It’s been a difficult year for our region as we have worked to rebuild after the devastating wildfires destroyed so many homes, cabins, businesses, and the natural attractions that bring in so many people to our area year after year. The impact on the local real estate market has also been a challenge to recover from.
Even before the wildfires, we really didn’t have enough properties on the market to meet buyer demand. In the first quarter of this year, we saw a flurry of buyers with insurance checks in hand who were looking to quickly replace what they had lost with something for sale. That housing shortage is still continuing as we enter the final quarter of the year. The result of the wildfires is the largest driving force, but we also continue to see a larger pool of buyers than sellers in this market. Prices have risen an average of 16 percent, though we’ve seen as much as 30 percent increases in some areas. These increases in sales prices include cabins in areas that are in high demand, locations with fantastic amenities or amazing views, and new construction. Building is taking place where and when possible – more on that in a moment.
As the year progressed, we saw another wave of buyers enter the market – those who discovered they wouldn’t be able to rebuild what they lost in the wildfires. Some of those didn’t have enough in their insurance check to cover the cost of building. Others found that changes in building codes made rebuilding impossible, either because of additional expenses due to the new codes or because the location of their cabin was no longer a buildable site. Perhaps the attraction of the area they had was lost with the fires. As time has passed, the cost of rebuilding cabins in the Smokies has increased due to the additional demand, and many who planned to rebuild have abandoned or postponed those plans in favor of just buying something else.
When I talk to buyers, I try to help them understand the reality of the situation: there are properties for them, but they have to act fast or someone else will buy it. We’ve seen offers written on homes and cabins for above asking price, or be written contingent on viewing the home if the prospective buyer is coming from out of town and wants to make sure it won’t be sold to someone else while they’re driving in. The longer they wait, the more likely the price range they are looking in will be below their expectations for what they want in a home or cabin. This can be frustrating and discouraging for conservative buyers who struggle to accept the rapid changes in the real estate market. It’s also difficult for those buyers who have purchased a home or cabin in the last few years when it was a buyers’ market. The days of foreclosures and short sales are over, and hopefully will remain so.
When I talk with sellers, I encourage them to price their property competitively because the buyers will come to see what they have. Yes, the home may be worth several thousand dollars more, but because of the rapidly changing market, we can afford to start a little lower in order to attract those buyers. In several cases we have seen our sellers receive offers that are at or above asking price. The last thing we want to see happen is a home priced higher that sets for weeks and gets very few showings. The longer it is on the real estate market, the tougher it will be to get the best price out of it.
If you are thinking about selling, now is the time to give it serious consideration. We are always here to answer questions you have about the market or to help you determine what your home should sell for.