Knoxville Tennessee Real Estate Blog

Here’s the latest update on the Knoxville area real estate market. This week’s real estate transactions from the Knox County Register of Deeds is below.

Weekly closings report from the Knox County Register of Deeds.

It appears that closed transactions stayed about the same as previous weeks; this week saw 124 total with the $100,000 to $150,000 price ranges still leading the pack. The upper end market remains flat.

Calculating the absorption rate in the 1 million dollar or higher price range we see a total of 11 closed transactions so far this year in Knox County. The Knoxville Area Association of Realtors MLS currently shows a total of 115 single family residential listings in that price range for Knox County. At the current rate of sales it will take the Knoxville area market 52.2 months or about 4.3 years to absorb (sell) them assuming no new listings come on the market at that time.

Some say the market is getting better. I wish I could join in their optimism but the facts just don’t support that notion at this time. Here’s what the Knox County Register of Deed’s weekly reports in the Knoxville News Sentinel look like for the year.

Weekly closed transactions from the Knox County Register of Deeds

Anecdotal stories like “we’re getting more phone calls in our office” or “I sold two houses last month” just don’t seem to be turning into a rise in sales for the area as a whole yet.

Here’s a tidbit straight from the horse’s mouth: “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around,” said Lawrence Yun, chief economist for the National Association of Realtors.

Currently in the MLS there are 4,084 single family residential listing and another 1,089 condos for a total number of 5,173 homes for sale in just Knox County. As of May 31st I see a total of 1,650 closed sales year to date which is a 330 monthly average.

At that rate of sales it will take the Knox County market 15.6 months or just over a year, to sell today’s inventory at the current rate assuming no new listings come on the market which is not realistic since we average adding 2 to 4 thousand new listings a month!

Got a house in the greater Knoxville are you need to sell? My best professional advice is to hold off a few months if you can.

Unfortunately some sellers can’t wait and have to sell now so what do they do? Here are some things, based on my experience, that will tip the odds of selling in your favor:

• Number one on my list would be a very aggressive list price. I’m seeing homes on the market now that are not selling for what the owners paid for them as long as 3 years ago. If you’re a seller you’re competing with both a lot of other houses and the continuing stream of bad economic news that your potential buyers are bombarded with day after day. “Layoffs, hundreds lost jobs, downturn, worst economy in (take you choice of numbers), recession, etc.” It’s no wonder buyers are scared to buy if they can’t have confidence they’re have a job next week or next month.
• I also believe it’s equally important that you do whatever it takes to put your house in showroom condition. You have probably seen what auto dealers do with late model trade in cars. If you haven’t, they shampoo or replace the carpets in the car including the trunk, wax and buff the exterior until it shines, steam clean the engine, shine up the tires, and generally make it as appealing as possible and as close to new looking as they can get it. You have to do the same with your house. Stop thinking about it as the place you’ve had Christmas with your family, watched your kids take their first steps, and other emotional ties and start thinking of it as a piece of merchandise you’re trying to sell. I have a free 52 page eBook titled “450 ways to make your home sell faster!” I’ll be happy to send you if you’ll just send a blank email to:[email protected]
• Offer some buyer incentives, especially important in the lower price ranges. With all the news about the mortgage market lenders are more strict than ever about buyer requirements. Whereas in the past they used to use a magnifying glass on buyers they’re now using microscopes and requiring more documentation. I recall a transaction I had that closed last week and I had to prove I was not the Jim Lee on the FHA mortgage fraud watch list and submit an affidavit that I had never lived in a certain city in Illinois. And I was not even a buyer or seller in this transaction; just the buyer’s agent.
• Be prepared to accept an offer from a qualified buyer that may be below your list price by a large discount if you want to sell. Buyers read the news too and realize they are in the driver’s seat. Having your house in showroom condition, aggressively priced, and perhaps offering to throw in 3-4% of the sales price to help a buyer get in very often makes the difference between a buyer and a ‘just looking’ prospect.
• Exposure to as many potential buyers as possible. Common sense says that the more people that are aware something is for sale and want that thing, the more it becomes worth to them. Right now over 80% of all buyers are looking on the Internet for houses for sale. If you’re house doesn’t have a good presence with lots of photos AND MOST IMPORTANT, isn’t easily findable by potential buyers, you’re not going to be able to create that demand that brings the best possible price no matter what the economic conditions and how much competition you may have.

Thinking of buying a home in the greater Knoxville area. NOW is the time if you have a steady job and good credit. It is a strong buyer’s market right now and conditions for buying may never be this good for you again.

