Someone Call the Coroner!

August is supposed to be a better month for home sales here in the Great Smoky Mountains region of East Tennessee. In fact, in the 12 years I have worked in the real estate business here in the Gatlinburg area, August has almost always been a very robust month, typically one of the very best of the year. Not in 2008 however, and not by a long shot. August 2008 so far looks like the worst month for residential unit sales in Sevier County and the surrounding area in several years:

With the month having recently ended, it is likely that a few additional transactions will be reported during the next week. For this reason we don't have the final tally but what we do have is enough data to draw a very ugly picture indeed. As of this evening only 106 residential units were reported as being sold in the MLS during the month of August, which represents a staggering 50% decline from August 2007's (which at the time seemed slow) total of 146 homes sold. For a sense of just how far our market has shrunk consider that the monthly record for home sales was set in August of 2005 when area real estate agencies sold a remarkable 322 units. Sadly it has been downhill since then and although there have been a couple of exceptions each month has generally been lower than the previous year's and the trend is undoubtedly toward even lower volumes.

It is important to note however that prices for some types of homes here have not declined. Although most categories of Sevier County real estate have shown price declines over the past two years the exception is the starter/retirement home sector of the market. I'm not talking about vacation rental homes as those have been among the hardest hit. What I'm referring to is true residences at the lower end of the price spectrum. While you could still buy a basic 3 bedroom, 2 bath home in Sevierville for under $100,000 a couple of years ago that is now VERY difficult to do.

Looking forward, I believe that the best area of our market to invest in is this residential (not vacation rental) side of the market. While nobody has a crystal ball my belief is that the smaller 3 bedroom 2 bath residences will continue to hold their value very well. Why? Because of our robust lease type rental market for these homes. If a home can be leased for $800 per month it is no problem to quickly sell the property for $100,000 assuming that the condition is reasonably good. In fact, it is difficult to find any suitable 3/2 or larger home in Sevierville, Pigeon Forge, or Gatlinburg for much less than about $120,000 and the supply of these homes remains very limited. The best way to purchase one of these homes is sometimes via a foreclosure listing which often provides the most attractive prices. As specialists in these foreclosure properties we can help. Just contact us for details and a list of all of the foreclosure properties in our area. Our listings and other firms are both included and this list is updated several times each week so the data is fresh.

Comments

Anonymous said…
Jeff,
Of the 106 sales in Aug. what percentage do you think was Foreclosures? My guess is half. Bob Howard
Bob,

thanks for your comment! I took a look at this and of the 109 total residential sales now reported for the month of August, 24 appear to have been foreclosures. You can also assume that a few more were likely short sales but there isn't any way to quickly determine that number.

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