to pick up and move to the hottest areas in the country. Of course, with the salaries being offered and few financial obligations, this meant many could buy the house of their dreams at a very young age.

Ok, maybe I just didn't have the right friends. I had lots of friends that moved to New York, Chicago and San Francisco during this time and none of them bought homes. They either a) couldn't afford to, b) didn't have the credit to, or c) were scared to, knowing their new "dream jobs" could go up in smoke at any minute.

The people I knew who stayed in Knoxville and bought homes, bought small homes that actually had lower mortgage payments than they were paying in rent.

4. We lost our shirts in the tech crash because we didn't see it coming.

Gen X Finance:

Suddenly, those living the high-life are faced with increased expenses and potential income loss. This is a bad situation to be in if you were dedicating 30-50% of your income to housing. Now, the generation that has experienced nothing but good times is completely lost.

I worked for a software company/internet start-up from 1998 to 2001. Trust me, the only people who didn't see the writing on the wall were the 40 and 50 something CEOS with dollar signs in their eyes. The rest of us rode it out, hoping for a decent severance package.

In summary, the Gen X Finance article states:

When you combine a generation of people who were possibly biting off more than they could chew and leaving themselves unable to cope with economic changes, you find the effect on housing, real estate, and credit to be very significant across the board.

Whatever. Maybe I'm prejudiced, but my experience with my generation has been that we are extremely resillient. I would be interested to know how many of the "4 million foreclosures" that McCain talked about today belong to Gen X'ers. And while I'm sure some of us played a part in what is playing out in the US economy right now, I seriously doubt if we, as a generation, caused it. This situation comes down to a lot of bad personal decisions by many different individuals, all of whom didn't want to admit to themselves that if it seems too good to be true, it probably is.

But you can still totally blame Winona Ryder if you want to.

K-Town Makes More Lists

Yesterday I posted about Knoxville making the Forbes list of best places to buy foreclosed homes.

Today the Knoxville News Sentinel says Knoxville has once again made the Forbes lists for best metro areas for careers and best cities to do business:

"A low cost of living, an available work force and the region's location at the intersection of three major interstate highways, are among the factors driving job growth in the area...

The magazine cited the region's relatively low business costs - 14 percent below the national average - as one of Knoxville's strengths."

Knoxville Chamber President and CEO Mike Edwards comments on the rankings to KNS:

"Corporate America continues to look at indicators such as Forbes' rankings and they continue to see Knoxville listed. … These rankings drive interest in Knoxville and people give us a look that they may not have given us years ago."

Knoxville 7th Best Place to Buy Foreclosures

Forbes.com just named Knoxville the 7th best place in America to buy a forclosed home, and no, that doesn't mean our housing market is tanking. It's actually a good thing.

Forbes is saying that Knoxville, and the other 9 cities on their list are places worth investing in not only because their real estate markets are not totally tanked, but also because they're actually showing signs of growth.

According to the article:

"Only today's bravest buyers would consider homes in cities like Las Vegas and Tampa, where rampant foreclosures are sinking already weak real estate markets.

But in markets in other cities, where there are hints of stabilization, foreclosed properties might be a good investment. "

Hey, I'll take a hint of stabilization over signs of certain demise any day.

To come up with the list, Forbes looked at median home price, spread between median prices and foreclosure prices (foreclosure savings), annual foreclosure rate, and median home price change from 2006 to 2007. Here are the stats for Knoxville:

Median home price: $125,150
Foreclosure savings: $30,696
Foreclosure rate: 0.6%
Price change 2006-2007: 3.43%

And yes, that 3.43% price change is a good thing.

I've listed all 10 cities on the list below.

