Although our Smoky Mountain real estate market showed great volume in November, prices haven’t yet risen. In fact, in November, we actually had the lowest average sales price in recent memory for our Gatlinburg area according to our Great Smoky Mountain Association of Realtors MLS database. The new low wasn’t dramatic, as it was just below the average sales price that we saw in April of 2011. If December’s sales volume is good, we will have four of the last six months showing positive comparisons to the values from a year ago. That is particularly noteworthy when you consider that during the first half of the year, five of the six months were in negative territory. Hopefully the improvement in volume will lead to higher prices but it hasn’t started just yet. Here is a chart of the average sales prices for residential sales in our Gatlinburg area real estate market:
Nice informative blog, thanks for sharing.
Jeff – Is it a fair statement to say that there is a large back log of foreclosure properties that the banks have yet to put on the market for the Gatlinburg area? Also, if such a backlog exists, what is your gut feel for how long it would take to work through the backlog? I ask because the if the volume of foreclosures remains steady or increases for the next 2-4 years, it sure isn't going to help reverse the pricing trend you've illustrated above.
Thanks!
Thanks David! Paul, yours IS the really important question. Nobody (not even the banks???) knows what the backlog of foreclosure properties really is and that is what is so very frustrating. I was assigned 3 new properties by Fannie Mae just today but interestingly, all of them appear to be residences, not vacation rental type properties. That is not, however, meant to imply that the remaining foreclosure properties are all (or even primarily) residential type homes. I do know that some of the properties we are seeing have been vacant for a year so one would have to assume that some backlog does exist. The positive news is that activity levels are definitely up, and prices are now well below the cost of replacement and both of these conditions should have a positive influence on prices. My gut instinct is that we have at least another year or two of continued high numbers of foreclosure properties which will doubtless continue to constrain prices.