It is abundantly clear to me that Gatlinburg real estate prices will not begin to recover significantly until the deluge of foreclosure properties dumped onto the market each month subsides. Unfortunately, that is not yet the trend and as long as foreclosures of Sevier County properties continue at the current pace prices will continue to be flat at best. Below is a chart showing the number of foreclosure filings (not including time share properties) by month for the past several years. As you can see, August’s 135 new foreclosure filings, while less than June’s record number, are back above the number we saw in July. This indicates that, as sad as this makes me, we are still experiencing an upward trend in the number of Sevier County real estate foreclosure filings.
The market supply of residential properties in our Great Smoky Mountain Association of Realtors database when compared with sales during the past 12 months is still measured in years, not months. A real estate market is generally considered to be evenly balanced between buyers and sellers when the supply is around 6 months. By comparing the 1268 homes sold during the past year in our East Tennessee market with our current market supply of 3867 a market supply of 3.05 YEARS is revealed. While sales are slowly trending upward, prices will probably take a while longer to start moving upward again. I am still very positive on the long term aspects of our Gatlinburg area real estate market. What else can you think of besides real estate that is selling for much less than it did two years ago? I firmly believe that we will see serious inflation over the next several years and that we will eventually look back at the current market conditions and say “Why didn’t we buy more then??”.