1. Charlotte, N.C.

2. Raleigh, N.C.

3. Nashville, Tenn.

4. Oklahoma City, Okla.
5. San Antonio, Texas

6. Albuquerque, N.M.

7. Knoxville, Tenn.

8. Seattle, Wash.

9. Indianapolis, Ind.

10. Washington-Arlington-Alexandria

Foreclosure: It Takes Two to Tango

There's a great post today over at Generation X Finance about a story that ran on CNN yesterday. The story was about a couple who lost their home to foreclosure and are now living in a camper. On the surface, this sounds like the saddest story in the world. Until you hear the details:

1. Couple buys 2,700 foot home in Las Vegas for $265,000 with a no money down,interest only loan.
2. Thanks to the booming Las Vegas real estate market, the home doubles in value in a year.
3. Wife loses job, and the couple takes out a home equity line of credit to help pay the bills that are piling up, inlcuding the mortgage.
4. Couple tries to sell their home, but the Las Vegas housing bubble has burst.
5. Broke and unable to sell their home, the couple takes out another $35,000 loan to pay the mortgage.
6. Couple home is foreclosed on by the bank and they are now living in a camper.
7. Couple blames foreclosure on lender, saying their loan docs were "confusing and hard to understand."

The bolded parts of this story are the mistakes that Gen X Finances says the borrowers made. I know what I think about all of this and if you read Gen X Finances original post, you'll know what they think too.

What do you think? Were these people taken for a ride by unethical borrowers or did they dig their own financial hole? Should borrowers in general take more responsibility for the current mortgage crisis?

Jan Nielsen's Mad...

...and he's not gonna take it anymore! Mr. Nielsen is a local builder, who, according to the Knoxville MLS, currently has 5 homes for sale in Saddle Ridge in Farragut. I got a mass email sent out by Jan the Builder today and he's not happy about what the media is saying about home prices:

"I am sending this message out of frustration with articles in the media telling us that home prices are down and going further down. Nothing could be further from the truth here in Knoxville.The News- Sentinel, and other media, report prices DOWN over 8% for 2007, but this is based on the Case-Schiller index which measures only the 20 largest metropolitan areas.On the contrary, the OFHEO, which is HUD's office measuring same house sales across the nation, reports that Knoxville had an average appreciation rate of 5.8% UP for 2007.Furthermore, Tennessee was UP (4.1%), our East South Central region was up (4.1%), and the nation was up (0.8%) for all transactions (includes appraisals for refinancing.) You would never guess that 2 out of 3 states reported positive appreciation rates in 2007.You can check this yourselves by visiting ofheo.gov. I bring it to your attention because everyone should know that prices are continuing to go up, not down, in Knoxville."

OFHEO, for the uninitiated, is the Office of Federal Housing Enterprise Oversight. When I actually have time to breathe, I'm going to check out Mr. Nielsen's numbers.

I did have time to check out the House Price Calculator located on their website. According to this nifty tool, my home, which I bought 2nd quarter '06, had a little more than 8% appreciation by 4th quarter '08. I'll take it!

Before You Make That Lowball Offer...

Lowball offers are the new black. Every time I go to the office, I hear another horror story about someone's client who insisted on submitting an obscenely low offer on a home, because said client has heard about how horrible the real estate market is. 9 times out of 10, two things are going to happen in this scenario:

1. Seller counters back at near listing price, offended by the lowball offer.

2. Seller rejects offer outright, offended by the lowball offer.

And a lot of times the buyer winds up losing the house either because someone else submits a reasonable offer, or because negotiations break down due to seller's aforementioned offense at low ball offer.

I blame all this lowballing on the media hype over "the national real estate market." The fact that there is no national real estate market escapes these people's notice (more on that later). Buyers think that the collapsing "national market" means they are going to steal houses in Knoxville.

As I've said here before, just because every business pundit on every news channel in the country is saying the real estate sky is falling, that does not mean that it's falling over Knoxville. Yes, we're in a buyer's market and buyers can definitely get away with asking for more concessions now than they could a few years ago. And that's a great thing for all you buyers out there. But with few exceptions, you're not going to get that $250,000 home for $200,000. Really, you're not. Sellers in some parts of the country may be desperate to sell, but most sellers here aren't. They're just really anxious to sell and there's a big difference between those two.

Having said all that, the lowball offer definitely does not have it's propert time and place. But let's start off by looking at where and when it is not a good idea:

• You really want the house.


• You're doing it "just to see" if you can get it, even though the comps and condition do not support a number anywhere near what you're asking.


