SOLD! This home sits on just under a half-acre and is located at 8620 Rayworth Trail, Powell, TN 37849. This beautiful 4BR, 2.5BA home is jam-packed with upgrades galore. Hardwood floors in all main living areas including upstairs (no carpet!). Stunning kitchen with upgraded cabinets, breakfast bar, coffee bar, granite counters, and stainless appliances. Living room with corner fireplace. Family/sunroom with cathedral ceilings, beautiful moldings & plenty of natural light. Amazing walk around screened-in porch with cathedral ceilings and gorgeous views walks out to a custom paver patio. Upstairs is the owner’s suite with a very nice updated bath featuring double sinks, and a separate tub and shower. 3 other bedrooms (or 2 plus a bonus), and an updated tiled bath complete the 2nd level. Two Car Garage. Storage shed. Newer HVAC’s. Just move in! MLS# 1113500 – OFFERED AT $300,000. TEXT/CALL Troy Stavros with CornerStone Realty Associates at 865-999-0925.
Will Surging Unemployment Crush Knoxville Area Home Sales?
Ten million Americans lost their jobs over the last two weeks. The next announced unemployment rate on May 8th is expected to be in the double digits. Because the health crisis brought the economy to a screeching halt, many are feeling a personal financial crisis. James Bullard, President of the Federal Reserve Bank of St. Louis, explained that the government is trying to find ways to assist those who have lost their jobs and the companies which were forced to close (think: your neighborhood restaurant). In a recent interview he said:
“This is a planned, organized partial shutdown of the U.S. economy in the second quarter. The overall goal is to keep everyone, households and businesses, whole.”
That’s promising, but we’re still uncertain as to when the recently unemployed will be able to return to work.
Another concern: how badly will the U.S. economy be damaged if people can’t buy homes?
A new concern is whether the high number of unemployed Americans will cause the residential real estate market to crash, putting a greater strain on the economy and leading to even more job losses. The housing industry is a major piece of the overall economy in this country.
Chris Herbert, Managing Director of the Joint Center for Housing Studies of Harvard University, in a post titled Responding to the Covid-19 Pandemic, addressed the toll this crisis will have on our nation, explaining:
“Housing is a foundational element of every person’s well-being. And with nearly a fifth of US gross domestic product rooted in housing-related expenditures, it is also critical to the well-being of our broader economy.”
How has the unemployment rate affected home sales in the past?
It’s logical to think there would be a direct correlation between the unemployment rate and home sales: as the unemployment rate went up, home sales would go down, and when the unemployment rate went down, home sales would go up.
However, research reviewing the last thirty years doesn’t show that direct relationship, as noted in the graph below. The blue and grey bars represent home sales, while the yellow line is the unemployment rate. Take a look at numbers 1 through 4:
- The unemployment rate was rising between 1992-1993, yet home sales increased.
- The unemployment rate was rising between 2001-2003, and home sales increased.
- The unemployment rate was rising between 2007-2010, and home sales significantly decreased.
- The unemployment rate was falling continuously between 2015-2019, and home sales remained relatively flat.
The impact of the unemployment rate on home sales doesn’t seem to be as strong as we may have thought.
Isn’t this time different?
Yes. There is no doubt the country hasn’t seen job losses this quickly in almost one hundred years. How bad could it get? Goldman Sachs projects the unemployment rate to be 15% in the third quarter of 2020, flattening to single digits by the fourth quarter of this year, and then just over 6% percent by the fourth quarter of 2021. Not ideal for the housing industry, but manageable.
How does this compare to the other financial crises?
Some believe this is going to be reminiscent of The Great Depression. From the standpoint of unemployment rates alone (the only thing this article addresses), it does not compare. Here are the unemployment rates during the Great Depression, the Great Recession, and the projected rates moving forward:
Bottom Line
We’ve given you the facts as we know them. The housing market will have challenges this year. However, with the help being given to those who have lost their jobs and the fact that we’re looking at a quick recovery for the economy after we address the health problem, the housing industry should be fine in the long term. Stay safe.
Selling Your Home? Come On Down.. But Make Sure the Price is Right!
If you’ve ever watched “The Price is Right,” you know that the only way to win is to be the one to correctly guess the price of the item you want without going over! That means your guess must be just slightly under the retail price.
In today’s shifting real estate market, where more inventory is coming to market and home values are projected to appreciate at lower rates, homeowners will not be able to price their homes as aggressively as they were able to just last year.
They will have to employ the same strategy: be the closest without going over!
As we have explained before, pricing your home at or slightly below market value actually increases the number of buyers who will see your home in their search!
Over the last six months, more inventory has come to market while the months’ supply of inventory available has dropped. This means that the demand for homes to buy is still very strong throughout the country!
Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the homes when in reality nothing was wrong, the price was just too high!
Bottom Line
If you are thinking about listing your home for sale this year, let’s get together to properly price your home from the start! Contact Troy Stavros with CornerStone Realty Associates at 865-999-0925 to start formulating a plan to reach your real estate goals!
Why You Shouldn’t Take Your Home Off the Market During the Holidays
If you are one of the many homeowners who is debating taking your home off the market for the next few weeks, don’t! You will miss the great opportunity you have right now!
The latest Existing Home Sales Report from The National Association of Realtors (NAR), revealed that the inventory of homes for sale has dropped to a 4.3-month supply.
Historically, a 6-month supply is necessary for a ‘normal’ market, explained below:
There are more buyers that are ready, willing, and able to buy now than there have been in years! The supply of homes for sale is not keeping up with the demand of these buyers.
Bottom Line
Home prices are appreciating in this seller’s market. Making your home available over the next few weeks will give you the most exposure to buyers who will be competing against each other to buy it. Plus when everyone else takes their home off the market that means less competition for your home. Not to mention, buyers that are looking during the holidays are serious!
Have more questions? Contact me, Troy Stavros with Gables & Gates, REALTORS at 865-777-9191. I look forward to talking with you!
Waiting Until Spring To Sell Your Home Won’t Help You
Everyone knows that lots of homes sell during the spring-buying season. Because of that, many homeowners hold off on putting their home on the market until then. The question is whether or not that will be a good strategy this year.
The other homes that hit the market in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring, as compared to the rest of the year? The National Association of Realtors (NAR) recently showed which months most people listed their home in for 2015. Here is a graphic showing the results:
The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,860,000.
In May that number spiked to 2,280,000!
What does this mean to you?
With the national job situation improving, and mortgage interest rates projected to rise later in the year, and coming off a year of low inventory of available homes, buyers are not waiting until the spring. They are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition for a buyer.
Bottom Line
It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today. Ready to talk about listing or get prepared? Call me, Troy Stavros with Gables & Gates, REALTORS today at 865-777-9191 to get started!
Summer Knoxville Real Estate Guides Are Now Available!
Hot off the presses! My Summer 2015 Knoxville real estate guides for both buying and selling a home in the current market, are now available. These are full of great information to arm you with the knowledge to make an educated decision, whether you are considering buying or selling real estate in the Knoxville area. They are FREE to you, so just enter your information below and they will arrive in your email within a couple minutes. The information included in these guides is also applicable to other markets across the country, so feel free to share with friends and family. As always, don’t hesitate to contact me with any questions!
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