Knoxville housing market Archives - Page 4 of 12

Is it Safe to Sell My House in Knoxville Right Now?

November 12, 2020 By Troy Stavros

In today’s real estate market, the buzz is all about how it’s a great time to sell your house. Buyer demand in Knoxville is high, and there simply aren’t enough homes available to buy to meet that growing need. This means now is the time to make a move so you can close the deal on your ideal terms.

Even in today’s strong sellers’ market, there are homeowners who are choosing not to sell due to ongoing concerns around the health crisis, financial uncertainty, and life in general. According to Zillow, here are the top three reasons homeowners who are thinking of selling sometime in the next three years are not putting their houses on the market right now:

34% – Life is too uncertain right now
31% – Financial uncertainty
25% – COVID-19 health concerns

If you identify with any of these, you’re not alone. Whether it’s the future of your employment situation or simply being uncomfortable having guests in your home for showings, life feels a lot different than it did at this time last year. The good news is, we have spent the majority of 2020 figuring out how to sell homes safely, and it’s paying off for those who are choosing to move this year.

Doorbell real estate agents are doing two things very well to make selling your Knoxville area home possible:

1. Agents Are Implementing Technology in the Process

While abiding by state and local regulations as a top priority, Doorbell real estate agents are making sales happen safely and effectively by leveraging key pieces of technology. Agents know exactly what today’s buyers and sellers need and how to put the necessary digital steps in place. For example, agents have capitalized on the technology buyers find most helpful when deciding on a new home:

Virtual tours
Accurate and detailed listing information
Detailed neighborhood information
High-quality listing photos
Agent-led video chats

They’re listening to their audience and leveraging the tools that help Knoxville home buyers get an initial look at a home without having to step inside. This helps reduce the number of people entering your home, so only those who are very seriously interested need to take the next step: in-person showings.

2. Agents Are Facilitating Safe and Effective In-Person Showings

After leveraging technology, if you have serious buyers who still want to see your house in person, agents are following the guidelines set by the National Association of Realtors (NAR) and utilizing safe ways to proceed. Here are a few of them, understanding again that the agent’s top priority is always to follow state and local restrictions first:

Limiting in-person activity
Requiring guests to wash their hands or use an alcohol-based sanitizer
Removing shoes or covering them with booties
Following CDC guidance on social distancing and wearing face coverings

Getting comfortable with your agent – a true trusted advisor – taking these steps under the modern-era safety standards might be your best plan. This is especially important if you’re in a position where you need to sell your house sooner rather than later.

As Jeff Tucker, Senior Economist for Zillow notes:

“Homeowners who feel life is uncertain right now may think they can still get a strong price if they delay selling until they have more clarity. The catch is that waiting to sell may raise the cost of a trade-up. This fall’s record low mortgage rates, which make a trade-up more affordable on a monthly basis, are not guaranteed to last.”

Bottom Line

In this new era in our lives, things are shifting quickly, and virtual strategies for sellers may be your ideal option. Opening your doors up to new approaches could be game-changing when it comes to selling your home in Knoxville while the market is leaning in your favor. Let’s connect so you have a trusted real estate professional to help you safely and effectively navigate all that’s new when it comes to making your next move.

Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today.

Real Estate Is One of the Top Driving Forces in the Economy

November 4, 2020 By Troy Stavros

As the economy recovers from this year’s health crisis, the housing market is playing a leading role in the turnaround. It’s safe to say that what we call “home” is taking on a new meaning, causing many of us to consider buying or selling in Knoxville sooner rather than later. Housing, therefore, has thrived in an otherwise down year.

Today’s high buyer demand in Knoxville combined with low housing inventory means we’re seeing home prices appreciate at an above-average pace. This demand is being driven by those who want to take advantage of historically low mortgage rates. According to Freddie Mac:

“The record low mortgage rate environment is providing tangible support to the economy at a critical time, as housing continues to propel growth.”

