Two Local Banks on Troubled Bank List
With development money now harder to obtain by would-be buyers and prices having declined most of these johnny come lately developers have ground to a halt and fortunately the banks have now ceased lending for new projects. Unfortunately, this is much akin to shutting the barn door after the horse has left the barn because the damage has already been done. In some developments fraud appears to be involved and homes in the most obvious cases are selling at only around 50 cents on the dollar. In fact, many foreclosures (where no apparent fraud exists but significant over exuberance was present) are now selling for only about half of what they did at the peak of the market in 2005-2006.
While I am not anticipating the failure of either of my favorite local banks there is an important lesson to be learned here. When everyone is trying to enter a market it is a good time to be exiting. Conversely, when the panic and apprehension are the highest is the time to be brave and find a way in. This is exactly the situation that we have now. With November's volume up significantly from last year's frighteningly low level we are now set to have FIVE consecutive months of positive comparisons to last year's residential sales volume. Of course, we are comparing to a very weak period so we had BETTER be showing gains or many more realtors would be out of work. Generally volume has to increase before prices can so this is a VERY good sign. With interest rates at all time lows this may indeed be a great time to invest in Gatlinburg area real estate.