Here’s what you have going for you as a buyer right now:

• The lowest interest rates in history which can give you a house payment cheaper than rent.
• A huge backlog of unsold homes with motivated sellers offering big discounts and/or buyer incentives to get their homes sold.
• The $8,000 federal tax credit some buyers that have not owned a home in the past 3 years can collect up until December 1st of this year.
• A number of other incentives designed to attract buyers such as the Tennessee Housing Development Authorities (THDA) program to advance buyers up to 3 1/12% of the purchase price as a down payment and then be repaid when that buyer collects on their tax credit.

Take a look at KnoxvilleHomeCenter.com to see what’s for sale in your price range and then let’s go pick one out.

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The Knoxville area sales statistics are out now for the month of April. So what do the numbers look like compared to previous Aprils?

Traditionally in April the spring sales season is humming right along with the birds and bees. Unfortunately the past few Aprils have seen more of a nosedive than an increase in volume of sales. Here’s a comparison of April sales volume for the past 11 years.

Knoxville, Tennessee April sales figures

This chart displays over a 45% drop in sales volume in 2009 compared to April of 2005 and a 27% decline from April of 2008.

So what’s going on with prices? Are prices of Knoxville area homes taking a similar dip. Fortunately they are not. Even though the average sales price of a typical 3 bedroom Knoxville home is $151,300 compared to a peak of $168,300 in April of 2007 those numbers just mean we’re selling lower priced homes more than upper bracket sales.

3 bedroom home sales, Knoxville, Tennessee area for April.

In previous posts I’ve listed the reasons I believe sales of lower priced homes were higher than upper bracket ones and here they are again:

• Lowest interest rates in history. Renters can now usually buy a comparable sized home for less monthly payment than they’re currently paying in rent.
• An $8,000 federal tax credit for a huge majority of buyers today.
• A big selection of homes including short sales and foreclosures, with owners willing to help with buyer’s closing costs to encourage them to buy their properties.

It’s sort of a ‘perfect storm’ for homebuyers right now.

So if you need to sell a house or condo in the greater Knoxville area today what can you do? We’ve also discussed that in previous postings and here’s that list of tips again:

• Number one on my list would be a very aggressive list price. I’m seeing homes on the market now that are not selling for what the owners paid for them as long as 3 years ago. If you’re a seller you’re competing with both a lot of other houses and the continuing stream of bad economic news that your potential buyers are bombarded with day after day. “Layoffs, hundreds lost jobs, downturn, worst economy in (take you choice of numbers), recession, etc.” It’s no wonder buyers are scared to buy if they can’t have confidence they’re have a job next week or next month.
• I also believe it’s equally important that you do whatever it takes to put your house in showroom condition. You have probably seen what auto dealers do with late model trade in cars. If you haven’t, they shampoo or replace the carpets in the car including the trunk, wax and buff the exterior until it shines, steam clean the engine, shine up the tires, and generally make it as appealing as possible and as close to new looking as they can get it. You have to do the same with your house. Stop thinking about it as the place you’ve had Christmas with your family, watched your kids take their first steps, and other emotional ties and start thinking of it as a piece of merchandise you’re trying to sell.
• Offer some buyer incentives, especially important in the lower price ranges. With all the news about the mortgage market lenders are more strict than ever about buyer requirements. Whereas in the past they used to use a magnifying glass on buyers they’re now using microscopes and requiring more documentation. I recall a transaction I had that closed last week and I had to prove I was not the Jim Lee on the FHA mortgage fraud watch list and submit an affidavit that I had never lived in a certain city in Illinois. And I was not even a buyer or seller in this transaction; just the buyer’s agent.
• Be prepared to accept an offer from a qualified buyer that may be below your list price by a large discount if you want to sell. Buyers read the news too and realize they are in the driver’s seat. Having your house in showroom condition, aggressively priced, and perhaps offering to throw in 3-4% of the sales price to help a buyer get in very often makes the difference between a buyer and a ‘just looking’ prospect.
• Exposure to as many potential buyers as possible. Common sense says that the more people that are aware something is for sale and want that thing, the more it becomes worth to them. Right now over 80% of all buyers are looking on the Internet for houses for sale. If you’re house doesn’t have a good presence with lots of photos AND MOST IMPORTANT, isn’t easily findable by potential buyers, you’re not going to be able to create that demand that brings the best possible price no matter what the economic conditions and how much competition you may have.

As always, KnoxvilleHomeCenter.com is a good place for buyers to begin their search and sellers to find lots of specific tips and advice on what you can do to get your home sold.

