Which is the best deal, a CD or buying a home in Knoxville?

Posted by Jim Lee, REALTOR® @ 4:25 pm, April 30th, 2008  

That’s sort of a hard comparison to make but follow this train of thought and see if it makes sense to you.

In the 1st quarter of 2005 the average price of a 3 bedroom home in Knoxville, Tennessee was $141,700. In the 1st quarter of 2008 the average price of that same 3 bedroom home has increased to $158,300.

Assuming a buyer put 20% down on the 2005 home that would have been $28,340.

knoxville tn homes for sale jim lee knoxville farragut realtor

If you took the same $28,340 and bought a CD at a local bank or credit union at the best rate I’ve found, which is 3.6% for a $100,000 CD or above (I’m giving the higher number to the CD) you would have earned $3,172 in interest.


Your $141,700 house you bought in early 2005 would have now been worth $158,300 which means you would have $16,600 in equity AND you would have been enjoying living in your own Knoxville home the past 3 years.

So which is the best deal; $3,172 interest (taxable by the way) on a CD and no house or $16,600 in equity and a new, 3 bedroom home for you and your family to enjoy?

PS, contrary to all the “Doom & Gloom” stories you’re bombarded with daily on the news; not all the US real estate markets are losing value and undergoing massive foreclosures.

In fact around many cities the housing market is moving along pretty well; Knoxville, Tennessee is one of those cities.

We’ve never enjoyed (if that is the right word) 10% appreciation monthly in home prices like southern California but we’ve also never experienced 50% price and value declines either.

Here’s a great place to look for your own 3 bedroom home to live in and probably enjoy an increase in value over the next 3 years and beyond, www.KnoxvilleHomeCenter.com

Photo blogging on the trail in the Great Smoky Mountains

Posted by Jim Lee, REALTOR® @ 8:55 am, April 28th, 2008  

Alright, spring fever finally got the best of me this past Friday. Two of my hiking buddies and I took the day off and went to the woods; no cell phones, no computers, and very, very few other people.

It was a great day for a hike. We drove over to the Cataloochee Valley on the North Carolina side of the Park and hiked the 7.5 mile long Boogerman Trail named for a former local Valley resident whose real name was Robert Palmer. There are several stories about how Mr. Palmer got the nickname “Booger” but the most commonly accepted one came from his early school days.

The teacher was going around the 3rd grade class asking each pupil what they wanted to be when they great up and Robert said that he wanted to be “the Boogerman” and the nickname stuck.

me (running), Don & Bill at the start of our hike

this is the kind of photo you get when you only set your camera timer for 2 seconds instead of the 10 you intended. 😉 Oops!

Trying again with a 10 second window to get into the photo, this one turned out a little better.

A scenic overlook in the Cataloochee Valley

Don Anderson, Jim Lee, & Bill Furlong ready to enjoy a day in the back country.

We could not have bought better weather. It was in the mid 60s, big fluffy clouds overhead, and a light breeze; perfect spring hiking weather in east Tennessee.

The Boogerman Trail is home to some spectacular old growth Poplar forests. We got on the trail about 10:00 AM and took a lunch break at noon by the base of a huge Poplar tree that turned out to be hollow. It was large enough for the 3 of us to fit comfortably inside with room for 2 or 3 more!

3 hikers in a tree

Me, Don, & Bill inside a HUGE hollow tree.

There were lots of wildflowers in bloom with Painted Trillium being the most abundant. There were lots of them along most of the length of the trail.

Painted Trillium in bloom along the Boogerman Trail

The delicate white blossoms of the Painted Trillium are a beautiful springtime sight in the Smoky Mountains.

there are around 20 stream crossings on this trail with the widest ones bridged by footlogs; Here’s Don Anderson making his way across one over Caldwell Fork.

don anderson crossing on a footlog

Don’t slip Don, that water is very cold this time of year.

Below is a scenic view of Caldwell Fork as we neared the end of the trail.

Caldwell Fork in the Great Smoky Mountains National Park

Tired but refreshed from our day in the woods we came back to Knoxville and the world of real estate, computers, and cell phones. Too bad you can’t still make a living in spots like this one.

www.KnoxvilleHomeCenter.com is a great place to look for a new home in the Knoxville area.

One of the many great things about Knoxville is that you can be at many spots like the one pictured above in less than an hour.

Welcome Knoxville mortgage banker Debbie Nieto, my first guest blogger.

Posted by Jim Lee, REALTOR® @ 3:16 pm, April 17th, 2008  

I’m delighted to have my favorite Knoxville area mortgage banker, Debbie Nieto of CTX Mortgage Company as my first guest blogger.

debbie nieto, ctx mortgage company

Debbie Nieto

Debbie has written a great list of reasons why, despite all the negative real estate news the local and national media keep insisting on promulgating, now is a great time to buy or sell real estate in Knoxville, Tennessee.

And now without further ado; here’s Debbie

“Put the facts on your side!