• You want/need a lot of concessions from the seller.


• Your agent has strongly advised against it, knowing that you really want the house and/or the comps & condition don't support it.

If any of the above is true, you can stop reading this post and go make a reasonable offer.

If you're still in the running to lowball, you need to find out a few things. Ask yourself and/or your agent the following questions:

• Is the home overpriced?
  

Or maybe even grossly overpriced? Your agent can pull comps for you and help you find this out. If it is, your lowball offer is not really a lowball offer at all - it's a reality check for the seller

• Is the house falling apart, but is priced as though it's not?

Market comps ususally assume a home is in market ready condition. If the seller has priced his home at market, but the roof is falling in and it's 1972 inside, a lower offer might be justified.

• How long has the property been on the market?

The current listing sheet may say the home has only been on the market 30 days. But a quick look in the MLS may show you that this is the 3rd time the home has been listed, and all told, it's been on the market for over a year. Longer time on the market means more negotiating power for the buyer.

• Is the property vacant?

Has it been that way for a while? Nobody likes to have a house sitting empty, epecially when the house is in Knoxville and they are in Honolulu. Insurance companies don't like it either. And nobody likes making two mortgage payments.

• Is the seller motivated?

This is something you can't always know up front. But if you somehow find out the seller is getting divorced/about to go bankrupt and has to move that property, stat, then strike while the iron's hot.

• Are you hoping/needing concessions in the contract?

I mentioned this before, but it bears repeating. This is a can't have your cake and eat it too thing. If you need the seller to pay closing costs or pay for repairs up front, lowball is probably not the way to go. It adds insult to injury.

• Are you prepared to walk away from the house?

Repeat after me: the lowballer shall not get emotionally invested in a property. The lowballer must always be willing to walk. Lowballing is gambling, so be prepared to lose.

Ok, so you've asked the important questions and you have a yes answer to two or more. Now you want to lowball! Slow down, grasshopper. You have one, last very important task to complete -

Find out what the seller owes on the property.

It is very rare that a seller is able to afford to write a check at the closing table, much less agree to do it. In some situaitons coming out even will suit the seller fine, but paying someone to buy their home will not.

Once you know what the seller owes, you and your agent can formulate your offer accordingly

At this point, I will ask you one more favor. Please, please, please, please -

listen to what your agent has to say!

Because you do have an agent, right? And he or she is a professional, correct? Real estate is their job and negotiating contracts is their bread and butter.
If you don't trust your agent enough to listen to their advice, then maybe you should find another agent. Seriously.

Once you have your agent's blessing, go forth and lowball. It's apparently the hip thing to do.

Not Staying Long? Cut Out High End Renovations

Renovators, say hello to Hardy board and goodbye to granite countertops.

According to a new article over on CNNMoney. com, here's what not to do in today's market:

• Buy a home you know you're not going to live in very long.
• Spend oodles of money on high-end updates and renovations.
• Expect to get that money back plus a profit one or two years after you purchase the home.

Yes, a few short years ago you could do all of those things and not only recoup your money, but probably make a profit to boot:

"During the housing boom, updating a kitchen with high end materials like cherry wood cabinets and a Viking stove was a sure bet to boost a home's value. Homeowners often recovered about 80% of the cost when the house was later sold."

That was yesterday.

If you are going to remodel in today's market, and know you won't be staying in your home more than a few years, it might be wise to scale back the scope of your interior projects as well as the type of materials you use.

"...with so much more inventory on the market for buyers to choose from, they [buyers] just aren't as impressed with the bells and whistles. Now most upscale renovations are returning less than 70% of their cost, according to a recent survey from the National Association of Realtors (NAR) and Remodeling magazine."

However, exterior renovations still seem to be paying off:

"...returns for high-end exterior renovations are still holding up, according to the NAR report, with better pay-offs than interior work.
For example, sprucing up a home's look with expensive fiber-cement siding, which looks like wood but is more durable, returns 88% on investment, more than any other renovation NAR evaluated."

