865 Real Estate

East Tennessee Real Estate & Neighborhood Source

2 Markets. 2 Different Directions. Luxury vs. Starter/Trade-Up

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The Tale of Two Markets [INFOGRAPHIC] | MyKCM

Some Highlights:

  • An emerging trend for some time now has been the difference between available inventory and demand in the premium and luxury markets and that in the starter and trade-up markets and what those differences are doing to prices!
  • Inventory continues to rise in the luxury and premium home markets which is causing prices to cool.
  • Demand continues to rise with lower-than-normal inventory levels in the starter and trade-up home markets, causing prices to rise on a year-over-year basis for 80 consecutive months.

Have questions about the market, the value of your home, or whether it’s a good time to buy or sell a home? Call or text Troy Stavros with CornerStone Realty Associates directly at 865-999-0925 or through our contact form.

2008 vs. Now: Are Owners Using Their Home Equity as ATMs Again?

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Over the last six years, we have experienced strong price appreciation which has increased home equity levels dramatically. As the number of “cash-out” refinances begins to approach numbers last seen during the crash, some are afraid that we may be repeating last decade’s mistake.

However, a closer look at the numbers shows that homeowners are being much more responsible with their home equity this time around.

What happened then…

When real estate values began to surge last decade, people started using their homes as personal ATMs. Homeowners would refinance their houses and convert their equity into instant cash (known as “cash-out” refinances). Because homes were appreciating so rapidly, many homeowners tapped into their equity multiple times.

This left homeowners with little-or-no equity left in their homes, so when prices started to fall many homeowners found their houses in a negative equity situation (where the mortgage amount was greater than the value of the home). When some of these homeowners saw that there was no value left in their houses, they just stopped paying their mortgages altogether.

Banks eventually foreclosed on those homes and the foreclosures drove prices down even further and put more homes in the negative equity category. This cycle continued, leading to the worst housing crash in almost one hundred years.

What’s happening now…

Again, Americans are seeing their home equity grow. Today, over 48% of all single-family homes in the country have over 50% equity, and yes, some families are tapping into that equity. However, this time around, homeowners are not making irresponsible decisions. According to the latest information from Freddie Mac, the total equity being “cashed out” is a fraction of what it was leading up to the crash. Here are the numbers:

2008 vs. Now: Are Owners Using Their Homes as ATMs Again? | MyKCM

Bottom Line

The recklessness that accompanied the build-up in equity prior to the last crash does not exist today. That makes this housing market much more secure than the one we had heading into 2008.

108 Telemann Lane, Oak Ridge, TN 37830 – CornerStone Realty Associates

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You’ve found it! Your convenient cabin in the woods that is only minutes from everything you need. Tucked away at the end of a cul-de-sac in Oak Ridge’s Burnham Woods subdivision you’ll find this slice of Tennessee heaven. Literally minutes to shopping, restaurants, and ORNL. This custom built log and stone home features over 3000SF, 5 bedrooms and 3 full baths. Entertain or spread out in 3 separate living areas. Two on the main level feature stone, wood burning fireplaces. The lower level’s extra large rec room is ready for a wood burning stove and and has a separate entrance. Kitchen comes complete with stainless steel appliances. Long covered front porch plus enjoy complete privacy on the covered back porch. 1 car garage. This home was completely remodeled less than 2 years ago.

108 Telemann Lane, Oak Ridge, TN 37830

$229,000
Property Type: Single Family Bedrooms: 5 Square Footage: 3,164 Lot Size (sq. ft.): 30,492 Status: Closed
Current Price: $229,000 List Date: 12/05/2018 Last Modified: 12/21/2023

Description

You've found it! Your convenient cabin in the woods that is only minutes from everything you need. Tucked away at the end of a cul-de-sac in Oak Ridge's Burnham Woods subdivision you'll find this slice of Tennessee heaven. Literally minutes to shopping, restaurants, and ORNL. This custom built log and stone home features over 3000SF, 5 bedrooms and 3 full baths. Entertain or spread out in 3 separate living areas. Two on the main level feature stone, wood burning fireplaces. The lower level's extra large rec room is ready for a wood burning stove and and has a separate entrance. Kitchen comes complete with stainless steel appliances. Long covered front porch plus enjoy complete privacy on the covered back porch. 1 car garage. This home was completely remodeled less than 2 years ago.

