adventures in knoxville real estate by suzy trotta

February 2009 Knoxville Home Sales Report

Hard to believe another month has come and gone, but the it’s time to break down the Home Sales Report from the Knoxville Area Association of Realtors once again.

February was an interesting month. What is usually the beginning of the busy Spring home buying season was  uncharacteristically, not to mention uncomfortably, slow and the numbers for the month definitely reflect that.

One thing that happened in February that may have greatly affected home buyers everywhere was the further tightening of mortgage guidelines.

The minimum credit score for a conventional loan is now 700 with a baseline of 740, meaning that any score under 700 will be subject to a higher rate. Also, the allowable debt ratio for conventional loans was lowered to 38%.  In addition to those changes, the minimim credit score for an FHA loan was raised to 620.Yes, the days of subprime lending are long, long gone.

Looking at those numbers it’s easy to understand why FHA loans are so popular with home buyers right now.

There are also stricter down payment guidelines. With the exception of a few government programs, you’re probably not getting 100% financing anywhere. Here’s a rundown of the minimum down payment required for various loans and property types:

3.5% down  – FHA loan.

10% down-  Conventional loan/primary residence

20% down – Conventional loan/condos & attached PUDs

20% down- Conventional loan/second homes

Now, I’m not a mortgage or finance whiz, but it would seem to me that all of these stricter guidelines are certainly eliminating a good number of buyers from the market.

So, without further ado, allow me to break down the February home sale numbers the only way I know how, AAKT style. Enjoy!

Let’s start with the good – if slightly puzzling – news –

Average sales price for 2 or less BR homes is (way) up.
Feb ’08 – $71,800
Feb ’09 – $105,500

Median sales price for 2 or less BR homes is (way) up.
Feb ’08 – $62,500
Feb ’09 – $78,000

Now for the not so good news –

Average sales price for 3 BR homes is down.
Feb ’08 – $155,000
Feb ’09 – $147,400

Median sales price for 3 BR homes is down.
Feb ’08 – $145,000
Feb ’09 – $134,000

Average sales price for 4+ BR homes is (way) down.
Feb ’08 – $303,000
Feb ’09 – $264,000
Median sales price for 4+ BR homes is down.
Feb ’08 – $240,000
Feb ’09 – $230,000

Average condo sales price is down.
Feb ’08 – $169,500
Feb ’09 – $159,600
Median condo sales price is down.
Feb ’08 – $147,500
Feb ’09 – $141,000
Total number of single family units sold is (way) down.
Feb ’08 – 902
Feb ’09 – 602
Total number of condo units sold is (way) down.
Feb ’08 – 117
Feb ’09 – 52
Days on market is up.

Feb ’08 – 100
Feb ’09 – 120

Then there’s the  news that really isn’t even news any more-

Conventional loans were once again way down
Feb ’08 – 628
Feb ’09 – 310

…while FHA loans were up.
Feb ’08 – 85
Feb ’09 – 116

And here’s the “nobody’s selling unless they have to”  news-

The number of new residential listings was down...
Feb ’08 – 2,552
Feb ’09 – 2,066

…and the number of new condo listings was down.
Feb ’08 – 330
Feb ’09 – 240

Finally there’s the “Hallelujah!” news-

The average list price for new condo listings is down...
Feb ’08 – $207,500
Feb ’09 – $195,900
and the average list price for new residential home listings is down.
Feb ’08 – $264,600
Feb ’09 – $2240,000
As always, here’s my completely unscientific analysis:

  1. Knoxville residential and condo sales are still soft as room temperature butter.*
  2. Small home prices made a surprising rally this month, leading me to believe that they must be more in demand than larger homes. Whether it’s due to investors building rental portfolios, people looking to downsize and simplify, or just more people qualifying or less house is hard to say for sure.
  3. Stricter loan guidelines are forcing some buyers out of the market.
  4. As conventional loan qualifying standards continue to tighten, home buyers continue to flock to the  FHA loan.
  5. After over a year of being told that price conquers all, sellers are FINALLY starting to get it. Yahoo!
  6. Lots less new listings mean folks who don’t have to sell right now, simply aren’t.
  7. Prices are coming down, rates are still super low, there’s an $8,000 first time home buyer tax credit and well, come on, what else do you potential buyers want?

If you’re interested in looking at both reports yourself, here is ‘08 and here is ’09. Enjoy and please feel free to share your thoughts and observations.

*No need to freak out. Lower average sales price and lower median sales price do not necessarily mean that your personal home has depreciated.

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Author: Suzy

Hard working Knoxville real estate agent by day. Intrepid Knoxville real estate blogger by night.

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