Say good-bye to granite countertops - CNNMoney.com

Tennessee Named Among States With Affordable Housing

Brett Arends from The Wall Street Journal Online has a post today on Realestatejournal.com. While the majority of the post deals with answering questions about the overpriced and bursting Florida real estate market, the last question he answers has to do with where consumers can find "cheap" housing:

"While the hot spots on both coasts ballooned wildly during the bubble, the "heartland" remains your classic overlooked value play. In states like Indiana, Ohio, Missouri, Michigan, Georgia and Tennessee, house prices are actually a lot cheaper, compared to personal incomes, than they were thirty years ago. "

Arends goes on to say that affordable housing is a major cost advantage when a company is thinking about where to locate itself. Definitely one of the reasons Knoxville was named best city to relocate to in '07.

More folks and businesses moving our way means a better economy and stronger home sales. Yeah!

Good news on a day with a lot of not so good news.

Q&A: Overvalued Markets; The "Affordable" Mortgage - Realestatejournal.com

Williamson County Makes Forbes List

Here's some good news to start off your work week.

Williamson County, Tennessee, home to Franklin and Brenwood, has just been named on Forbes' new list of "Best Places to Get Ahead" - places where income growth and job growth are highest.

"There are very few economies that have grown as much from manufacturing as those in Tennessee, due, in part, to its more hospitable business environment and less entrenched unions. Williamson County, outside of Nashville, has a median income of $81,449, up almost 18% from 2000. Jobs have jumped 5.5% per year over that time."

Other places that made the list include Stafford County, outside of Washington D.C.; Forsyth County, GA, outside of Atlanta; and Delaware County outside of Columbus, OH.

Best places to get ahead - Forbes.com

Home Shows, Magazines Adapt to New Market

Looks like homeowners and Realtors aren't the only folks having to do things differently since the market started self-correcting. Networks like Knoxville-based DIY and home magazines like Better Homes & Gardens are changing their content to better fit the times:

"Fix-and-flip shows have given way to programs that focus on living more with less, and home magazines increasingly spotlight segments for budget-minded consumers.

'We put much more emphasis now on projects for a mix of budgets,'says Gayle Butler, editor in chief of Better Homes and Gardens magazine."

But that doesn't mean that business is bad. Knoxville-based HGTV's senior VP of content and development says that his network is doing just fine despite the upheavel in various local real estate markets:

"'Does it mean people stop getting married, having children or getting job transfers across the country? No," he says. "We offer property shows that help people, so our ratings have never been stronger.'"

DIY TV, magazines adjust to changing housing market - chicagotribune.com

Lower Median Price Is Not Depreciation

Get ready to get confused.

I was just over at Property Scope and saw this alarming headline-

"Knox Home Prices Fall In January"

Yes, the Knoxville Area Association of Realtors sales data for Jan. '08 is out - let the number crunching begin! Let's read what else Property Scope had to say-

"The median sale price of Knoxville-area homes fell in January.
According to the Knoxville Area Association of Realtors, the median sale price of a two-bedroom home was $66,000 last month, a drop of more than 12 percent compared to the January, 2007, median of $75,700.
Larger homes were off less dramatically. The median price for a three-bedroom was $144,000, down $1,000 compared to a year ago, while the median price for a home with four or more bedrooms was $218,000, also down $1,000."

That all sounds terrible, especially the 12 % in 2 BR homes. What makes me want to tear my hair out is that this article, especially the headline, makes it sound like home values have dropped, when the author is actually talking about a drop in median home prices.

So what's the difference?

A median home price is the halfway point between the most and least expensive homes sold in an area in a given period of time. It is not an average of home sales prices and it is not an indicator of home value, per se. If more people are buying more expensive homes in an area, the median home price rises, just as if more people are buying less expensive homes, the median home price drops. This does not necessarily mean the value of the homes they bought increased or decreased.

What the KAAR median home sales data tells us, is that more less expensive homes sold in Jan. '07 than in Jan. '08.

But the KAAR data also includes average or mean homes sales data. Average home price is calculated by adding all of the sales prices for a type of home together and dividing them by the number of properties sold.

