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In order to keep aware of the developing trends and changes in our local real estate market I frequently pull the overall sales statistics from our local MLS. Below are graphs indicating various statistics including the average residential sale price in Sevier County (per month & per year), the overall residential sales volume per month in Sevier County, and the number of residential sales in Sevier County per month.

Please note these figures and graphs include both primary residence residential properties along with overnight rental cabins and second homes. So, these graphs are indicative of the Sevier County market in its entirety, not just the cabin market. It would be very labor intensive and time consuming to evaluate the cabin market accurately due to the way our MLS is setup and the Realtor input on properties. For instance, not all Realtors classify the exterior of a property correctly as being a log home or have the use of the property as an overnight rental cabin correctly identified. With that being said, below are the graphs I created for the Sevier County Residential real estate market from 2006 to April 2013.

(Click the graphs in order to enlarge and better visualize the data)

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Starting around the time of the Bear Sterns crisis and financial meltdown in 2007 and 2008 foreclosures and short sales in the Sevier County began to occur at a more rapid pace than in the past. During the time from 2008 to 2012 foreclosures and short sales dominated our cabin sales market. The properties listed as foreclosures and short sales were frequently priced very aggressively creating good investment opportunities for my clients and other buyers in the area. It was a period where the distressed properties were nearly exclusively what me and my clients sought and ended up purchasing due to the low prices and high rental income potential of the properties we selected. The market has taken quite a drastic change in 2013.

The number of quality cabin foreclosures and short sales in 2013 have decreased dramatically. There are still some foreclosures and short sales available, but there is more competition over these properties. It reflects a simple supply and demand. The number of foreclosures (supply) is down considerably than the 5 years in the past, while the ready, willing, and able buyers (demand) has stayed the same or slightly increased. This has caused many of the foreclosure cabins that are aggressively priced to go into multiple offer situations and being bid up past the list price. Many foreclosures now have the “first look period” where investors have to wait a period (such as 15 days with Fannie Mae properties).

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For the past few months it has seemed the inventory of quality foreclosure and short sale cabins in the Smoky Mountains has decreased. When I say quality foreclosure and short sale cabins I refer to properties that would return a good investment and be a good overnight rental cabin. Some of the features, in my opinion, to qualify for this would be having a good mountain view or a good location (in a good subdivision/resort). The buyer competition for aggressively priced properties has certainly increased. In part, because of Fannie Mae and Freddie Mac policies of a 15 day waiting period for a second home purchaser or investment buyer. This policy has caused the property to be on the market for 15 days and creates multiple offer situations which tend to drive up the purchase prices on properties in most circumstances. My curiousity led me to study the statistics of sold foreclosures and short sales from the period of February 15, 2011 to March 29, 2011 (the day I am writing this). Below is my analysis of what I have gathered based on these sales.

During the period of 2/15/2011 to 3/29/2011 there were 50 foreclosure and short sale properties sold. This time period has been a low number in our area for the number of units sold. I did not seperate cabins versus residential homes in this study. Of the 50 properties sold, a staggering 26 (more than 50%) were cash sales. This is trending significantly higher than in the past when conventional loans were more common than cash sales. Of the 50 sales, 18 were conventional loans, 4 FHA, and 2 “other” or owner finance with banks. The 26 cash sales lead me to believe investors and savers are getting into the market more and switching their assets from cash to real estate. A lot of this can probably be attributed to the decline of the dollar and the Fed policy of QE2 (Quantitative Easing II). Continue reading this post…

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Fannie Mae First Look Initiative Program and its Negative Effects on our Real Estate Market

I primarily deal with buyers and my main objective is to locate the best deals I can find for those buyers that still meet their list of stated criteria. Naturally, a majority of these are foreclosures and short sales. I have represented buyers in the purchase of several Fannie Mae owned properties in the past. Generally speaking, I have no major compaints about how those were handled in the past. The local real estate brokers handling the Fannie Mae owned properties (primarily Re/Max All Pro in Gatlinburg) are very competant and do a very good job on their end marketing the properties, paying attention to the details, and overall doing things in an ethical and professional manner. Now, they along with local real estate agents representing buyers are faced with what I consider an absolute terrible policy – “The Fannie Mae First Look Initiative”.