Before becoming a Realtor many, many years ago, I was in the restaurant business, mostly in management but I love to cook and create new recipes. Here’s a couple of my summer favorites that meet 2 of my main criteria for cooking; quick and easy.

Pulled BBQ pork, serves 4

You can fix this one in your crock pot or slow cooker.

Ingredients:

• 2 pound Boston Butt Roast or boneless ribs work well also
• Salt and pepper to taste
• 1/2 a 14 ounce can of beef broth (you can freeze the other half for later use)
• Your favorite BBQ sauce
• To give it an interesting flavor save a couple of Tablespoons of brewed coffee and toss it in

Preparation

• Put the roast or ribs in your crock pot or slow cooker, pour beef broth and optional coffee over.
• Cook on low setting for 6-8 hours or until meat is fork tender (separates easily with fork)
• Remove to cutting board and pull apart with two forks or you can chop with a large knife like an 8 inch french cooks knife.
• Serve with BBQ sauce on the side or poured over. You can also mix BBQ sauce with meat in advance and pop in the oven for about 10 minutes but most people like to add their own sauce.

Serve with cole slaw and BBQ fixins’ like baked beans, potato salad, or chips.

Marinated Grilled Shrimp, serves 4 (I got this one from All Recipes.com which is a great source of awesome dishes.

Ingredients:

• 2 cloves garlic, minced
• 3 tablespoons and 1-3/4 teaspoons olive oil
• 2 tablespoons and 2 teaspoons tomato sauce
• 1 tablespoon and 1 teaspoon red wine vinegar
• 1 tablespoon and 1 teaspoon chopped fresh basil
• 1/4 teaspoon salt
• 1/8 teaspoon cayenne pepper
• 1-1/4 pounds fresh shrimp, peeled and deveined
• skewers

Preparation

1. in a large bowl, stir together the garlic, olive oil, tomato sauce, and red wine vinegar. Season with basil, salt, and cayenne pepper. Add shrimp to the bowl, and stir until evenly coated. Cover, and refrigerate for 30 minutes to 1 hour, stirring once or twice.
2. Preheat grill for medium heat. Thread shrimp onto skewers, piercing once near the tail and once near the head. Discard marinade.
3. Lightly oil grill grate. Cook shrimp on preheated grill for 2 to 3 minutes per side, or until opaque or pink.

Bon Appetit!

KnoxvilleHomeCenter.com also has some great houses just in case you need a backyard to put that grill in.

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The past weeks real estate activity showed a little bit higher activity with 160 Knox County real estate transfers recorded at the Knox County Register of Deeds office.

Knox County, Tennessee real estate transfers

As in previous weeks, the ‘action’ remains in the lower to mid price ranges with the $100,000 to $150,000 price points dominating the statistics. I believe this is being driven by:

• The lowest interest rates in history which can give you a house payment cheaper than rent.
• A huge backlog of unsold homes with motivated sellers offering big discounts and/or buyer incentives to get their homes sold.
• The $8,000 federal tax credit buyers that have not owned a home in the past 3 years can collect up until December 1st of this year.
• A number of other incentives designed to attract buyers such as the Tennessee Housing Development Authorities (THDA) program to advance buyers up to 3 1/12% of the purchase price as a down payment and then be repaid when that buyer collects on their tax credit.

One puzzling thing to me is that typically a sale of a lower priced home used to result in that successful seller moving up into a bit higher priced home and that doesn’t seem to be happening here. I wonder where all these sellers of $100 to $150,000 homes are going?

If you’re a buyer in any price range there are some excellent homes to choose from; here’s the Knoxville Home Centers ‘catalog of homes’ to browse.

Call me at (865) 693-3232 or email to take a look at any of the homes displayed. Here’s a few that look especially appealing.

Appealing 3 bedroom, 2 bath, and just $124,900

This all brick beauty is in a convenient location and offers 3 BRs, 2 Baths, and a bargain price tax of $139,900

West in the Cedar Bluff/Karns area, a 'short sale' at only $134,900

You hear the words “short sale” a lot these days in conjunction with Realtors and real estate sales but just exactly what is a “short sale”.

Very simply put, a short sale is a sale of real estate in which the mortgage lender (or sometimes lenders) agree to take less than the mortgage balance in order to get that home sold.

If you’re like most people, your first question would be: “Why would a lender that has a security interest (mortgage) in a house even think about taking less than is owed them?”

And there are several answers but the most realistic one is money.

If a lender forecloses on a home in today’s market they can expect to lose about 55% of their investment after all the expenses required to get legal ownership of a house from the former owner(s).

