Rising home prices, low inventory and high demand for new homes has put Blount County’s housing market in a unique but strong position for buyers and sellers in 2020, Realtors said.
They have had little trouble selling homes to eager buyers, but the primary challenge has been the lack of new houses available on the market, agents said.
“There’s a real shortage of housing units nationwide, not just in Blount County. ... There’s been a lack of subdivisions being developed. Blount County and other areas are running out of land,” said Mike Brown of Pinnacle Financial Partners.
The lack of new housing in Blount County has caused intense bidding wars between buyers, along with many offers above listing prices.
Realtor Jackie Mills of Realty Executives Associates has experienced the high demand for homes firsthand.
“I had 10 offers on it in less than 24 hours,” Mills said of a recent sell.
Sparse housing has been a challenge not only for buyers, but also for homeowners looking to upsize or downsize in the Blount County market.
“Those sellers are afraid to put their house on the market because they’re afraid ... they’ll get such a good deal that they can’t refuse it and then where are they gonna live?” Mills said.
She likened the housing situation to a revolving circle: Sellers listing their homes are fearful of selling too quickly and ending up in the same position as current buyers in a competitive market.
“We have a huge buyer boom, but right now it’s really a seller’s market,” Mills said, adding that while the current state of Blount County’s housing market favors those selling their homes, many are considering waiting until the supply and demand even out before moving up or downsizing.
Much of the high demand for Blount County housing has been from factors like the record-low interest rates for mortgages and mass migration from large cities, experts said.
Mills has seen many homebuyers migrating to Maryville from places like California, New York and Michigan, she said, adding many city dwellers have migrated to Blount County in favor of its cost of living, solid infrastructure and proximity to the Smoky Mountains.
“People are moving here because of the infrastructure and because of the mountains. ... The school systems are phenomenal, our policing system is stellar, there are so many variables that make people want to live here,” Mills said.
Perhaps the biggest reason for the demand for new housing is the record-low interest rates for loans and mortgages currently around 3.25% for bank prime loans: https://www.federalre serve.gov/releases/h15/.
“The interest rates have really driven a lot of the growth in the market. I’ve been in business for a long time and these rates are at historic lows,” Brown said.
Demand for new housing also has been driven by the emergence of first-time buyers who are late millennials and Generation Z. They make up around 18% of the total U.S. population and possess a 2018 estimate of $198 billion in collective consumer spending power, according to a consumer insight study from Clayton Homes.
“Home technology, floor plan variety, flex spaces and environmental sustainability are the forefront of the Gen. Z consumer mindset,” Julie Link of Maryville-headquartered Clayton Homes said.
Housing industry professionals in Blount County have yet to see a major increase in Generation Z homebuyers, but they have seen a steady rise in first-time homebuyers in 2020.
Mills says many of her Generation Z clients start off looking for rentals, “but a lot of times I’ve turned them into buyers.”
She credited the wide variety of homebuyers for Blount County’s market.
“You could be working with a 25-year-old in the morning and a 65-year-old in the evening. ... It’s a vegetable soup of diverse people,” Mills said.
Although the Blount County housing market has rebounded successfully from the initial uncertainty caused by the pandemic in March, many experts still fear a national housing market collapse in the near future due to rising costs and lack of supply. Blount County experts said they are keeping the economic predictions in consideration, but believe that the county’s diverse industries and healthy economy will prevent any major housing collapses in the short term.
“I don’t expect any collapse or anything along that with the housing market this year,” Brown said.
Mills considers the potential housing market collapse as serious but said she remains confident in Blount County’s infrastructure and economy.
“Because Blount County is such a strong place to live, I haven’t really worried so much about Blount County. I worry more about bigger cities such as Nashville,” Mills said. “I think that if we were gonna see it happen from the pandemic, we would’ve already seen it.”
The economic state of the national housing market is vastly different from the collapse in 2008 and 2009, considering the supply and demand in 2020.
“The housing market in 2008 through 2010 was a lot of supply and not a lot of demand, and now there’s a lot of demand and not a lot of supply,” Mills said.
“I think they fixed those things within the lending institutions (during the recession).”
The COVID-19 pandemic has devastated countless industries across the world, but the U.S. housing market is one of the few industries to recover from the initial economic turmoil in March, statistics show. New methods of handling business have allowed Realtors and banks to continue operations safely.
Customers are able to conduct meetings with banks via Zoom, FaceTime or over the phone “without ever actually having to appear inside the bank office,” Brown said.
About 50% of the workers at Pinnacle Financial Partners are able to work from home to further reduce risks of spreading the virus, he said.
Realtors have expanded the online aspect of homebuying to provide more information, better virtual tours and more for clients looking to buy.
Mills has expanded her company’s social media presence with virtual tours to provide more viewing options.
“It proved to be a pretty good thing, and it’s actually something that I’ll probably carry on over into when COVID has passed,” Mills said.
This year has proved to be a challenging year for all involved in Blount County’s housing market, but many remain optimistic about its current state and near future.
“We’ve got a very diverse economy. ... We’ve got a good business climate as well,” Brown said. “Buying a home is one of the major events that people go through in their life, and it’s really gratifying to be able to help people accomplish that goal.”