Existing rental home prices in Gatlinburg/PF areas

[Kyle Smith]

A host on one of the recent BiggerPockets podcast said, "...the market for existing homes is so high in Pigeon Forge we are leaving this market for investments elsewhere." (paraphrasing)

The price points for existing cabins selling in Gatlinburg/PF are getting so high it's tough to make the numbers work.  I know a large number of cabins with views are selling on average 75-125k higher than they were 2 months ago.  Cabins without views are selling at "10 out of 10 view" prices.  It's pricing some of us out, especially those of us relying on 85/15 financing for these properties.  I'm not sure how long the market can keep this up.  Demand is very high and supply is low.  I would have thought many of the cabin owners would take the cash and run but they are holding onto their properties.

Your thoughts on the trend?  What can we expect next year?

Thanks

[Ryan Moyer]

Originally posted by @Justin Anderson:

The problem/challenge is that these cabins are still generally cash flowing really well.  So even though the prices are crazy inflated/inflating, the deals still make sense.

It really is hard to justify spending $350/sf on a tiny one bedroom but when you can cash flow $700-1000/month at that price, how do you say no?

I imagine some builders will move in to suck up some of the gap between construction prices and list prices, but for now things keep chugging along....  Definitely makes me wish I would have just went all in a couple of years ago, though!

I think the question is whether they can still cash flow $700-$1000/month next year after being locked into that price.

Occupancy seems way up since things opened back up after COVID and people are looking for vacations where they can drive and stay in.  I know in my local area in Southern Utah occupancy is up almost 100% compared to the same months last year.  I don't expect the difference is that large in East Tenn but it definitely seems to be spiking this year compared to a typical year.  I know I see listings for ~$800k properties that have done $100k+ gross this year and $70k last year.  That $800k price tag makes sense in a year where it's pulling in $100k+ but I wonder how those margins will look on an $800k mortgage if it returns to the ~$70k range in 2021 or 2022.