Determining the Different Classification of Buyers Under the Fannie Mae First Look Policy

The Fannie Mae First Look program was implemented beginning around March 2010 in our area and has just now become prevalent in our market where all Fannie Mae properties are subject to the First Look Initiative. Essentially, this program creates a series of time limits/deadlines for various types/segments of buyers to purchase properties:

• Owner Occupants and people using the property as their primary residence OR entities using public funds (non-profits, local housing and community development agencies) must wait until the property has been officially listed for sale for 5 days before offers are considered.
• People or entities purchasing the property as an investor or second home must wait 15 days before their offers will be considered.

This policy, while it may have some merits in certain locations, neighborhoods, or developments, is an absolute nightmare for the overnight rental market in Sevier County – including the areas of Pigeon Forge, Gatlinburg, Sevierville, etc. In my opinion, there are several major flaws with the policy and how it is implemented. First, the policy no matter where it is implemented goes against my free market ideals and logic. Continue reading this post…

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My wife, Brooke, and I absolutely love going into Cades Cove within the Great Smoky Mountains National Park. It is hands down our favorite place within the Smokies – so much so that we got married there in the Missionary Baptist Church.

It had been a while since we traveled into Cades Cove, so we decided to go for a trip and take advantage of the fall colors. Brooke is also training for a half marathon and she figured there couldn’t possibly be a more scenic training run than the eleven mile Cades Cove Loop! As we drove into Cades Cove we passed through a section of heavily wooded hardwood trees that were some of the most spectacular shades of yellow I have ever seen. I remarked to Brooke that we have to stop by on the way back to get some pictures. Our plan was for me to drop her off right at the gate so she could start her run and have a good indication of the distance she had ran. She told me to set the odometer and drive exactly 10 miles so she could time herself on her run. With this setup it was assumed that I could drive the eleven mile loop faster than she could run it….We were wrong!

With traffic in Cades Cove heavy due to the peak leaf season, I drove around and stopped several places to take photos and enjoy the scenery. I couldn’t pull off and travel on Sparks Lane or Hyatt Lane (which we usually do) because it would have made the mileage wrong for her run. I just couldn’t resist though, so I pulled off on Sparks Lane briefly and saw some horses in the pasture that I thought would make a good photo. It made me sit back and think what it was like for the early pioneers in Cades Cove and how they tilled the land and the livestock they raised. I have read several books on Cades Cove and each one makes me more and more fascinated with the area. After calculating the short detour into my odometer calculation I headed back on the main Loop. I was thinking that at some point either Brooke would pass me or I would pass Brooke. Apparently, my 10 minute or so stop on Sparks Lane was all the headstart Brooke needed to pass me up and never look back! Continue reading this post…

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Day Three – Oconaluftee River and Bradley Fork

The day started out on a rough note.  We had to stop by several different locations before finding a shop that could sell a one day non-resident licenses in a timely fashion.   Our last hope was to find a fly fishing shop and head there. We ended up going to the Smoky Mountain Angler in downtown Gatlinburg where they got their licenses, some flies, and John got a sticker for his fly rod case and a t-shirt/hat combo. After getting a bit of a late start we made our way over Newfound Gap and into North Carolina to fish the Oconaluftee River (the Smoky Mountains National Park portion). We parked on the Southern portion of the Smokemont Campground and began fishing. After a brief introduction, Mike, Cole, Jason, and Brian caught on very quickly to fly fishing in the Smokies and adapted to their surroundings well.

I was using a dry fly, as was Cole. Everyone else was using nymphs. There were several sections that looked to be ideal for a dry fly, but we couldn’t get anything to rise. John caught two nice sized Brook Trout (called spec, specs, or speckled by locals).

John slipped on a rock and got the tip of his fly rod caught between two rocks, snapping the end of it off. Needless to say, John was discouraged, as it was a Scott fly rod (which definitely isn’t cheap) and he had planned to use it on his upcoming trip to Montana.  Fishing was a little slow on this narrower portion of the Oconaluftee so we decided to go into Cherokee so that everyone could (hopefully) catch a fish in the stocked waters.