If they’re able to work with the homeowner and do a short sale for a reduced price and payoff, their losses only amount to around 35% of their investment. So you do the math; would you rather lost 55% of a $250,000 house or $137,500 in real dollars or cooperate with a new buyer and the old owners, 35% less and “only” lost $87,500? The difference is $50,000 per transaction so it’s pretty clear why lenders would even consider a short sale over foreclosure.

One very real problem we have to deal with is that the sheer magnitude and volume of homes involved in the housing crisis has overwhelmed lenders who are suddenly faced with massive delinquencies, mortgage holders losing their jobs, declining values, and tightened credit and lending guidelines from the federal government.

Some call this market the “New Wild West” and it is definitely a new frontier. I have been a real estate broker for over 30 years now and I’ve never seen a market as volatile and confused as the one we’re in right now.

According to a member survey by the National Association of Realtors (NAR), 54% of all Realtors have been involved in a short sale in the past 12 months. 94% of that number said a “lack of response from lenders” was the chief obstacle that hindered or prevented them from closing the sale at any price. In those situations everyone loses.

Realistically doing a short sale in today’s real estate market can take from 2 to 4 months under ideal conditions even if you’re working with a seasoned real estate professional with short sale experience.

If you’ve fallen behind on your mortgage payments you also have some alternatives to jumping into a sale of any sort.

For step 1 I recommend you contact your lender and see if you might qualify for a loan modification program at a lower interest rate or payment. I know of a recent case where a homeowner was able to get her mortgage interest rate reduced to 2% for the next 5 years and then a fixed rate of 4.75% for the remainder of the loan. This loan modification reduced her house payment by almost half!

If you don’t qualify for a loan modification for whatever reason, a short sale could be your best alternative to foreclosure.

If you would like some information or think your home might qualify for a short sale, call me and we can find out together. All calls are confidential and there is no costs or obligation to you to see what your options might be. I have completed and closed transactions where a short sale is involved and have completed training and courses as a Certified Short Sale Professional (CSP).

eMail Jim today or call (865) 693-3232 and ask for Jim Lee.

www.KnoxvilleHomeCenter.com

The past week looks a bit worse than the week before with the volume of transfers down to 78 from the previous weeks 138.

only 78 Knox County Real estate transfers recorded for the week of May 10th

This market has created the proverbial “Perfect Storm” for home buyers. Lots of home for sale (Today there are 5,124 active single family and condominium homes for sale just in Knox County) and 78 recorded transactions last week so it’s very clearly a strong buyer’s market.

Financing remains in the sub 5% range for most price ranges with some great 100% financing available for buyers able to use the Tennessee Housing Development Authority (THDA) program.

Those smart folks at THDA have a new program that actually lends you up to the 3..5% of your down payment (which coincidentally happens to be the minimum down for FHA financing) at 0% for up to a year and you can repay them when you file your taxes and collect that $8,000 tax credit the federal government is offering for qualified buyers that have not owned a home in the past 3 years.  Regular conventional buyers also can qualify for the 8K tax credit as well.

All you need is a minimum 620 credit score and a debt to income ratio below 45%; call me if you’re interested and I’ll explain how it works; easy for most people to qualify.

Here’s a few listings you can buy right now that fit into this program’s guidelines.

This charming Cape Cod styled home is priced at only $129,900. Ask about $0 down financing and a principal and interest payment under $600 a month!

This excellent basement rancher is priced at only $149,900 with 3 bedrooms, 2 baths, and a two car garage.

This charming older home was listed for $84,900 and not surprisingly just sold.

Visit www.KnoxvilleHomeCenter.com to see over 5,000 Knox County homes for sale as well as other nearby areas such as Maryville, Oak Ridge, Loudon County, and many others.

Wow, it’s hard to believe May is already here; this year is flying by.

Unfortunately Knox County and Knoxville homes aren’t flying to sale quite as quickly as the year is passing; here’s the latest data on recorded real estate transfers at the Knox County Registrar of Deeds Office. There were 138 total transfers, about the same amount as in recent weeks, no big gains but no big drops either.

Lower priced Knoxville homes continue to sell far better than higher end ones.

Looking for a new home in the greater Knoxville area? Fill out this form, no cost, no obligation, and I’ll email you the most recent list of homes current for sale that meet only YOUR criteria and in the areas YOU want to be.

If you want to look for yourself, www.KnoxvilleHomeCenter.com is a great place to being the process. NO REGISTRATION required to see every Realtor listing in the Knoxville area.