February 2010 Knoxville Home Sales Report
It’s everybody’s favorite time of the month again — Knoxville Home Sales Report time! You know, the time when we take a moment to sit back and reflect on home sales in the month that was. Good times.
And while I usually like to wax nostalgic about what happened in that previous month, this time I’d like to talk a little about a few issues that may have an impact on home sales in the months to come:
- FHA Changes It’s no secret that FHA loans have been a huge boon to the market over the past two years. Well, now we have some changes coming down the FHA pike in the next few months, including higher minimum down payments & fewer seller concessions that are bound to knock some buyers out of the market and have an impact on the spring sales numbers.
- Tax Credit Expiration It’s also pretty common knowledge that the home buyer tax credits have helped home sales as well. While we probably won’t see a real impact from the expiration of these tax credits in terms of closed sales until the closing deadline hits on June 30, the “under contract” deadline of April 30th is fast approaching and many say it is unlikely to be extended.
- “Shadow” Foreclosure Inventory We’ve heard about this “shadow” inventory for a while, but now there are estimates that between 5 & 7 million homeowners are “eligible” for foreclosure but have not yet had their homes taken back by the bank. The worry here is that as these homes slowly do come on the market, they will undercut housing prices just as the market is starting to stabilize. Me no likey.
- Possibility of rising mortgage rates The government is set to stop buying mortgage backed securities from Freddie and Fannie Mae on March 31st. This is what has largely helped keep interest rates at historic lows for the past several months. While this more than likely won’t lead to the rise in rates that some had first predicted, odds of rates rising some from current record lows are pretty good.
So, I hear you saying, “Thanks, Suzy, for being a total bummer. Geesh!” and I totally understand that. But I’m not trying to be a bummer. Really. I’m just trying to inform and educate you about what’s going on in real estate both locally and nationally, whether it’s good, bad or downright ugly. I also think it’s important to know what’s coming so that we can all prepare for it. If you’re a potential buyer who’s planning on going FHA, that might mean going ahead and getting off the fence before the changes take effect and you no longer qualify or have a harder time coming up with funds to close. If you’re a current homeowner, that might mean going ahead with that refinance now while rates are still super low. If you’re a seller, that might mean making those improvements or lowering that price now while the tax credits/FHA/low rates stars are still aligned. And if you’re just a real estate enthusiast/concerned citizen, well, you should probably just brace yourself. Just in case.
Having said all that, I still think that the combination of the tax credits, low rates interest rates, and availability of FHA loans will keep pending sales relatively strong though this month and probably into April as well and closings should stay strong through June. See, that’s not such a bummer, right?
So, now that we have a little bit of an idea of the shape of things to come, how about the shape of things that have already come and gone? Without further ado, allow me to present you with the February Home Sales numbers, broken down, as usual, AAKT style. Enjoy!
Starting off with good news in the home sales department -
Total number of condo units sold is (slightly) up.
Feb ’09 – 52
Feb ’10 – 58
And then there’s that not-so-good sales prices news -
Feb ’09 – $105,500
Feb ’10 – $79,100
Feb ’09 – $78,000
Feb ’10 – $65,000
Feb ’09 – $147,400
Feb ’10 – $143,500
Feb ’09 – $134,000
Feb ’10 – $130,000
Feb ’09 – $264,000
Feb ’10 – $261,700
Feb ’09 – $230,000
Feb ’10 – $210,000
Feb ’09 – $159,600
Feb ’10 – $143,200
J————
Feb ’09 – $141,000
Feb ’10 – $122,300—
Feb ’09 – 120
Feb ’10 – 122
Conventional loans were once again down…
Feb ’09 – 310
Feb ’10 – 262
…while FHA loans were once again up.
Feb ’09 – 116
Feb ’10 – 146
And here’s the “We gotta sell this thing before the tax credits expire!” news-
The number of new residential listings was (way) up...
Feb ’09 – 2,066
Feb ’10 – 2,391
…and so was the number of new condo listings.
Feb ’09 – 240
Feb ’10 – 283
Finally there’s the “And let’s get this thing priced right before those tax credits expire” news -
Feb ’09 – $195,900
Feb ’10 – $178,900
Feb ’09 – $240,000
Feb ’10 – $235,300
- Knoxville residential and condo sales numbers are still treading water, but sales prices could seriously use a life preserver.*
- The perfect storm of home buyer tax credits/low interest rates/availability of FHA financing is certainly partly responsible for keeping sales up again this month.
- Lower list prices –coupled with buyers negotiating like gangstas — may be resulting in overall lower sales prices in the Knoxville area.
- Low sales prices or not, many sellers are still willing to bet it all on the above-mentioned tax credit/interest rate/FHA loan trifecta and are going ahead and rolling the listing dice now.
- Agents all over Knoxville will be busting our collective butts for the next two to three months. Have you hugged your Realtor today?
If you’re interested in looking at both reports yourself, here is ’09 and ’10. Enjoy and please feel free to share your thoughts and observations.
Author: Suzy
Hard working Knoxville real estate agent by day. Intrepid Knoxville real estate blogger by night.
Damn it feels good to be a gangsta
*hug*
So how exactly quickly do you think these changes take place?
Sorry for the late response, @tnrkitect, but the Fed is going to stop buying mortgage backed securities this week, I believe. As for FHA, I think those guidelines are going into effect in a month or so, although I’m reading conflicting info online. There will, of course, be more updates here as news breaks