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.

Injun Creek Steam Engine

This is Nichols-Shepherd No. 4246 steam engine. Brought to Big Greenbriar Cove in the 1920s to saw lumber for a new school. On the way back out, the engine toppled over into what is now named “Injun” creek, after the wreck. Showing how marketing sometimes goes awry, or maybe it’s just spelling gone wrong.

Grapeyard Ridge trail has many creek crossings on log bridges. As you head up to Injun Creek you will find an old Indian burial ground then a side trail to visit the McCarter Cemetery, passing many rock piles and stone fences. Next camp #32 where Injun Creek and Grapeyard Ridge trail cross.

We took this picturesque hike yesterday after a long day at the office. I was a little aprehensive about a 7.6 mile hike that late in the evening but it was well worth it to see something so unique. While I highly recommend this hike I would suggest you start before 3.

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.