I hope you and your family are staying safe as we navigate the global challenge of the coronavirus.
As a cabin owner, it’s important to me to keep you updated as to the values of your real estate in the Great Smoky Mountains. This is a very unusual time, and a very difficult time to predict what the aftermath of this crisis is going to mean to real estate values. However, we do have data from our last challenge with the National Park Wildfires. And, we have insights that we gained as we worked our way through the national economic downturn more than 10 years ago. So, we can see ahead at least to the end of this year.
To understand it a little better, let’s look at where we were right before this all began. We just came through the first quarter of 2020, with record sales and high values. Visitation to our area and occupancy rates broke records. We saw over 12.5 million visitors to the National Park (setting a new record). We climbed to the top of the market in terms of property values and reached pre-economic downturn figures. Inventory continued to be down being a part of keeping values high. Then the coronavirus happened…
So what to expect? Of course April and May will be very extremely quiet. The National Park is closed at the moment as well as all our large venues, Dollywood Theme Park, our shows, our convention centers. Rental income will be fairly dismal.
We believe two new sellers emerge out of this crisis. Most of our cabin owners have significant equity in their cabins. We are fairly certain that there is going to be flurry of cabin sellers over the summer. These new sellers are going to use their cabin equity through a sale to help their families heal financially. The other seller is a second home owner who did not make a purchase that pays for itself and will need to sell as their discretionary income will not allow them to continue this luxury as the rental market makes a comeback. It will be about the middle of the summer before these sales will be recorded. This is important as these sales will almost surely drive values down. However we expect there to be continued demand among buyers. So it’s not likely that we will see dramatic shortsales or high rates of foreclosures the way we did in the downturn. We believe that lending will continue to offer low rates making it attractive and possible for buyers to purchase. We think some of the more creative loans will disappear and banks will become more conservative on terms and approvals of loans. But healthy sales will continue but not at the level of 2019.
Therefore, we are going to recommend that if selling is to your advantage you go ahead and get ahead of this group. If you are in a position to hold your property we recommend that you remodel, deep clean, enjoy your property. We are here for you if you want to discuss this in more detail. We are working from home at the moment! But so are you! My cell is 865-765-6157, or you can email me at deborahkorlin@gmail.com – text is always wonderful as well.
In the meantime, if you have time and want to read more sign up for my monthly email newsletter and get on my blog site. I will continue to follow the results of this crisis and what it means to Smoky Mountain Real Estate values. We will also update you on events as we open the National Park again and all our attractions, shopping and restaurants in the Gatlinburg/Pigeon Forge area. We will also list investment opportunities as they appear, featuring homes and cabins currently on the market. If you have money to invest in a cabin, let us know that as well. We have sellers who won’t list their properties on the market publicly as they do not want their rental company to withdraw marketing efforts but they would sell. They want to buy stocks – imagine that. They expect a rebound in several years, believe they will double their money, and then return to the Smokies to build some more over-night rental cabins with their profits!
Goodness! It’s a crazy time no doubt! My company and I sincerely hope and pray you are weathering this storm well and I know we will all appreciate the sunny days ahead.
