While speaking with a potential seller yesterday about their personal situation and his Gatlinburg real estate, he uttered words I’ve heard more than once recently: “Until the whole world changed…”. He was talking about how his financial planner’s advice to purchase a larger primary residence and also to buy vacation rental properties (which he did) didn’t pan out. This certainly seemed like a good idea back in 2006 when the Smoky Mountain real estate (and in deed most of the country’s) markets were still white hot. Unfortunately now he is at risk of losing it all and his retirement savings are gone like a vapor. I liken the change in our local economy over the past several years to the children’s game of Musical Chairs. Unlike the child’s game in which a single chair is removed each round, the real world had several “chairs” removed all at once. This left lots of participants unable to find a seat thus eliminating them from the “game”. Developers, builders, subcontractors, real estate attorneys, and yes, Realtors all were left scrambling to maintain their share of a dramatically shrunken market. Sadly, four years later the carnage continues and many Sevier County people are still skating around a large abyss of despair.
Within the last month, the principle builder in our subdivision (and the builder of our own residence) lost to the bank a large (but very attractive) unsold spec home that he had been attempting to sell for several years. Sadly his home is at least the fourth property in our immediate neighborhood to have been foreclosed upon by the banks during the past two years. Many builders have retired early or left the area and the remaining builders are VERY tentative when it comes to building new spec homes.
At this month’s Great Smoky Mountain Association of Realtors membership breakfast (held this morning) the atmosphere was something more like that of a morgue. With only 127 residential sales completed during June by the 400+ members of our board, the majority of agents didn’t have a sale last month. While I been extraordinarily blessed to have nearly 80 sales closed or pending this year, most of my real estate peers are truly suffering. Though there are signs that the market is slowly improving, the progress won’t come quickly enough for many market participants.
Non-bank sellers are forced to compete with the foreclosure properties that are priced very aggressively. We have been assigned 8 new foreclosure properties during the past two weeks so the supply of foreclosure real estate won’t go away any time soon. For sellers who aren’t willing (or able) to price their properties at these depressed levels, the chances of a sale are slim to none and “slim” was seen packing to leave.
With all of the above bad news, there is a small silver lining. With sellers dropping their prices sharply, it is in fact a wonderful time to be a buyer. If you have the courage to be a buyer, you are a rare and valuable commodity indeed. In fact, buyers can purchase homes (and commercial properties) for MUCH less than they would have paid a couple of years ago. To view a list of all of the local foreclosures and short sales listed by our office and the other members of our board of Realtors, please click here.