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Knoxville home builders struggle to meet real estate demand

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The housing shortage in Knoxville is not going to go away. One solution seems obvious: Build more houses.

But builders are currently facing major challenges, including high material costs, delivery delays, labor shortages and a lack of available real estate.

And the pressure is getting even tighter: According to Amy Brooks, managing director of Knoxville-Knox County Planning, Knoxville will need around 40,000 more housing units by 2050 for the region’s growing population.

John Cook, president and CEO of Cook Bros. Homes and current president of the Home Builders Association of Greater Knoxville, said Brooks estimate is low compared to the demand he experiences at work.

“In the world of home building, 2021 is basically the best and worst time,” Cook told Knox News.

A study by the National Association of Realtors estimates the US will need an additional 6.8 million housing units to meet demand.

Home builders say everyone must work together to solve Knoxville’s utility problem and save its reputation as an affordable place to live.

Calculating building costs is a guessing game

Building houses is currently expensive and unpredictable.

Rising material costs and manufacturing delays make it difficult for builders to estimate how much a house will cost.

“For the past 20 years, we’ve always had within 1% of what it will cost us to complete this house,” said Cook. “Today, with my 20 years of experience, my confidence in our ability to predict how much it will cost us to build a house is not good.”

In May, the National Association of Home Builders reported that higher wood costs increased new home prices by an average of $ 36,000.

PRICES:House prices in Knoxville are rising faster nationwide than in Nashvilleville

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In addition to rising costs, the lack of available land in East Tennessee is a cause for concern.

Builders buy land and prepare it for housing by providing necessary infrastructure, including roads, utilities, sewers, electricity, and more. Then they sell the empty land to a construction company to build houses.

Instead of selling individual plots of land to builders, many property developers are pushing to sell entire areas when infrastructure prices rise. Cook said buying so much property was “financially not feasible” for his company and other local businesses. The result is less buildable land for local builders.

“The amount of arable land is declining and shrinking pretty quickly,” Brooks told Knox News. “We live in an area of ​​the country that has a lot of topography. We have a lot of water. So the land that has yet to be developed is more challenging land. I think that will prove to be more.” a challenge for the development community. “

What is the bottom line for buyers?

Buyers looking to build a new home have to endure long waiting times, high costs and less choice.

Prior to the pandemic, Cook said his company would agree to build houses up to nine months before construction begins. Back then, it was easy for Cook to estimate the price of a house. Despite the high demand, it turns buyers away because it is impossible to keep a promise about the final cost.

“It hurts the real estate market because people aren’t getting a house as quickly as they want, but as builders we need to protect ourselves and not sell anything we can’t build for the agreed price,” said Cook.

Cook told Knox News that his company won’t sign contracts again until August and will only take on three new customers. He hopes to start building these houses by December and said it could take five or six months.

“As a businessman, I don’t want to turn people away,” said Cook. “I don’t have any other options right now.”

Can solutions come soon enough?

If Knoxville’s housing supply is not replenished, the area’s affordability and economic growth will be at stake.

“If there isn’t enough housing then the price will just keep going up until it gets out of hand and people are priced out,” Cook said. “I don’t think that’s good for the community as a whole, and it certainly isn’t good for companies that set up here.”

According to the 2020 Knoxville-Knox County Planning report, the number of housing permits decreased 9% year over year but increased 18.5% compared to 2016. Brooks believes the construction is on track for further growth even after this year’s sharp surge in demand. Cook isn’t so sure.

“We’re in such a hole right now, we can produce houses at the pace we are building today, and we wouldn’t be rid of it in five to ten years,” said Cook.

Raising housing construction will require political changes from local government, commitment from construction companies and investment from stakeholders. Brooks said it’ll take creative thinking to get there.

“Part of the solution is rethinking the housing mix,” said Brooks. “Meeting demand exclusively with single-family homes may not be feasible, realistic or desirable in the future.”

John Cook, President and CEO of Cook Bros. Homes, is photographed on the site of a house currently under construction in The Grove at Cedar Hills in Lenoir City on Monday, June 28, 2021.  Cook faces unprecedented challenges as a home builder, including delivery delays, labor shortages and unpredictable costs.

Knoxville-Knox County Planning is working with Knox County’s Comprehensive Land Use and Transportation Plan announced in May to make building more accessible and affordable.

The plan will guide land use and transportation decisions for the next 20 years and identify areas in Knox County that should be preserved and that are suitable for growth.

Opportunities Sale, Government Affairs and Policy Director of the Knoxville Area Association of Realtors, has suggested ways governments could address housing shortages and facilitate home construction.

