Local Housing Market Insights:
I have been a real estate agent here in the Smoky Mountains for many years now. My background in East Tennessee real estate has allowed me the opportunity to build relationships and establish a long list of both buyers and sellers that have come to trust my opinion in regards to the local real estate market. Lately, I have been repeatedly asked the same question: “Jared, what’s going on with the housing market?”
It’s not been an easy question to answer as the trusty old real estate crystal ball that we keep at the office is murky and hard to read with the national economy in a state of flux. Interest rates were at historic lows in 2021, and then they climbed to their highest levels in years in the early part of 2022. High gas prices, increased construction material prices, rising food prices, continued labor shortages and upward inflation have all had an impact on both the national and local real estate markets.
I have been doing this long enough that I have first hand experience in an up market, a down market, a buyer’s market, a seller’s market, and pretty much everything in between. So, that being said, here is what I have been answering clients who ask me, “What’s going on with the housing market?”
If you own a property here in the Smokies and you are considering selling, it is still a great time to list your property. Potential sellers will have to accept the fact that they missed the peak of the real estate market. This is a critical first step. When pricing your home, you should use the most recent comparable sold home data versus data from a few months ago. Home sale prices hit an all-time high in our market around February of 2022. In March of 2022 we saw a significant rise in mortgage interest rates which translated into a significant decrease in buyer demand for properties. We started to see home listing price drops in April, and have continued to see lower listing prices and longer periods on market for sellers.
It is not all doom and gloom though. Yes, as a seller you missed the peak of asking prices for homes, but home prices are still up significantly from 2015-2020. We are also seeing a significant uptick in the amount of buyers coming back into the market in recent weeks. So, in short, prices are still up, Buyers are starting to come back, and the inventory of homes available for sale is still extremely low here in our market. As long as you price your home correctly, and are willing to be negotiable with a potential buyer, now is an excellent time to sell.
If you are a buyer looking to invest, or buy a residence, your timing is good as the market has shifted somewhat in your favor. Prices have come down and sellers are significantly more negotiable in the current market than they were earlier this year. Although it appears we are heading towards more of a “buyer’s market”, we are not quite there yet, so now would not be the time to low ball or bargain aggressively in most cases. We have had recent success in getting accepted offers for our buyers in which the seller is willing to go below listing price, and, in some cases, offer concessions towards buyer closing costs, repairs etc. Although prices are still up from previous years, buyers are gaining more negotiating power on offers that are being submitted.
The key for our investor clients to getting a good buy right now is making sure that you work closely with your agent to look at recent sold comparable property numbers, getting detailed rental history/projections, figuring out average monthly expenses, having a good home inspection done on the property, and gathering a myriad of other details to insure that the property is one that makes financial sense. The same applies for our residential buyers looking to call the Smoky Mountains their home. Our team can help determine your ideal location, research comparable sold property numbers, and help discuss future resale value of the property to make sure it is a good fit.
Another key component is to work with a good lender. Yes, interest rates are up, however, many lenders are offering creative programs like DSCR loans (rental income is factored in), or some buyers are also exploring 5-to-7 ARM loans to get a lower rate. Talking to a lender about what makes the most sense is critical, as buying an investment property or permanent home here in the area is one of the bigger life purchases that people make.
So, in summary, I will say that the market is good for both buyers and sellers at the moment. Sellers are still seeing their properties sell for higher prices than previous years, and buyers are winning as they now have an opportunity to be able to negotiate somewhat on properties and find some smart buys. Our team prides itself on being a team of honest and hardworking agents.
Please reach out to us directly if you would like to discuss your specific situation, and we will work hard to earn your trust.