These factors are driving a positive impact on the economy as a whole. According to the National Association of Realtors (NAR), the real estate industry provided $3.7 billion dollars of economic impact to the country last year. To break it down, in 2019, the average newly constructed home contributed just over $88,000 per build to local economies. Across the country, real estate clearly makes a significant impact (See map below):In addition, last week, the Bureau of Economic Analysis announced the U.S. Gross Domestic Product increased at an annual rate of 33.1% in the 3^rd quarter of this year, after decreasing by 31.4% in the second quarter. There’s no doubt the growing economy is being fueled in part by the soaring housing market. Experts forecast this housing growth to carry into 2021, continuing to make a big impact on the economy next year as well.

Bottom Line

The American Dream of homeownership has continued to thrive in the midst of this year’s economic downturn, and “home” has taken on a new meaning for many of us during this time. Best of all, the housing market is making a significant impact as the economy recovers.

Have questions or thinking about buying or selling a home? Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!

4 Reasons Why the Election Won’t Weaken the Knoxville Housing Market

November 3, 2020 By Troy Stavros

Today, Americans will decide our President for the next four years. That decision will have a major impact on many aspects of life in this country, but the residential real estate market in Knoxville will not be one of them.

Analysts will try to measure the impact feasible changes in regulations might have on housing, the effect of a possible first-time buyer program, and any number of other situations based on who wins. The housing market, however, will remain strong for four reasons:

1. Demand Is Strong among Millennials

The nation’s largest generation began entering the housing market last year as they reached the age to marry and have children – two key drivers of homeownership. As the Wall Street Journal recently reported:

“Millennials, long viewed as perennial home renters who were reluctant or unable to buy, are now emerging as a driving force in the U.S. housing market’s recent recovery.”

2. Mortgage Rates Are Historically Low

All-time low interest rates are also driving demand across all generations. Strong demand created by this rate drop has countered other economic disruptions (e.g., pandemic, recession, record unemployment).

In addition, Freddie Mac just forecasted mortgage rates to remain low through next year:

“One of the main drivers of the strong housing recovery is historically low mortgage interest rates…Given weakness in the broader economy, the Federal Reserve’s signal that its policy rate will remain low until inflation picks up, and no signs of inflation, we forecast mortgage rates to remain flat over the next year. From the third quarter of 2020 through the end of 2021, we forecast mortgage rates to remain unchanged at 3%.”

3. Prices Continue to Appreciate

The continued lack of supply of existing homes for sale in Knoxville coupled with the surge in buyer demand has experts forecasting strong price appreciation over the next twelve months.

4. History Says So

Though it’s true that the market slows slightly in November when it’s a Presidential election year, the pace returns quickly. Here’s an explanation as to why from the Homebuilding Industry Report by BTIG:

“This may indicate that potential homebuyers may become more cautious in the face of national election uncertainty. This caution is temporary, and ultimately results in deferred sales, as the economy, jobs, interest rates and consumer confidence all have far more meaningful roles in the home purchase decision than a Presidential election result in the months that follow.”

Ali Wolf, Chief Economist for Meyers Research, also notes:

“History suggests that the slowdown is largely concentrated in the month of November. In fact, the year after a presidential election is the best of the four-year cycle. This suggests that demand for new housing is not lost because of election uncertainty, rather it gets pushed out to the following year as long as the economy stays on track.”

Bottom Line

There’s no doubt this is one of the most contentious presidential elections in our nation’s history. The outcome will have a major impact on many sectors of the economy. However, as Matthew Speakman, an economist at Zillow, explained last week:

“While the path of the overall economy is likely to be most directly dictated by coronavirus-related and political developments in the coming months, recent trends suggest that the housing market – which has basically withstood every pandemic-related challenge to this point – will continue its strong momentum in the months to come.”

Have questions? Thinking about buying or selling a home? Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today and let’s talk about how to make your goals a reality.

Buyer Interest Is Growing among Knoxville’s Younger Generations

October 28, 2020 By Troy Stavros

The demand for homes this year is extraordinary as record-breaking numbers of hopeful buyers continue to shop for homes in Knoxville. In a normal year, the peak homebuying season comes to a close by early fall. However, 2020 is anything but a normal year, and the housing market is no exception. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), explains:

“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season…I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”

What’s drawing so many buyers to the market?

