Gatlinburg Price Drops?

Question

Hey folks,

Gut checking myself a bit here. I’m looking for a cabin up to $650k around Gatlinburg (have an offer out on one) and am watching others drop 25-50k or appear to sell for 25-50k less than listing. Anyone else noticing this, or am I just incorrectly looking at 1-2 big drops and making a larger assumption here?

John Underwood · Answer

I have noticed more and more price reductions all over the place.

I think some of it is because people were shooting for the moon expecting to get it and they were wrong.

Also school is starting back so some people have other priorities right now.

Lynnette E. · Answer

I do not invest in that area, but do invest in eastern TN near Knoxville and prices are definitely dropping, much less of a seller's market.  If it is not a brand new listing, go ahead and offer good terms and less than listing price.

Avery Carl · Answer

Hey Erik! The market is definitely softening a little bit. I think those 2 large price drops you saw are a bit coincidental, as it hasn't softened THAT much, but the signs of softening are there. I don't think we will drop back to 2016 prices, but things do seem to be slowing down, although we are still seeing multiple offer situations on most properties.

Luke Carl · Answer

@Avery Carl

Ryan Moyer · Answer

I have no inside knowledge but I think probably two things are happening.

1) People that bought a few years ago and have a ton of equity were cash flowing too well in the summer to sell, but now are cashing in on their equity/appreciation since the rental season is slowing down quickly

2) Now that a lot of calendars are sitting a lot more open in late Aug and Sep for the first time in like a year, some people are likely worried the post-covid travel boom was only temporary and are cashing out before things potentially normalize a bit.

Chaits J. · Answer

@John Underwood : Also looks like some of the lucky 2019/2020 buyers are looking to cash out. Small reductions are nothing before their 100% appreciations.

Wilson Hunter · Answer

I bought my first when the OP created this thread and am now looking for my second. I look every day with instant alerts for my criteria, and there have been perhaps 3 cabins that I would personally have gone for in the past 3 months, whereas spring and summer were insane (took me 8 offers of losing bids to finally get one, extremely lucky with the one I ended up getting making an offer within 30 minutes on one that inexplicably decided not to set a bid date). I’ve seen a lot of these overpriced ones described in the OP, and they are always far from my ideal numbers, albeit I understand that’s subjective. There’s a lot of trash inventory at 650 price point, and you start seeing the projected ROI numbers get better around 800.

What I perceive has happened is that selling strategy shifted a bit with list price being more of a “let’s see if someone will go for this” rather than “I know this is under list but the strategy is to bid up 10-15% over.” There are a bunch of cabins right now that are 25% higher than what they would have been listed for in June/July. Good luck finding anything listed under $400k, for example, whereas the honeymoons were listed for 350/360 and going for 390-400+ cash in the late spring/summer. A literal tiny house might be listed at 399 now, but that’s it.

So while sure, there is softening on these bidding wars I think it’s directly related to a huge jump in price point late summer, but the market is still wild for the best best deals. My favorite listing in the last month had an insane bidding war no different than what you were seeing in the spring/summer.

John Carbone · Answer

Any update on the market post Labor Day yet?

Erik Applegate · Answer

Thank you both! As long as I find cash flow the plan is to keep sending offers and not slow down. Would you advise sending offers that are lower / asking price in general at this point though?

Gatlinburg Price Drops?

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