I have to admit that I’ve been aprehensive about 2009. It’s not as though 2008 gave me that much to look forward to in the way of business, the type of business you can count on, can budget with. 2009 is proving to be much more agreeable though. Beginning the last 3 weeks of December we started seeing marked improvements in our real estate business.

Short-sales, foreclosures and just great deals on some of our rental properties have inspired many buyers to act (along with almost comically low interest rates).

Someone once told me that ‘no one rings a bell when you reach the bottom, you only recognize it when it’s already past by at least 6 months’. I have the distinct feeling we could be hearing a bell soon and I couldn’t be happier.

Happy 2009!

Being in the real estate business is an exercize in constant change. Even in the boom periods we are always adapting to new technology, new customer demands, and the ever changing regulations that guide us.

I get bored easily so the persistent need to change hasn’t bothered me. I remember our first web site back in the 1990’s and training my agents to use email and send attachments some time after. It seems that the advent of the IDX web site came quickly with some local brokers skeptical but it was an exciting time for me.

I wonder what the next change will be. I wonder if we have reached a point where great innovation has stopped and we’re just going to experience fine tuning of the internet tools and services we use? Will the downturn in real estate sales produce some sort of new market or marketing technique?

I think about what an instructor from a class I attended several years ago said, ‘The real estate business is and always will be one agent working with a buyer to find the right house, it’s a face to face business.’ Has the internet really changed that? Sure, people start their search online but when it comes time to look at the houses, write an offer, and negotiate they still look to us (the people who have spent thousands of dollars and hours educating ourselves) to help them navigate the waters and find their way. I guess, even thought I like change, I can take some comfort in the fact that we’re still needed.

I was asked a question from a customer recently that I had not considered, ‘can I still get a loan?’ I say I had not considered it because I had taken it for granted that everyone knew that loans were still readily available to customers who have good credit and a downpayment (around 5% for these folks).

These are rational people who have heard about a credit crunch and believed, as I now think many do, that home loans are difficult to acquire. After our conversation they promptly bought a house with no lender issues what-so-ever.

Reminds me of the old saying about assuming (haha).

Snow on the Mountain

Early Sunday morning we had our first snow in Gatlinburg. It started out more like a rain/snow mix but then later became that cold white stuff that we look forward to. Sunday morning I woke to find Mt. LeConte covered in beautiful white snow with the mountains below still showing remnants of Fall color (we had an amazing Fall this year, with brilliant color). My deck and the trees surrounding it were white too. A frosty reminder that winter in the Great Smoky Mountains is almost here.

Short sales are not the best way to transfer property but lately it’s become the method of choice for some buyers and distressed sellers. Many of our customers are confused about short sales (we joking call them long sales in our office because a few banks can take weeks to make a decision) and shy away from them. I, however, feel short sales represent a much more attractive option for buyers and sellers. I’ll list a few reasons why I feel this way:

• For rental properties, which is most of our market here, the homes are still furnished and have not been damaged by the removal of furniture, appliances and sometimes pool tables and hot tubs.
• The rental stream has not been interrupted by the foreclosure process so future bookings still exist.
• The seller doesn’t have a foreclosure to contend with on their credit.
•  Often the buyer gets the property at or below what the bank would later list it at. It’s true that banks do not want property…. they want money.

While it is unfortunate that some owners of property find themselves in a tough spot, I’m glad we can be there to help them stave off foreclosure with the tools that are made available.

I suppose I’m an eternal optimist. I do think the best of people more often than not. I have to admit I was really excited when one of my agents was asked to do an interview for the local ABC affiliate.

The story was supposed to be about how some absentee property owners here in the Gatlinburg and Pigeon Forge areas were taking the rental income from their overnight rental properties and using it to pay their mortgages on their primary residences (lots of them are in Florida). Thus, creating a situation where mortages on their second homes/investment properties here are going into foreclosure or short sale and creating opportunities for the savvy investor. A complicated story I suppose.

The report ended up highlighting the foreclosure/short sale portion of the story. Leaving out what I think most of the interview was about, the investor deals. I know editorial freedom is always going to be part of a news story (I’ve submitted my share of articles to the newspaper to barely recognize them when they were printed) but I had high hopes, perhaps too high, that this story would end on an uplifting note. Primarily, that our properties here have an inherent value that is not entirely determined by outside forces due to the rental income they produce.

It’s an amazing time to be in the real estate business. I know everyone bemoans the fact that sales are down but I just can’t help but be in awe of the deals some of our investors are getting. One, who shall remain nameless, says ‘It’s like a garage sale for the wealthy.’ It may sound callous but that attitude is pervasive with many of our cash buyers right now and even though they’re getting deals they are also helping distressed sellers and our local economy.

Here in the Great Smoky Mountains of East Tennessee the rental properties and the income they generate are a crucial part of our economy. Particularly, the real estate industry in Gatlinburg and Pigeon Forge.

So far this year the bad economic news hasn’t affected our rentals much. The looming crisis for our best rental season, the Fall leaves changing color, is a shortage of gas in several major southern cities. We have plenty of gas to go around here but it seems that many of our visitors from such gas starved areas as Atlanta, Nashville, and MIami are having a tough time making the choice to place their families in the car or mini-van for a vacation.

I fully expect the fear of travel to quickly subside once the gas stations in those cities have full tanks again. Hopefully, in the meantime a few travelers will go home and tell everyone, “they have gas in East Tennessee.”

This year even the stalwart of Sevier County, Chalet Village, has seen it’s ups and downs. Chalet Village has been the most predictable community in terms of growth and stability since I’ve been a Realtor, and that’s been a while. However, this community of mostly overnight rental homes and condos is seeing a quick stabilization.

The number of sales pending has increased over the past month as the active inventory has remained steady or even declined in some periods. A few savvy customers are telling us they believe the bottom has been reached here and with interest rates holding this week at around 5.5% they are not waiting any longer to purchase. All good news for the real estate market  and owners who want to sell in Chalet Village and Gatlinburg.

We all hear that in an election year you can expect sales to increase after the election. Even with all of the extreme factors pressing our economy it appears that old adage is coming true.

With the coming and going of Shades of the Past and the Grand Rod Run you always know it’s Fall around here. I have to admit I do like seeing all of those old cars and trucks driving around. I also really like the new trend (new to me anyway) of replacing the old engines and suspensions with modern systems. It’s like having a modern car underneath all that cool design.

The weather has finally reached that state of perfection. With upper 70’s during the day, upper 50’s to low 60’s at night and super low humidity you just can’t help but to go hiking or bike riding. We now have the perfect days to view property too. No wonder so many people come to the Great Smoky Mountains in the Fall. The Gatlinburg real estate market owes practically all it’s success to the mountains and climate that surround it.

So, if you’re planning to come to Gatlinburg, Pigeon Forge or just visiting the Great Smoky Mountains this Fall make sure you take a minute to pay homage to the reason this area is so popular; great temperate weather, beautiful scenery, and friendly people. Have a great Fall season.