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.

The Gatlinburg real estate market has seen many styles over the past 5 decades. None of which was more pronounced than the a-frames of the 1960’s and ’70’s that dot the mountainsides. Today, a new grand style of luxury has made its way into the mountain scenery. The Big Log Lodges have arrived in Gatlinburg.

This style has been around for many years in the $10 to $30 million dollar estate homes out west in Colorado and Utah. The appearance of these super luxury cabins in the Gatlinburg mountains is still relatively unknown except to the savvy overnight renter. In fact, these homes are bringing in such incredible rental numbers (some over $200,000 per year in gross income) that many of the purchasers have been neighbors and friends passing the word to one another about the investment opportunity.

The most prominent mountainside community of Big Log Logdes right now is Pinnacle Vista. Mind-blowing views, big log construction, very large private lots, and exceptional rental income have combined to make this particular development feel like an overnight success. However, it’s success has been several years in the making. A local developer SKL, LLC (David Moersdorf, his wife and sons) have made Pinnacle Vista their primary focus. Building with the extremely large logs does take some time and they have committed to the task much to the joy of several new owners of these Lodges.

It’s not often that you get to see your hometown transform with new high-end communities, underground downtown utilities, and a flurry of new investment (a new Hilton, several restaurants and a downtown waterpark are slated to be completed within the next 2 years). I am happy to say that I have been and will continue to be here to witness it all.

Gatlinburg Mountains

The Gatlinburg real estate market is seeing the absorption rate increasing for existing homes. In the past 4 or 5 years the building of new homes was fast and furious. Now, the building of new homes in Gatlinburg has slowed tremendousely and subsequently has allowed the existing homes for sale to be absorbed at a faster pace.

Good news for the sellers who need to move their money elsewhere or have reached the end of their depreciation schedule. Also, good news for buyers who are ready to take advantage of the market and the exceptional homes available now.

Increasing sales and decreasing inventory mean that our market is stabilizing and returning to a more normal sales environment. Not to be mistaken with the exuberant period we saw in the past few years but more like the steady appreciation from the early 90’s to the very early 2000’s. A welcome change even though we didn’t see the appreciation rates of 30 to 60 percent like some areas of the country.

It’s always easy to tell when the Summer rental season is happening in Gatlinburg and Pigeon Forge. The streets are busy and the sidewalks are full. The locals are making the most of the “back roads” and the few lucky tourist who have found out about them are too. If you are lucky enough to have a contact in Gatlinburg or Pigeon Forge that can direct you around the traffic, take advantage of it.

Of course, your friendly local real estate agency will be happy to help.

One more thing that always reminds me of tourist season is when the grocery stores are full. The produce is always fresh!

The sales environment in the Gatlinburg real estate market this year has seen it’s ups and downs. Fortunately, right now everything seems to be going up. The average list price to sale price ratio this ytd is 93.7%. An impressive number for an off year. The average sales price in Gatlinburg (includes homes and condos) so far this year is $214,653. We’re starting to see more of the homes in Gatlinburg over $350,000 go under contract right now. I predict that this Fall will continue to be a busy time for us.