As Yun mentioned, record-low interest rates are key. Today’s rates are strengthening purchasing power for buyers, too. Sam Khater, Chief Economist at Freddie Mac, emphasizes:

“Mortgage rates today are on average more than a full percentage point lower than rates over the last five years.”

If you’re a home buyer in Knoxville right now, there’s no question that you want to take advantage of this opportunity – and you’re not alone. Competition among Knoxville buyers is definitely increasing as more buyers enter the market and mortgage interest rates remain so low.

Who’s planning to buy a home in Knoxville right now?

Today’s affordability is appealing to all generations and seems to be especially attractive to younger buyers who want to begin growing their wealth through homeownership. There’s a distinct increase this year in the percentage of those in younger generations searching for homes. The National Association of Home Builders (NAHB) notes:

“Between the third quarters of 2019 and 2020, the share of Gen Z adults planning a home purchase rose three points to 14%. Millennials, however, are the generation most likely to be considering buying a home (22%).”

Here’s a graph showing the year-over-year increase in homebuying interest by generation:According to Mark Fleming, Chief Economist for First American, millennials are reaching their prime home-buying years, a likely driver in this increase:

“Record low mortgage rates and millennials continuing to age into their prime home-buying years has boosted demand, but a lack of housing supply remains a challenge.”

What’s the biggest challenge for today’s buyers in Knoxville?

Finding a home, however, as Fleming notes above, is clearly a challenge today. Yun also explains:

“There is no shortage of hopeful, potential buyers, but inventory is historically low.”

With so many buyers actively searching for homes in Knoxville this year and so few houses for sale, it’s more important than ever to work with a trusted real estate professional to navigate today’s market. From pre-approval to bidding wars and guidance on down payment assistance resources, having an agent by your side might make the difference in your ability to land your dream home. We are getting our clients under contract in this competitive market, but it’s not easy and it takes strategy!

Bottom Line

Let’s connect if you’re ready to buy a home in Knoxville. More buyers mean more competition, so you need an expert guide to help you stand out from the crowd. Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!

Why Today’s Options Will Save Knoxville Homeowners from Foreclosure

October 21, 2020 By Troy Stavros

Many housing experts originally voiced concern that the mortgage forbearance program (which allows families impacted financially by COVID to delay mortgage payments to a later date) could lead to an increase in foreclosures when forbearances end.

Some originally forecasted that up to 30% of homeowners would choose to enter forbearance. Less than 10% actually did, and that percentage has been dropping steadily. Black Knight recently reported that the national forbearance rate has decreased to 5.6%, with active forbearances falling below 3 million for the first time since mid-April.

Many of those still in forbearance are actually making timely payments. Christopher Maloney of Bloomberg Wealth recently explained:

“Almost one quarter of all homeowners who have demanded forbearance are still current on their mortgages…according to the latest MBA data.”

However, since over two million homeowners are still in forbearance, some experts are concerned that this might lead to another wave of foreclosures like we saw a little over a decade ago during the Great Recession. Here is why this time is different.

There Will Be Very Few Strategic Defaults

During the housing crash twelve years ago, many Knoxville homeowners owned a house that was worth less than the mortgage they had on that home (called negative equity or being underwater). Many decided they would just stop making their payments and walk away from the house, which then resulted in the bank foreclosing on the property. These Knoxville foreclosures were known as strategic defaults. Today, the vast majority of homeowners in Knoxville have significant equity in their homes. This dramatically decreases the possibility of strategic defaults.

Aspen Grove Solutions, a business consulting firm, recently addressed the issue in a study titled Creating Positive Forbearance Outcomes:

“Unlike in 2008, strategic defaults have not emerged as a serious problem and seems unlikely to emerge given stronger expectations for property price increases, a record low inventory of homes, and stable residential underwriting standards leading up to the crisis which has reduced the number of owners who are underwater.”

