Looking at our Smoky Mountain real estate stats it is very clear to me that the very style properties that were the most popular years ago are now the type homes that are the toughest to sell at any sort of premium price. Two or three years ago, it seemed that local builders could never construct enough of the really small cabins. When I say small, I am speaking of tiny homes, sometimes with less than 500 square feet of living space. These homes were usually log cabins, on small lots in resorts or other communities, and two years ago they were as the old saying goes, “Hotter than pancakes!”. Some of these very small homes were generating over 250 rental nights annually and the financial justification for this type investment was absolutely compelling. At the peak of the insanity, some of these infinitesimally small cabins were selling for over $250,000 or even more and the demand for additional cabins seemed unquenchable.

How time changes things! I remember telling buyers a couple of years ago to be careful of the very small cabins – some without even a single bedroom. The typical floor plan (if you could call it that) was a single room cabin with a kitchen in one corner, a fireplace in another, a bath in the third corner, and a jacuzzi style tub in the fourth corner. The first thing that one noticed if you could look past the great rental numbers was that there was absolutely no room for any sort of storage. Many cabins didn’t even have a single closet but rather a pole stretched across a corner of the room or possibly an armoire. Obviously, these homes have no possible use other than as a vacation home. They certainly can’t be rented as residences due to the tiny kitchens and the total lack of any sort of storage.

Additionally, the log type construction makes remodeling or any adding of additional living space very problematic and expensive. Besides the structure, the other part of a real estate investment that accounts for value is the land involved. Sadly, many of these homes have postage stamp sized lots that don’t allow for the addition of a garage or carport or adding to the home itself.

While these homes were great vacation rental units they make miserable properties for any other use. The high maintenance exteriors make them unsuitable for traditional rental property investments so what else can one do with them? This is the question I asked folks as the prices went from ridiculous to sublime. Now that concern is a reality due to the overbuilding of this type home. There is no other suitable use for these very small homes and the market is severely punishing this type home if it doesn’t have a view or rent exceptionally well.

For the entire thirteen years I have been in the business of marketing Sevier County real estate I haven’t seen a tougher market. While this currently is not something peculiar to our area, it is also the first time that even oldtimers have seen a down market here. Folks who have been involved in our Gatlinburg/Pigeon Forge/Sevierville real estate industry for many years say that they have never seen anything like what we are looking at now. With nine foreclosures posted in today’s newspaper alone, we are looking at a very difficult market if you are a seller.

Bright spots? If you are a buyer this is a fabulous time to be looking. Motivated sellers are not hard to find and listings are plentiful. While the premium properties aren’t being punished anything like the small, specific use type cabins are, there are bargains everywhere. If you are interested in buying a home for 20% less than what it sold for just a couple of years ago that can now be done in some areas of the county. In fact, I’ve never seen a better time to be a buyer and am looking for something to buy for myself right now. If you’ve always dreamed of having a home in the mountains this just may be the best opportunity we will see for a very long time. If we may assist in any way with any property here, please let me know. Even if you are looking to sell, we will be glad to help – but you will probably need to be patient!