  • Reduce approval fees and get an expedited review, especially for homes under $ 250,000.
  • Expand vocational education and training programs in public schools to increase the supply of skilled workers.
  • Prioritize room layout to increase residential density in work, retail, and transit corridors.
  • Create incentives for converting older or unused commercial space for adaptive conversion and residential use through tax credits and other means.
  • Eliminate or reduce mandatory parking requirements along traffic and trade corridors.
  • Compile a database of vacant, abandoned, and derelict properties and remove any barriers to their revitalization.
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Home Appraisal Discrimination Puts a Dent in Black Wealth | Black Voices | Chicago News

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Research shows that black homeowners run the risk of losing the value of their homes because of discrimination in Chicago appraisals.

A 2015 study found that homes in predominantly white neighborhoods were rated more than three times higher than black and Latino neighborhoods, even after taking into account amenities and household income.

Across the country, black homeowners report that their homes are not rated higher until owners have removed all evidence of being black – family photos, for example.

Now there is growing pressure to pass state laws to protect black homeowners from valuation discrimination. US MP Bobby Rush (IL-1st) supports a bill to set up a task force to solve this problem, the Real Estate Valuation Fairness and Improvement Act (HB2533). Rep Rush also sent a letter to the Government Accountability Office requesting a study on racial bias in home evaluations this year.

Rush says he himself was a victim of valuation bias earlier this year when a white appraiser submitted a valuation of his Bronzeville home that was more than $ 250,000 less than Rush expected.

Lutalo McGee chairs the Discrimination Task Force at Illinois Realtors. He says the task force’s first goal is to make more realtors and homeowners aware of the problem.

“As realtors, we really just need to be familiar with the review process, how to work with reviewers, how we advise our clients on cases where we feel reviews have been unfair, and … prices when they come up,” said McGee . “We are here to educate and empower our customers. Both buyers and sellers. “

And the organization hopes HB2533 continues the work of eliminating inequalities in property valuation and increasing the number of black appraisers.

“Our second mission… is to ensure that our brokers and our members understand how the valuation process should work and are able to manage this process successfully. And ultimately, we hope to influence changes to the regulatory framework and guidelines that govern assessments and how assessments are conducted to ensure that things are unbiased and fair for all parties. “

Junia Howell, visiting professor of sociology at the University of Illinois Chicago, says the big differences arose over more than a century and are part of the legacy of decades of housing policy discrimination.

Howell’s work examines the legacy of redlining in national and local trends.

“What we colloquially refer to as redlining – or the process of literally going through government, going through neighborhoods and rating them and giving higher scores to the whites and the wealthier – is still because of the way we use sales comparisons We have approaches today based on these historical sales as well as various levels of bias built into the systemic element and the decisions of individual appraisers, ”Howell said.

Howell says the practice is nothing new and the effects linger.

“These effects are racial inequality, health effects, environmental effects. They’re ubiquitous because the way we value property affects how taxes and schools work, and affects all of these different components, ”Howell said. “And I would like to emphasize that although all individual prejudices are definitely part of the story and we urgently need more diversity in this area, we also have to be ready to think seriously about how the larger structure in the system is built … because this” Even deeper problems are somehow eliminated with this racial inequality and this perpetuation of inequality that we have continued for almost the last century. “

Real estate appraisal trainee Marcus Knight is relatively new to the industry – he only started work eight months ago. As a black man, he is a rarity in his job – according to the Appraisal Institute, less than 2% of reviewers nationwide are black. The former non-profit director says he was motivated to become a valuer when he realized the power real estate valuation can wield in underserved communities. Knight calls the evaluation process a mixture of art and science.

From Knight’s point of view, the reviewer’s race is less critical than a deep understanding of the neighborhoods he is reviewing.

“You need local market experts, and the most important thing is that you don’t have a lot of black and brown appraisers,” Knight said. “So, you know, if you could bring in more blacks and browns who know these areas … [comparables] for object properties that lead to … a fairer evaluation of the properties. “

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Jim Valentine: Real Estate’s confused sea

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Jim Valentine on real estate