There Are Other Options That Were Not Available the Last Time

A decade ago, there wasn’t a forbearance option, and most banks did not put in other programs, like modifications and short sales, until very late in the crisis.

Today, homeowners in Knoxville have several options because banks understand the three fundamental differences in today’s real estate market as compared to 2008:

1. Most Knoxville homeowners have substantial equity in their homes.

2. The Knoxville real estate market has a shortage of listings for sale. In 2008, homes for sale flooded the market.

3. Prices in Knoxville are appreciating. In 2008, prices were depreciating dramatically.

These differences allow banks to feel comfortable giving options to homeowners when exiting forbearance. Aspen Grove broke down some of these options in the study mentioned above:

Refinance Repay: Capitalize forbearance amount – For borrowers who have strong credit, have good or improved equity in their homes, possibly had a higher interest rate on their original loan, have steady employment/no significant wage loss, and income.
Repayment Plan: Pay it back in higher monthly payments – For people who cannot reinstate using savings, but have increased monthly income, and do not want to use a deferral program.
Deferral Program: Shift payments to the end of the loan term – For borrowers who lost income temporarily and regained most or all of their income but are not in a position to refinance due to credit score, home equity, low total loan value relative to closing costs, or simple apathy.
Modification: Flex modification or other mod – For households that permanently lost 20% to 30% of their income, but not all of their income, and want to remain in their home.

Each one of these programs enables the Knoxville homeowner to remain in the home.

What about Those Who Don’t Qualify for These Programs?

Homeowners in Knoxville who can’t catch up on past payments and don’t qualify for the programs mentioned have two options: sell the house or let it go to foreclosure. Some experts think most will be forced to take the foreclosure route. However, an examination of the data shows that probably won’t be the case.

A decade ago, homeowners in Knoxville had very little equity in their homes. Therefore, selling was not an option unless they were willing to tap into limited savings to cover the cost of selling, like real estate commission, closing costs, and attorney fees. Without any other option, many just decided to stay in the house until they were served a foreclosure notice.

As mentioned above, today is different. Most homeowners now have a large amount of equity in their homes. They will most likely decide to sell their home in Knoxville and take that equity rather than wait for the bank to foreclose.

In a separate report, Black Knight highlighted this issue:

“In total, an estimated 172K loans are in forbearance, have missed three or more payments under their plans and have less than 10% equity in their homes.”

In other words, of the millions currently in a forbearance plan, there are few that likely will become a foreclosure.

Bottom Line

Some analysts are talking about future foreclosures reaching 500,000 to over 1 million. With the options today’s homeowners have, that doesn’t seem likely. Have questions or need to talk about selling your home? Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today.

Knoxville Real Estate Continues to Show Unprecedented Strength This Year

October 20, 2020 By Troy Stavros

The 2020 housing market has surpassed all expectations and continues to drive the nation’s economic recovery. The question is, will this positive trend continue throughout the rest of the year, especially given the uncertainty around the current health crisis, the upcoming election, and more?

Here’s a look at what several industry-leading experts have to say.

Lawrence Yun, Chief Economist, National Association of Realtors

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market…Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

Frank Martell, President and CEO, CoreLogic

“Homeowners’ balance sheets continue to be bolstered by home price appreciation, which in turn mitigated foreclosure pressures…Although the exact contours of the economic recovery remain uncertain, we expect current equity gains, fueled by strong demand for available homes, will continue to support homeowners in the near term.”

Zillow

“Zillow’s predictions for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand.

The pandemic also pushed the buying season further back in the year, adding to recent sales. Future sources of uncertainty including lapsed fiscal relief, the long-term fate of policies supporting the rental and mortgage market, and virus-specific factors, were incorporated into this outlook.”

Bottom Line

Many economists are in unison, indicating the housing market will continue to fuel the economy through the end of the year, maintaining this unprecedented strength. And things are no different here in Knoxville. Buyer demand is off the charts, but we need more housing inventory, so prices are being driven higher.

Have questions or are you ready to start the process of buying or selling a home in the Knoxville area? Call/Text me, Troy Stavros with CornerStone Realty Associates today at 865-999-0925.