More Information MLS# 1063797

Location Tax Legal Info

House #: 108 Street Name: Telemann St Suffix: Lane State/Province: TN Zip Code: 37830 Property Sub-Type: Residential PIN #: 105f A 028.00 Subdivision: Burnham Woods Geo Lat: 35.999928 Geo Lon: -84.273607

Contract Info

Auction Y/N: No Listing Price: 230000 Current Price: $229,000 Status: Closed Listing Date: 2018-12-05

General Property Description

Type: 2 Story Acres: 0.7 Site Built: Yes Restrictions: Yes SqFt - Total (Aprox): 3164 SqFt - Main Lvl: 1750 SqFt - Down Lvl: 1414 # Bedrooms: 5 Baths - Full: 3 # of Rooms: 10 Fireplace: Yes # Fireplace: 2 Property Status: N/A HOA: No Year Built: 1987 Bonus Room: Yes Extra Storage: Yes

Status Change Info

Status Change Date: 2019-03-11 Under Contract Date: 2019-01-03 Sold Date: 2019-02-28 Sold Price: $229,000

Sewer

Sewer Info: UTILITY

Water

Water Info: UTILITY

Property Features

Style: Log; Traditional Construction: Log Siding: Log; Stone Basement: Finished; Plumbed; Walkout Lot Description: Cul-De-Sac; Irregular Lot; Wooded View: Wooded Fireplace: Masonry; Wood Burning Floors: Carpet; Tile Fuel: Electric Heat: Central; Heat Pump Cooling: Ceiling Fan(s); Central Cooling Appliances: Dishwasher; Microwave; Range; Self Cleaning Oven; Smoke Detector Other Rooms: Basement Rec Room; Bedroom Main Level; Extra Storage; Family Room; Great Room; Mstr Bdrm Main Level Misc Features: Internet Available; Walk-in Closets; Washer/Dryer Connect; Wired for Internet Exterior Features: Balcony; Deck; Porch - Covered; Windows - Insulated Dining Area: Eat-in Kitchen; Living Rm/Dining Rm Showing: See Agent Instructns New Financing: Cash; Conventional; FHA; New Loan; VA Loan
Listing Office: Doorbell Real Estate
Office Phone: 888-388-3667
Last Updated: December - 21 - 2023
108 Telemann Lane, Oak Ridge, TN 37830- MLS# 1063797
The data relating to real estate for sale on this Web Site comes from the IDX Program of the Knoxville Area Association of REALTORS® Multiple Listing Service. © Copyright 2020 All rights reserved. IDX information is provided exclusively for consumers' personal, non-commercial use, it may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing, and that the data is deemed reliable but is not guaranteed accurate by the MLS. This information is updated weekly, however, some of these properties may subsequently have sold and may no longer be available. The Real Estate Broker providing this data believes it to be correct, but advises interested parties to confirm the data before relying on it in a purchase decision.
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Females Are Making It a Priority to Invest in Real Estate!

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Everyone wants a place to call home; a place that gives them a sense of security. We are currently seeing major interest from females who want to achieve this dream, and the numbers are proving it!

In 2018, for the second year in a row, single female buyers accounted for 18% of all buyers. In 2017, 60% of millennial women listed as the primary borrowers on mortgages were single.

According to the 2018 Home Buyer and Seller Generational Trends Report by the National Association of Realtors, one in five homebuyers in the U.S. were single females (most of them part of the baby boomer generation) as you can see in the graph below:

Females Are Making It a Priority to Invest in Real Estate! | MyKCM

This does not come as a surprise since 50.8% of the U.S. population is female and 15.6% of them are 65 years and over, according to the Census Bureau.

