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Farragut home listings, sales prices up in 2009


The housing market may not be in the slump it is perceived to be, said a prominent Farragut developer and realtor.

“There is no doubt a house today is worth less than it was a year ago when you make a blanket statement, but … was that [original price] over-inflated?” R. Knick Myers, Myers Bros. Holding Inc., said.


“If you bought your house in 2005 or if you bought your house in 1998, has your house really depreciated, or was your house over-valued in 2007?

Myers said perception has affected the housing market and supposedly depreciating prices.

“People say ‘My house was worth $250,000 last year,’ but was it really?” he added.

Statistics from Barry Hensley, Knoxville Area Association of Realtors president and real estate agent with Southland GMAC, back up Myers’ claims.

From May 2007 to May 2009, both the average list prices and average sale prices of homes in the 37934 ZIP Code rose.

“They look pretty decent. In ’09, there were 27 sales with an average sale price of $362,743. In ’08, the average sale price was $352,092 with days on the market of 84,” Hensley said.

“So it looks like the sale price actually jumped up,” he added.

Most homes listed sold for less than the price at which they were listed. For instance, in May ’09, the average listing price was $377,019, more than $10,000 more than the actual average sale price.

While houses are selling for less than the prices at which they are listed, that has not changed since 2007. According to Myers, macroeconomics says if buyers and sellers don’t match, the problem is probably the price.

“There are always homes in a market, regardless of if the market is hot or cold, that are not going to sell at the price someone is asking for them.

“You have to get the price right, regardless of what the market is,” Myers said.

Statistics agree: houses usually sell for less than the price at which they are listed.

Also note more homes were sold in 2007 than in 2009: 49 in the 37934 ZIP as opposed to 27 this year.

One reason people may not be buying homes as quickly as in past years is that they are weighing their options more carefully.

“People are much more cognitive of the good and bad,” Myers said.

“What we experienced basically in 2006 and 2007 was that people would go look at a house and they were so afraid they were going to miss the house, they bought things and paid a price that in any other market they wouldn’t do,” he added.

So what leads to the perception that home prices are falling? And does all this mean that homes often are overvalued?

“It’s so difficult to document [a home’s price] just because [what] your perception was, or maybe just because a house close to yours sold for that price,” Myers said.

“You’re not going to have two houses that are exactly the same,” he added.

According to Myers, even factors such as landscaping and decoration can make a house seem as if it is worth more.

“It is the perception that it is [worth more] because they have nice stuff … Remember, when they leave, they’re taking all their stuff,” he said.

Perhaps the perception that homes are harder to sell comes from the increased time houses stay on the market.

In May 2007 the average home (that was eventually sold) stayed on the market 91 days; in May 2008 that number dropped to 84 and in May 2009, it rose to 152.

“According to the statistics supplied by the K-A-A-R, it is taking nearly twice as long to sell homes within 37934 in 2009 as compared to 2008,” Myers said.

“Despite the greater number of days on the market to sell, it should come as a relief to homeowners in Farragut to learn that the K-A-A-R statistics show that home prices in our area don’t appear to be declining. This might be a testament to what I learned in Real Estate 101: location, location, location,” he added.

The oft-mentioned “Farragut housing bubble” appears to be largely intact, protecting home prices even if the time it takes to sell a home has risen. Perhaps 37934 residents can take heart.

“People are looking for positive things, some reassurance and maybe some perspective that maybe it was unrealistic what they thought their homes were worth to begin with,” Myers said.

 

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