In today’s housing market, we all know how important it is to get buyers and sellers back into the game. Unfortunately, the media’s continued focus on negative real estate news is keeping many people solidly on the sidelines. But remember, these people aren’t getting the whole story. And the facts they’re missing can alter their mindsets. All we have to do is put those facts out there!

Fact #1: Some six million Americans are expected to buy a home this year. Six million people in the game make up a pretty big game. That’s a level of sales equal to the one we experienced in 1998—by all accounts, a pretty good year.

Fact #2: There is still over $23 trillion of value in u.s. housing stock. Home ownership continues to be the basis of our wealth in this country.

Fact #3: The housing market cannot help but grow. Our country’s tremendous wealth, liquidity, and entrepreneurship will continue to drive our economy. 70-100 million people will be added to our market in the next 40 years.

Fact #4: Real estate is cyclical. The biggest fear in good times is that the fair weather won’t last forever—because it doesn’t. But the reality of a cyclical real estate market also provides its brightest hope in bad times—foul weather won’t last forever either. What’s happening today is a market correction, severe in some places, but it’s not the end of the world. As shown by Fact #1, people are still buying and selling homes. The markets will stabilize.

Fact #5: 2008 is the best year to buy a home in 35 years. 1973 was the last time mortgage rates were this low in a buyer’s market. We had rates this low in 2001 and 2002, but those were strong seller’s markets with little inventory. The last two big buyer’s markets, in the early ‘80s and early ‘90s had much higher rates. Low rates and good inventory make 2008 the best year to buy in decades!

Fact #6: First-time buyers have a real advantage in today’s market. First-time buyers can buy at a reduced price without having to sell at one too. Higher limits on lower cost conforming loans also help first-time buyers purchase more home for their money. Today’s ‘starter’ homes can be pretty impressive.

Fact #7: First-time buyers lose money while they wait on the sidelines. First, renters typically pay more state and federal income taxes than homeowners with a mortgage deduction. Renters are also losing the wealth they could be accumulating as they pay down their mortgage and as their home increases in value over time (as it surely will). Lastly, renters who wait to buy will lose money if interest rates increase by the time they finally act. Higher payments from higher interest rates represent money buyers could have kept if they had bought earlier. Conversely, if they were willing to spend that amount of money earlier, they could have bought more home.

Fact #8: Homes sell when they’re priced right and show well. Buyers are looking for value in today’s market. When sellers make their home’s value obvious, they make a sale—it’s as simple as that.

Use these facts on your website, in blogs, and in conversation whenever you run into reluctance from a prospective buyer or seller. The best way to fight negative media is with the facts they’re leaving out!

… Have a great month!”

Have a great month indeed!

And here’s a link to find some homes for sale to put Debbie’s excellent advice to work for you.

When you find a great home, Debbie has the cash to buy it with and I have the keys; call us please.

Knoxville Tennessee sales reports

Posted by Jim Lee, REALTOR® @ 1:02 am, April 17th, 2008  

The 1st quarter sales report for home sales in the greater Knoxville, Tennessee area are out.

As the national media continues with its doom & gloom message for the mythical “national real estate market”, the facts are different and present a more balanced picture.

There is no national real estate market but rather a lot of smaller markets driven by their own economic forces in addition to outside factors.

The greater Knoxville area is one of the positive pictures in the country along with a high percentage of other cities and areas.

“Days on market” (DOM) or simply how long it takes to sell a house is a good indicator of market demand. Knoxville’s dom for the 1st quarter of 2005 was 94 days, it dropped to 88 days in Q1 2006, back up to 93 days for Q1 2007, and 103 days in the 1st quarter of 2008 for a net gain of just 9 days in the past 4 years.

Median sales prices is also an indicator. Here’s the Knoxville picture since 2005

1st quarter 2005, 3 bedroom home  $131,000

1st quarter 2006, 3 bedroom home  $135,100

1st quarter 2007, 3 bedroom home  $145,500

1st quarter 2008, 3 bedroom home  $144,000

So even though it dropped $1,100 from 07 to 2008, there was still a 9% net gain from 2005 to the same time period in 2008.

Home sales figures is a subject near and dear to the National Association of Realtors; here’s some of their take on the current market: Roughly half of metropolitan areas continued to show rising home prices in the fourth quarter of 2007, according to the latest quarterly survey by the NATIONAL ASSOCIATION OF REALTORS®.

In the fourth quarter, 73 out of 150 metropolitan statistical areas show increases in median existing single-family home prices from a year earlier, including 11 areas with double-digit annual gains and another 12 metros showing increases of 6 percent or more; 77 had price declines including 16 with double-digit drops.”

The bottom line of all this number crunch is that now is still a great time to be buying a house in the greater Knoxville, Tennessee area, mortgage rates are still in the 5% range, and there is a great selection of homes for sale.

Visit www.KnoxvilleHomeCenter.com to pick out a few and give me a call or email to go visit them.