What are the reasons for this demographic’s booming interest in homeownership?

Bankrate published an article with what they believe to be some of the reasons:

  • Divorce rate: Known as the “Gray Divorce,” the divorce rate has doubled for those ages 50 and over and tripled for those ages 65 and over.
  • Average life expectancy: For women it’s 81, four years longer than men.
  • To build home equity: Women want to build equity through their home. As mentioned by Bankrate, “some are hoping to escape rising rents, some might be downsizing or looking for a new start,” especially those going through a gray divorce.

Are they only downsizing and buying small homes?

Not really; The Institute of Luxury Home Marketing recently stated that:

“The number of female billionaires grew faster globally in 2017 than the number of male billionaires. This redistribution of wealth has seen an impact on luxury real estate both in its purchase and design attributes – and obviously, this is important for realtors to recognize when relating to their clients.”

Bottom Line

Whether you are a millennial who wants to buy a starter home, a billionaire looking for that luxury home you’ve always wanted, or maybe even someone who just went through a gray divorce, let’s get together to help you create your real estate portfolio so that you can start investing your money in real estate today!

Further Proof It’s NOT 2008 All Over Again

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Home sales numbers are leveling off, the rate of price appreciation has slowed to more historically normal averages, and inventory is finally increasing. We are headed into a more normal housing market.

However, some are seeing these adjustments as red flags and are suggesting that we are headed back to the same challenges we experienced in 2008. Today, let’s look at one set of statistics that prove the current market is nothing like the one that preceded the housing crash last decade.

The previous bubble was partially caused by unhealthy levels of mortgage debt. New purchasers were putting down the minimum down payment, resulting in them having little if any equity in their homes.

Existing homeowners were using their homes as ATMs by refinancing and swapping their equity for cash. When prices started to fall, many homeowners found themselves in a negative equity situation (where their mortgage was higher than the value of their home) so they walked away which caused prices to fall even further. When this happened, even more homeowners found themselves in negative equity situations which caused them to walk away as well, and so a vicious cycle formed.

Today, the equity situation is totally different. According to a new report from ATTOM Data Solutionsmore than 1-in-4 homes with a mortgage have at least 50% equity. The report explains:

“…nearly 14.5 million U.S. properties were equity rich — where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value…The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage.”

In addition, according to the U.S. Census Bureau, 30.3% of homes in the country have no mortgageon them.

Further Proof It’s NOT 2008 All Over Again | Simplifying The Market

Almost 50% of all homes have at least 50% equity.

If we take both numbers, the 30.3% of all homes without a mortgage and the 17.9% with at least 50% equity (25.7% of the 69.3% of homes with a mortgage), we realize that 48.2% of all homes in the country have at least 50% equity.

Bottom Line

Unlike 2008, almost half of the homeowners in the country are sitting on massive amounts of home equity. They will not be walking away from their homes if the housing market begins to soften.

Buyers: Don’t Be Surprised by Closing Costs!

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Many homebuyers think that saving for their down payment is enough to buy the house of their dreams, but what about the closing costs that are required to obtain a mortgage?

By law, a homebuyer will receive a loan estimate from their lender 3 days after submitting their loan application and they should receive a closing disclosure 3 days before the scheduled closing on their home. The closing disclosure includes final details about the loan and the closing costs.

But what are closing costs anyway?

According to Trulia:

“Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home. (For those who buy a $150,000 home, for example, that would amount to between $3,000 and $7,500 in closing fees.)”

Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. As mentioned before,

Closing costs are typically between 2% and 5% of your purchase price.

Trulia continues to give great advice, saying that:

“…understanding and educating yourself about these costs before settlement day arrives might help you avoid any headaches at the end of the deal.”

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

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