(Knoxville, TN) The real estate bubble has burst… We’re in for a long hard ride in the real estate market… The credit crunch has destroyed real estate values… These are some of the phrases you’ve heard over the past couple of months. And, they are true for certain pockets of the country, not for East Tennessee.
“It is important for East Tennesseans to understand that real estate is local. We’ve seen a steady appreciation in our area at around 6% for the past 10 years,” said Matt Padgett, President of Knoxville’s Keystone Mortgage Group.
Areas of Florida, California and Nevada have seen huge home inventory levels and are starting to see prices drop. Real estate was appreciating in these areas by 25-50% annually for the past 3 to 5 years. Common sense says this can’t continue and anyone who is thinking rationally knows that. As for comparison, in 2006 the median household income to median home value in California was $65k/$548k compared to the Knoxville area of $49k/$151k.
However, it is true that houses in the Knoxville market are taking longer to sell than in the past.
“This is primarily due to the national media being “irrationally pessimistic”. The national media loves to make news and all of us know that bad news is good business. They will continue to sing the doom-and-gloom song as long as real estate in Florida and California are suffering,” adds Padgett.
When wages are good and jobs are plentiful it’s only a matter of time before the local real estate market starts to gain steam. We have new businesses moving to the area and many people are choosing to retire here. The local job market is so tight that business owners are having trouble finding good talent.
John Sharpe, President of ARG Financial Staffing in Knoxville says, “The job market in this area is the strongest it’s been in years and there’s a strong hiring forecast for the next two quarters”.
For those of us in beautiful East Tennessee, there are deals to be had.