Knoxville’s red light cameras, those “silent sentinels” everyone loves to hate.

Posted by Jim Lee, REALTOR® @ 7:19 pm, April 14th, 2008  

In fact Knoxville’s still fairly new, red light cameras are still causing so much controversy one frustrated motorist took a hunting rifle to one that had just photgraphed him and fired three shots into it.

His claim of self defense (he claimed the camera shot first) probably won’t hold much water in a Knoxville court; he is charged with reckless endangerment and felony vandalism.

Meanwhile, just down the road in Chattanooga, 176 lucky drivers are getting their red light camera fines refunded because one irate and apparently very observant, victim………er, wrongdoer, discovered the yellow light cycle was not timed correctly causing the caution light to only stay yellow 3 seconds instead of the 3.9 seconds mandated by safety standards.

Chattanooga’s city traffic engineer claims it was an “accidental mixup” related to turn arrow timing.

If any of these stories are true it might cause you to wonder how “accidentally’ that mixup really was.

Hmmmm, first time I have a few spare minutes I’m going to take my stop watch out and investigate a couple of traffic lights near my west Knoxville neighborhood and see if any “accidents” have befallen those yellow lights.


Mortage interest rates are dropping in Knoxville because I saw it on the news.

Posted by Jim Lee, REALTOR® @ 5:19 pm, April 10th, 2008  

Another perfect example of why not to believe (literally) everything you read in the news.

Most every time there is a story or news item about the Federal Reserve dropping interest rates I get a call or 2 from a potential buyer asking; “What are the new rates, I read/heard/saw they dropped a half a point yesterday.”

Typically they are talking about turns out to be the Federal Reserve rate; that is the rate that member banks charge each other for overnight loans to balance their books each day.

A bank’s balance sheet needs to balance every day so if they have a surplus they lend some to member banks to help them out and vice versa when they have a shortfall; then they borrow to balance the books.

The Federal Reserve has been aggressively cutting those rates to keep the economy humming along since September of 2007. The Fed Funds rate has been dropped a full 3 percentage points to it’s current level of 2.25%.

“OK, that’s all very interesting Jim, but if banks can borrow for less they why can’t they lend for the same amount?”

Good question.

While the federal funds rate of 2.25% only deals with overnight loans between banks, a typical mortgage obligates funds for up to 30 years and to an individual, not a bank. Therefore the risk exposure is greater and is compensated by a higher interest rate.

Since homeowner typically pay their mortgage off every 10 years, the 10 year Treasury note has roughly the same sensitivity to rate fluctuation as a 30 year fixed rate mortgage.

If you take a look at the current Bloomberg rates & bonds you’ll see the current 10 year AAA rated banking & finance bond rate is 5.29% today, the 15 year fixed mortgage rate is 5.22%, 30 year fixed is 5.63%, and the 1 year ARM is 5.65%.

So next time you hear about a Federal Reserve cut in rates please give me a call or email and we’ll check the current rates to see what they are.

2.25% would be a wonderful gift for homebuyers but but my sources tell me that the 5s are probably where we’re going to be for the rest of this year.

Now is a great time to buy and a 5.whatever % interest rate is a very good one and makes more homes affordable to more buyers.

If you’re thought about entering the buyer market make a stop by KnoxvilleHomeCenter.com to see all of the greater Knoxville area’s Realtor listings and then give me a call or email to go out and look at some of them.

Knoxville & Farragut TN sellers need to “lighten up”.

Posted by Jim Lee, REALTOR® @ 8:11 am, April 7th, 2008  

If you’re selling or getting ready to sell your Knoxville area or Farragut home you probably need to “lighten up” the amount of stuff inside.

Living in a house for a number of years, one tends to accumulate lots of stuff. Usually we take far more in than we take out.

Leaning out your closets and garages as well as the rest of the house creates a more spacious appearance and makes it appear larger to your prospective buyers.

knoxville tennessee homes for sale. farragut, maryville, lenoir city, oak ridge, real estate
Here are a few simple suggestions that can create more space in your Knoxville home and make it more appealing to prospective buyers.

  • Box up and pack anything you won’t be needing for the next 3 months. This is also a great time to get rid of things you rarely or never use anymore. Buyers understand stacks of boxes setting around, after all you’re moving. However they do not understand or like closets stuffed full and overflowing as well as garages that will not hold cars.
  • If you have items you haven’t used in over a year consider selling them or giving them away. Selling your house is a great time for a garage sale. You also should consider looking into charitable donations for items you give to non-profits such as your church or local Goodwill type organizations.
  • Consider renting a storage unit, either a PODS type that sets in your driveway until your move or a rental storage unit off your property.
  • A side benefit to getting rid of ‘stuff’ is that moving companies charge by weight and distance. If you have less stuff your move will weigh less and cost you less.

Find more great home selling and buying tips at www.KnoxvilleHomeCenter.com

Get a FREE copy of my new book, “450 Ideas to Help Your Home Sell FASTER!”

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