Troy Stavros, Broker and Partner with the 865 Real Estate team states, “The old adage of supply and demand is at it again. Home prices are on the rise because the number of Knoxville homes for sale continues to dwindle.” According to the latest research numbers from the National Association of Realtors, the inventory of homes for sale dropped 8.5% from November, 21.6% from one year earlier, and is at the lowest level since January of 2001.
So why are we seeing inventory of Knoxville homes for sale drop? Here are the reasons:
* Many homeowners still owe more on homes than the current market value and are not willing to bring money to the closing table.
* Many homeowners who might typically be looking to “trade up” have lost the equity necessary to do so (home equity in a primary residence, built over time, is usually the main source of down payment funds in a trade up situation).
* Sellers, feeling the market and prices are still close to bottom levels, are waiting in hopes of selling at a higher price in the future.
* Investors (individual and institutional) are buying homes in bulk and renting them, instead of putting them back on the market for sale.
* Banks are approving more short sales and loan modifications, leading to smaller numbers of foreclosed homes hitting the market for sale.
* Tight lending guidelines for builders have limited the number of new homes hitting the market for sale.