In 2003 only 6% of my sales were bank foreclosures (otherwise known as REO properties). In contrast, by 2009 a full 95% of our transactions were bank owned properties. It isn’t what I would prefer but rather that the market always dictates what we sell. In the Smoky Mountains of East Tennessee, foreclosures were what nearly everyone wanted in 2009. The market here in the Gatlinburg area was improved over last year’s morbid results but won’t recover back to the heyday levels attained in 2005-2006 for a very long time. Average sale prices are down, commission rates are lower, and the business just isn’t as pleasant as it was on the way up.
For 2010, I see more of the same with additional properties reverting to bank ownership as option ARM and other loans go into default. Unlike some areas of the country however, these exotic loan programs weren’t as common here as they were in some communities. Our Gatlinburg area real estate market will likely continue to be held back by foreclosure properties but the banks may not be willing to blink as they sometimes have in the past. With volume picking up, it appears that the Gatlinburg area real estate market bottom (in terms of number of units sold) is now over a year behind us. This should mean that prices will continue to increase which is finally happening slowly. If you are thinking that you will be able to buy a bank-owned property for 20% less than the asking price, you are probably, as we like to say here in the country, “barking up the wrong tree”.
We do now have 10 listings that are already pending sales. There are, however, still some very attractive bargains available here in our Gatlinburg real estate market listed by us and other firms. To see the homes that we have listed that aren’t yet pending sales, please click here.