Saturday, October 16, 2021

Real estate markets are very similar to an ocean in that they are made up of an infinite number of variables that create many different “moods”. We had a very strong “current” real estate market for most of the year. This situation is easy to spot and many have participated in it to keep it going. While there is still strong “flow” in the market, other factors are starting to stir it up a little.
On the ocean there is a situation known as the “confused sea”, which is defined as a severely disturbed water surface without a single, well-defined direction of wave motion. In such situations the waves go in all directions and create confusion. There are times in the real estate industry when we have such tangled maritime circumstances and it seems like we are about to step into such a time. What could be causing such confusion in such a strong market, one might ask?
The change in the population is interesting. We are seeing an increase in listings in several market segments. One can only wonder why they waited, but it is very likely that these new sellers will see the market weaken and want to intervene before it’s too late. The market may no longer be what it was, but it is still very strong. Buyers may be able to find a home now, but there are other factors that are causing the swirling waves.
Interest rates are rising, which affects the purchasing power of buyers who are restricted in their borrowing. They are still very, very low, but if they increase it can affect the market. There was a time when the interest rates were 18% and 9 points (1 percent of the loan) and we agents said if they ever get back to 12% we could make a living. Buying money from 2.5% to 3.5% is more psychological than financial, but it can have an impact. Other factors at play may cause it to climb a little higher, but it’s still much lower than the dynamic market from 2005 when we had 5 and 6% money.
Inflation has worked its way back into our vocabulary and can cause most of the disruption. The cost of living has skyrocketed ie gasoline, fuel oil / gas, groceries, electronics, cars, appliances, etc. The real impact on daily life is only just beginning to be recognized by the masses, with many public statements reflecting the possibility of this being long term and get worse. Higher cost of living affects creditworthiness.
It is still a good time to buy so that you can own your home and not have to be subject to rent increases or vacate the property because the owner wants to take advantage of this still great market. You can secure a very good interest rate and have stability in your payment. Sellers are more cooperative and therefore allow more conventional approaches to your purchase than the frenzy we had earlier this year which caused many to compromise their emotional and financial comfort to shop in a competitive marketplace. There is still competition, but not as insane. Northern Nevada’s economy remains strong, which is a good thing.
Confused seas have a greater impact on smaller ships. As a tenant, you will feel the confusion in the real estate market more than as an owner. Don’t overwhelm yourself, invest wisely and enjoy the American Dream while everything else is fine. We know from our 40+ years of property sales in Northern Nevada that the market will be cyclical. It always does. Slat the hatches, secure the loose items, and drive off. It makes the ultimate smooth sailing that you are about to experience that much sweeter. Get a plan to sell or buy your home with your realtor and work your plan out.
If you are clear about your wants and needs, you can achieve them in this market. Your clarity will help clear the confusion around you. Work your plan and enjoy the results. Those are the good old days!
When it comes to selecting professionals to assist you with your real estate needs … experience is priceless! Jim Valentine, RE / MAX Realty Partner, 775-781-3704. dpwtigers@hotmail.com

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Kiawah’s record real estate transactions surge 36% for the year, averaging $1.3M per sale | Real Estate

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You are viewing The Post and Courier’s weekly real estate newsletter. Get the latest transactions and the latest news from the fields of development, construction, home ownership and business in your inbox every Saturday.

Kiawah reports record sales of $ 746 million in home sales for the first three quarters

Home sales continue to be strong across the Charleston area, and the upscale vacation island of Kiawah is no different.

Home sales totaled $ 746 million on 562 properties in the first nine months of 2021, which Kiawah Island Real Estate says is the best ever accomplishment for the closed coastal community on the Atlantic.

The numbers averaging nearly $ 1.33 million per sale reflect transactions handled by the agency that makes up the bulk of Kiawah’s sales, as well as sales handled by other companies.

From January to September 2020, total island sales were $ 506 million on 413 properties, a 36 percent increase in sales and a 47 percent increase in dollar volume.

Of all island sales, Kiawah Island Real Estate managed 372 properties for $ 545 million, compared with 258 for $ 345 million in the same period last year. That’s a 44 percent increase in transactions and a 58 percent increase in dollar volume.

The record-low inventory of the island continues with 84 active offers or 1.7 percent of all properties.



House sold

Home sales in Charleston declined for the second time this year in September, compared to the spending spree last year. Warren L. Wise / staff

Home sales are down for the second time this year; Prices do not

Home sales in the Charleston area are still healthy, but they’re not selling at the record rates they were a year ago, and prices continue to rise.

Get the most of real estate news from the Post and Courier, handpicked and delivered to your inbox every Saturday.

Longtime family run inn in Folly Beach sold for $ 3.35 million

According to the numbers

231: Number of units in a new apartment complex planned on the site of a former milk factory on the Charleston Peninsula.

2: Number of times in 4 years Palmetto Brewing Co., believed to be the oldest in Charleston and South Carolina, has changed hands.

8,920: Square footage of a new Dollar Tree discounter planned in Goose Creek.

The historic Middleburg Plantation, built in the 1690s, sells for nearly $ 4.5 million in Berkeley County

This week in real estate

+ Out with the old one: The owner of a long-vacant Bi-Lo supermarket in a shopping mall in Mount Pleasant plans to demolish the building and rebuild two floors of office space above the retail area.

+ Change of hands: A golf course in the Summerville area is now in new ownership after being sold for $ 2.8 million.

+ First phase opens: The first part of a sprawling retail center on the north side of the still developing Nexton is now open.

5 new restaurants in the Charleston area



South

Southbound is a new restaurant coming to 72 Cannon St. in downtown Charleston as part of Free Reign Restaurants, which includes Community Table and Kiki & Rye restaurants in Mount Pleasant. Warren L. Wise / staff

Southbound, a new Charleston-based dining room owned by Free Reign Restaurants, plans to open at 72 Cannon St. on the peninsula in February, while four more new dining outings are on the way in the area.

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Reach Warren L. Wise at 843-819-9269. Follow him on Twitter @warrenlancewise.

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