Will the Mortgage Meltdown Touch East Tennessee?

Knoxville (WVLT) - Nationally, the numbers could leave you numb. New home sales last month were at their lowest levels in seven years. The median price is down 7.5%.

So far, East Tennessee has seemed nearly bullet proof to the housing bubble and mortgage meltdown.

Volunteer TV's Gordon Boyd looks at whether that armor can hold.

Most realtors will tell you it's a buyers market, assuming you can get the loan if you get the price.

But, our market also is a multiple market, filled with new buyers, upgraders, empty nesters, and people fleeing for Florida.

"We saw other condominiums. The construction is good, that's one of the reasons we liked it, what we saw," said George Nasser.

The signs promise deals in Drew's Meadows of Maryville.

But George Nasser is still glad he bought last year.

"It's supposed to be a buyers market, I think market is still pretty good around our area and we're pretty happy. Things have gone. Things have appreciated in the year we're here," said Nasser.

This summer, the average Knoxville-area home has sold for about $7,000 more than last year.

But, it's staying on the market almost two weeks longer.

"Lending has tightened up in the last few months, and it takes higher credit scores to quality for home equity loans, purchase, even refinances," said Steve Cressley, a mortgage broker.

Which could help explain why, with more homes offered this summer compared to last, fewer of them have sold.

"People out of Florida are moving up here in droves, simply because the economy is better, taxes, things like that," said Karen Alexander, a home remodeling show promoter. "A lot of your northerners, who are retiring, they can get more for their money in Tennessee than in Florida, because of the higher cost."

The folks behind Townsends Terraces at Fox Ridge are counting on it.

Even though some mortgage lenders claim tighter markets could give you more wiggle room on higher end homes.

"We see our buyer as maybe a baby boomer, someone that's used to living in a larger home, maybe in the city, they want to be in the mountains," said Ronnie Hayes of Terraces at Fox Ridge.

Still, Vincent Bishops fellow kitchen cabinet makers say they are seeing more remodeling than new construction.

New homes are easy to find.

Builders are asking $300,000 or more in Maryville's Brantley Place.

Some of the homes have been on the market almost two months.

That al has George Nasser standing pat.

"The construction is good, that's one of the reasons we liked it, what we saw," said George.

The combination of a strong economy and diverse group of buyers seems to be holding prices even when the housing supply grows.

Whether that continues, depends on how long buyers hold out, or builders and sellers hold firm.


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