Knoxville Tennessee Real Estate Blog

I was interviewed yesterday about the state of the greater Knoxville, Tennessee real estate market by Hana Kim, one of my favorite local reporters.

Below is a graph I made comparing this January just past to previous Januarys.

And here’s the story:

By HANA KIM
6 News Reporter

KNOXVILLE (WATE) – The housing market in East Tennessee hasn’t been hit as hard as some of the other cities these past few years.

In fact, new numbers indicate a recent uptick.

A total of 588 home were sold in the greater Knoxville area in January. That’s 90 more homes sold compared to the same month last year.

“I hear a lot of people saying that their activities have increased and that they are showing a lot of people houses. I’ve started off to a good year so far,” said realtor Jim Lee of Realty Executives Associates.

For realtors like Lee, every sale counts, especially in these economic hard times.

“What really is the problem is the high unemployment rate. Even if you could get a house for $50,000, if you don’t have a job you’re not going to qualify for a loan, so your probably not going to buy a house,” said Lee.

That’s why he is grateful for the government’s extension of the first time home buyers tax credit.

“I believe it’s probably driving at least 30 to 40 percent of our market,” said Lee.

Lee says most potential buyers are interested in properties that are $150,000 or less. Most are interested in single family homes, rather than condos or townhouses.

The tax credit is set to end April 30, leaving many to speculate about how that will affect overall sales for the year.

“It’s going to be interesting to see what happens,” said Lee.

If Lee could make a bet, he says, the market will be volatile.

“I think we are going to see a modest increase this year and interest rates remain historically low,”said Lee. 

In the greater Knoxville area, more than 3,600 homes are up for sale and a little more than 1,000 condos are listed.

That level of inventory is normal for this area.

This delightful duplex is near UT and has 1 two BR and 1 1 BR units, will cash flow.

Happy New Years fellow Knoxvillians; it’s now officially 2010.

Following is the latest report from the Knox County Register of Deeds office for real estate transfers (sales) completed last week (January 3, 2010).

I counted 88 property transfers in the past week.

That’s a low number compared to the 150 we have been averaging for all of 2009 but I believe the holidays had more to do with that than other factors.

Are you like me and wondering what the new year will bring for the Knoxville real estate market?

Here’s what I think is likely to happen:

Not surprisingly it looks like the real estate transfers in Knoxville and Farragut Tennessee were down a bit this past week.

I counted 135 with the usual high numbers in the lower price ranges as it’s been all of 2009

I’m very excited for 2010 to begin (which is will in only 4 more days) and see what a new year holds for us.

On one hand interest rates remain very, very low which makes buying attractive. But on the other hand unemployment remains higher than usual in Tennessee although we’re faring better than many other areas.

I believe I’m predicting a modest improvement in the volume of sales with prices still stagnant to downward. A good time to buy if you’re thinking about that. For sellers you have to price your houses competitively and be prepared to deal if you want to sell, you’re facing a lot of competition out there.

Hmmm, “Home sales continue to surge” and rising interest rates. Sounds like the home buying opportunity train is fixing to pull out of the station.

All aboard please.

Great information from Knoxville Realtor Blake Rickels. Knoxville, Tennessee has always been blessed with a fairly stable real estate market no matter what the mythical “national market” is doing.

Sure, we,ve been down like most every other part of the country, just not as far down and now we don’t have as step a climb to make for a recovery.

Knoxville being number 5 in lowest foreclosures is a step in the right direction.

I counted the property transfers published by the Knox County Register of Deeds for the previous week and found 186 which is a little above the 150 or so average we’ve had for all of 2009 so far.

It seems the extension of the homebuyers tax credit is continuing to drive the lower end of our market (the $200,000 and under price points) and the upper end remains sluggish.

I’ve been reading lots of encouraging news about real estate markets all across the county and how they’re seeing increases in sales. Our market has shown one encouraging sign in the past 2 months in that sales have remained high instead of taking their usual seasonal downturn in the fall and winter months.

Let’s hope that trend continues, in past recessions real estate has been the force that drove the recovery.

By now most have probably heard that Congress passed an extention of the $8,000 tax credit for people who buy a home and have not owned one in the past 3 years. Most call it the “first time buyers’ credit even if that is not entirely accurage.

Here’s a list of the relevant changes in the extension that were not all present in the original one.

• Extends the deadlines for purchasing and closing on a home.
• Creates a credit for existing homeowners who buy a new principal residence.
• Raises the income limits for those claiming the credit.

Here’s a few common questions people have had:

Question: If I’ve already purchased a home in 2009 can I apply for the credit now or do I have to wait until I file my 2009 tax return?

Answer: You have two choices; you can either file an amended return for 2008 or just wait until 2009 and claim it then.

Question: I’m in the process of buying right now but have not closed on the purchase. Can I get that credit now so I can use it for a down payment?

Answer: Nope, sorry, you have to actually own the home (have closed) before you can qualify for the credit. However if you live in the state of Tennessee we have a solution for that problem. Our state mortgage funding agency, the Tennessee Housing Development Authority (THDA) will make you a second mortgage of up to $8,000 that you have to qualify for in addition to your new first mortgage which can give you the cash you need to use for a down payment now. You can buy your house, collect the $8,000 tax credit, and then payoff the second mortgage from THDA. I suspect other states have similar programs.

Question: Will I ever have to pay back any of the $8,000?

Answer: Not in most circumstances, there is one exception however. If the home you buy and claim the tax credit on stops being your principal residence anytime within 36 months (3 years) of the date of purchase you would then be required to repay whatever portion of the credit you had collected.

Question: I noticed the extension provides that existing homeowners can also claim a tax credit if they buy a replacement home anytime after November 6th, 2009. I’ve tried to sell mine and can’t so we rented it. Could I still qualify for the $6,500 credit?

Answer: Yes you can. Existing homeowners do not actually have to sell their current home in order to qualify for their credit. The only requirements are that the house you buy be your new principal residence and that your former residence had been your principal residence for any 5 of the past 8 years.

Please call or email with any more homebuying questions.

Browse all of the homes for sale in the greater Knoxville area at www.KnoxvilleHomeCenter.com