OK, now, let's take a look at average or mean. home sales price in the KAAR data, just for laughs & giggles-

• Average sales price of a 2 BR home was down 7%
• Average sales price of a 3 BR home was down about .03%
• Average sales price of a 4+BR home was up about .05%

So, according to the mean or average sales data, one of these categories actually rose. This could be because property values went up. It could also be for the same reason that some folks don't trust mean sales figures - the most expensive homes tend to skew the data upward (the same can be said for foreclosure or distressed property sales, which skew data downward).

I told you it was going to be confusing.

What is clear is that the Knoxville house market has slowed, at least compared to Jan '07. Days on market is up and there is more inventory. However, as I wrote about last week, the condo market is chugging right along, doing extremely well in spite of all this.

As for your own home, don't lose hope yet. Real estate pricing is a tricky business. Your home's market value depends on many factors -- desirability of your neighborhood, recent neighborhhood sales, updates, general condition, whether or not train tracks were laid in your back yard since you bought it, and, of course, location - not just on KAAR sales data.

Knoxville Condo Prices Strong

Knoxville has always had a great condo market, thanks to an abundance of empty nesters, relocating retirees, and UT students. Now, the latest quarterly survey by the National Association of Realtors (R) shows that our condo market is still going strong:

"The strongest condo price increases were in Bismarck, N.D., where the fourth quarter price of $125,000 rose 20.8 percent from a year earlier,followed by the New Orleans-Metairie-Kenner area of Louisiana, at $173,300,up 17.8 percent, and Knoxville, Tenn., where the median condo price of$160,800 rose 10.6 percent from the fourth quarter of 2006. "

Chalk that up on the "What bubble?" side of the real estate market debate.

Type rest of the post here

Knoxville Foreclosures

Interesting article today on knoxnews.com about Knoxville foreclosures as compared to the rest of the state and country. There's good news and bad news. The bad news is:

• There were 2,770 foreclosure filings in Knoxville in 2007, which is a 47% raise from '06 filings.


• 6 out of every 1000 Knoxville area households entered some stage of foreclosure in '07

Before you head for the hills, here's the good news:

• Out of 100 major metro areas, Knoxville ranks 72 in foreclosures. Compare that with Nashville at 59 and poor Memphis at 13!


• Although delinquincy rates on subprime mortgages in Tennessee as a whole are 3-4% higher than in the rest of the country, delinquincy rates in Knoxville were only 9.9% at the end of '06 as compared to the country's average of 18%.

It goes on to say that there is no glut of foreclosed properties in the Knoxville market, as anyone perusing http://www.firstpreston.com/ can tell you. Again, take a look at the Memphis foreclosures for a comparison. It's night and day.

And although regular home sales were down 10% in Knoxville in '07, we know from KAAR sales data that homes are still appreciating in Knoxville, always a good sign.

So what does this all mean? It means what a lot of people have been saying all along -- Knoxville is a great market. Very few markets in the country will not be affected in some way by what's happened in the mortgage industry, but, relatively speaking, Knoxville is doing pretty durn good. I just don't think the mortgage crisis can keep Knoxville down.

Forgoing Foreclosure - knoxnews.com

Bubble? We Don't Got No Stinkin' Bubble!

The skies may be falling on LA, Las Vegas, and Jacksonville, but as far as I can tell, the sky over Knoxville is pretty much intact. Shaky buyer and seller nerves aside, our market is doing, well, just fine, actually. Don't believe me? No need, for I come armed with fancy numbers from the Knoxville Area Association of Realtors. Ready? Here goes-

• In 2006, the average sales price of a 3 bedroom home in Knoxville was $162,300 and average time on the market for that home was 83 days.
• In 2007, the average sales price of a 3 bedroom home in Knoxville was $170,900 and average time on the market was 92 days.

Now, math was never my strong suit (I know, scary to admit in my line of work), but by my ciphering, that means there was an increase in the price of that 3 BR home. Appreciation, no less! Granted, Mr. Joe Q. Homeowner had to wait 9 extra days to get his check at the closing table, but considering all the doom and gloom coming through the airwaves these days, those numbers don't sound too bad at all to me.