According to statistics generated by the Great Smoky Mountain Association of Realtors (GSMAR) multiple listing service or MLS, during April 2008 our area’s real estate market was at a pace equal to only a little more than a third of sales recorded in the same month during the Gatlinburg/Pigeon Forge/Sevierville real estate boom years of 2005 & 2006. A slowdown in the real estate market isnâ€™t at all peculiar to Sevier County with most of the United States currently feeling the same downturn. The magnitude of the drop in the number of closed transactions locally is however striking:Aprilâ€™s home sales total (including single family homes, condos, and mobile homes with land included) reported by members of GSMAR was the areaâ€™s worst performance in over 4 years. It should be noted that not all sales are made by members of GSMAR and certainly there are some successful for sale by owners and direct builder sales that arenâ€™t accounted for in this summary.
Another type of sale that doesnâ€™t involve a realtor is the foreclosure process that takes place on the county courthouse steps. This is the legal procedure in Tennessee and about half of the rest of the country by which a lender completes the repossession of a property for which the owner failed to make the required loan payments. Known as a trusteeâ€™s sale, 100% of the purchase price is required to be paid immediately at the end of the auction in the form of a cashierâ€™s check. For this reason not many prospective buyers are generally present at this type of sale. Bidding always starts at what the lender was owed after fees and penalties are added. Often the bank was owed more than what the property will bring under the current real estate market conditions and with such a limited pool of buyers.
These properties are then generally offered through a small number of local agents that specialize in this type real estate. For these Realtors, the down market has a bit of a silver lining. Since there are a very limited number of buyers, sellers must price their properties aggressively to sell their homes. Buyers can choose from many available homes and although other factors always are a part of the decision making process (location, schools, curb appeal, etc.) purchasers will often pick the best bargain available. Because the banks are frequently motivated sellers lender owned properties often provide the best value to prospective buyers.
Buying a foreclosure property certainly isnâ€™t for everyone however. The houses are sold as is, with no warranty or statement of condition by the seller. Often repairs are overdue and maintenance has been neglected so an attractive purchase price is required to make allowance for expenses that will likely come up after the sale. Additionally, one has to be prepared to move quickly because well priced properties that represent excellent value generally become pending sales very quickly, sometimes in a matter of hours. Financing however is generally available for individuals with good credit and foreclosure properties often give buyers an opportunity to own real estate at prices not seen in our area in years. With prices lower and interest rates near historic lows will 2008 be the year folks look back at and say â€˜I wish that I had invested in real estate when it was so affordableâ€™?
People will continue to relocate to our area because of the affordable lifestyle of East Tennessee, the mild weather, the low taxes, and our beautiful scenery, and the economic opportunities. When inflation returns, and it will, real estate prices will again move upward and the prices and opportunities of our current market will be only a memory.â€� As luck would have it I happen to specialize in the sale of Sevier and surrounding county foreclosure properties. If you are interested in picking up a real bargain (foreclosure property or otherwise!) please contact us.