 After paying our $7 each license to fish in the Cherokee Indian Reservation, we got out and explored the wide Oconaluftee. The fishing was decent, as all of us caught at least one fish except John (who was a little down after breaking his rod and acted as more of a “guide” spotting out the best waters and helping all of us). There was one deep hole we found and fished for a long time, with Cole pulling out a nice sized rainbow as did Jason. We fished to some stocked golden trout for a while, but couldn’t get them to take anything.

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Day Two – Little River

My wife Brooke joined John and I for our fishing expedition on the Little River. She accompanied us the last time we went fishing in the Smokies a couple years ago.  On our last expedition, we fished Porter’s Creek (in the Greenbrier area), the Little River, Jake’s Creek, Cataloochee Creek, and Abrams Creek. She is a trooper when it comes to outdoors type of things. She hikes along with us with her backpack with all sorts of snacks, drinks, camera, and of course her many books to keep her occupied while we are fishing. I was surprised she decided to make the trip again considering she got chiggers in the Elkmont area around the time the fireflies were in their prime.

We got to Little River Outfitters before they opened their doors. Once they opened up, several fishermen including us quickly entered and we began selecting some of the best flies to match the hatches during this time of year. We stopped to chat with one of the employees for a while who had some experience fly fishing in Montana where John is going in a couple weeks – around the Cooke City area.

The fishing of the Little River was decent. John had caught three fish within the first 20 minutes or so – all rainbows. As we drove along Little River Road we tried to cherry pick the best spots. Surprisingly we fared better closer toward Townsend rather than the section between Metcalf Bottoms and Elkmont with the higher elevations and cooler water temperatures. We ventured into Elkmont and went to check out Jake’s Creek again, but decided to just go ahead and fish the East Prong of the Little River instead as we were more familiar with this portion of the river. We got some excellent photos of the beautiful scenery along the Little River and John again caught a couple rainbows.

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Lately it has been difficult for me to break away and devote some time to go trout fishing here in our beautiful Smoky Mountains. One of my clients had expressed an interest in going and my cousin, John, from West Virginia hadn’t been down in a while to go fishing, so I figured now would be as good of time as any.

My cousin, John, is quite the outdoorsman. He comes from a family where his dad brought him deer hunting in the woods of West Virginia before he could walk. He carried him in his Carhartt’s as he sat out in the silence of the woods bow hunting. Apparently, my cousin was quite well behaved and quiet for his age – either that or he must have slept the whole time!

 John and his brother Ian have been hunting and fishing avidly for at least 20 years now – basically since they were old enough to carry a gun or pick up a pole! More recently, John has got into trout fishing and fly fishing. John got introduced into trout fishing in the mountains of West Virginia, more specifically the Williams River, Cranberry River, Gauley, and Elk River.

My Uncle John and my cousins would frequently go up to the rivers and streams in the mountains and catch their limit of stocked trout within an hour frequently. They are quite the fisherman, able to read the water and have perfect presentation to the trout. I had joined them several times and was amazed at the ease they would catch fish.

 One of my earliest childhood memories was to my Papa’s cabin near the George Washington National Forest in West Virginia, fairly close to Washington D.C. Surprisingly, my cousin John is the only one who really took a liking to fly fishing. Once he got hooked, there was no turning back. John now ties all of his own flies, made a custom handmade bamboo rod for himself, and he frequently bushwhacks through the remote West Virginia wilderness in search for native brook trout.

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Once again, Brooke, my wife wrote a blog that is appearing on my website! One of these days I will get around to writing a real estate related blog. Brooke is a better writer anyway, so I hope you enjoy her stories of our trips to the National Park!

Over the holiday weekend Jay and I met my parents at Cades Cove. On Saturday mornings the 11 mile loop is closed to motor vechiles, and makes a great bike ride. Jay and I got there a little early, so we headed to the campground for a bathroom break and a photo-op.

Jay and I were trying to keep an eye out for my parents, since the parking lot we were supposed to meet at was full. Jay got distracted taking pictures, and wanted to get the perfect shot of the sun coming through the clouds, and asked me to be in the foreground.

Just as he was taking the picture, I noticed an old man on a bike up above us.

Jay chastised me for moving and ruining the photo, but I wanted to get to my dad before he passed us. I look huge in the picture, so I’m thankful that my dad ruined it! Jay did however, get another shot of us that we didn’t know about.

And he was finally able to get the shot of the rays of sun that he was looking for.

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