We are frequently asked, “So what’s going on with new construction in the Smokies, particularly with cabins?”
Oh my goodness – what a question! As many of you know, we have been involved in bringing back new construction to our Great Smoky Mountains for the last two to three years. Through our partnership with developers in Sherwood Forest Resort, we have overseen the construction of dozens of new cabins there. More recently, I shared plans to create additional new resorts in our region. The work has been slow going but extremely rewarding, and we are excited for the future as more cabin construction takes place in those resort locations.
In a nutshell, new construction is continuing to make its way forward. The values of existing properties are escalating to the point that they are close to intersecting with the price of building based on average price per square foot. That is exciting for the contractor, the developer and for you and me! It’s still not easy and market prices are advancing slowly, but progress is being made.
Of course, the loss of hundreds of cabins and homes in and around Gatlinburg has affected new construction in several different ways. As you can imagine, there has been a huge interest in building back destroyed structures. Home owners and cabin owners are looking to replace what they lost in the fire and in some cases are in a bit of a scramble to locate a plan, find a contractor and tie down some material to build back. However, it is not a straight forward process. Building permits are required and there may be new building codes that weren’t in effect when the original structure on the property was built. Owners have so many new issues to consider as they work on a plan to rebuild. For example, the foundations have to be assessed for stability. Can they be reused, or must they be demolished and cleared away before new construction can begin? Do we have adequate utilities? Are the septic or sewer lines still in place? What about the water lines or the well head? What is the resort or neighborhood going to look like in the next few years? These are just a few of the items owners are dealing with, and as a result rebuilding may not be a feasible option. There are many who have decided to not pursue rebuilding but have already replaced their properties with a home in another location. Some have simply decided to wait and see how things go before wading into the decision to rebuild.
Ultimately, I believe there will be several outcomes. One result will be a boost to building. Subcontractors are being attracted back to the area. Those who had laid down the hammer and now work at places like Dollywood may return to the profession. This will create more activity and building opportunities for those who want a newly constructed home or cabin. Along with new construction, we are also going to see a facelift to some areas that were becoming a bit tired as properties had aged. Historic and areas that were well loved like Chalet Village in Gatlinburg will have new life as home owners build new chalets and cabins on property. We are still trying to see the bright side of what was a very dark day. Actually one of those positives is that views that had been lost to thick trees now have outstanding vista views as nature pruned itself.
A side note that many of us didn’t realize is that nature actually needs fires from time to time. It provides and enrichment to the soil, natures fertilizer. There are even seeds that only are activated by fire. You can see it already in the regrowth along the side of the National Park roads as the green growth returns. It looks like a St. Patrick’s Day parade of lime green color!
In the short run, the fires will cause market prices to further increase. The number of residential properties for sale in the Great Smoky Mountains was already a bit down even before the fires. Now it is down even more with the new influx of cabin buyers looking to replace lost properties. Many of them are visiting properties with an insurance check in hand, so they might be willing to be a little more competitive with their offers.
A third result we will see is difficulty in attracting contractors to individual projects as they are in high demand and probably will have more than enough work to keep them very busy for the foreseeable future. However we have been contacted by contractors just outside of our area willing to travel an hour or so to work. I think it will take more perseverance to find a quality, knowledgeable contractor but it will be possible. Feel free to ask for our help as we work our way through the contractors; we can send you in the right direction at least with the right questions!
We have also seen lending open up to new construction. When I started 3 years ago representing builders and developers we could hardly talk anyone into giving us money for logs and nails – but now every month I am being approached by a new lender who is putting their toe in the new construction loan waters. That is really good news. The required minimum down payments amounts are being relaxed. Right now, you can build a residential home for as little as five percent down, and you can use your lot as a down payment. The lending terms on an investment cabin come with a 20 percent down payment requirement for the construction loan.
So if you’ve ever thought of building your perfect home, this is the time to start dreaming with those cabin plan books or house plan books! Construction is back to stay for a good long while! Over the next year, lots of us are going to learn to build again and how to understand new construction… not a bad thing if you are like me, and love construction projects.
As always, I and my staff are here to answer any questions you have about the real estate market or new construction.
A wildfire that’s been described as the worst in the last century came raging from the National Park’s Chimney Top area just a little over a month ago. With so many displaced, it has left us with a real estate nightmare.
Evaluations have determined more than 1,100 properties were destroyed by the wildfire and about as many were damaged in some way in Sevier County.
It is times like this that we recognize the incredible value of human life and the sweetness of each day that we arise to see the sun and smell the coffee brewing. The toll on human life is 14 at this point. Every life is incredibly precious and no words can ever adequately describe the grief, nor can any words ever feel rich enough when we attempt to comfort out friends and family.
But even in times of tragedy, we retain our hope. Resilience and confident resolve is what we heard out of the community leaders, from the mayor of Gatlinburg to the pastor of Roaring Forks First Baptist Church to the mom digging through the ashes to find any keepsake that might have survived. All were looking forward and not backward. All were celebrating the lives that were saved and concentrating on the things that matter: we have each other.
As a REALTOR, my phone began to ring with one caller after another telling me of the house I had sold them. Many of these were second homes, cabins that were to be their ticket to retirement. Now those homes are gone.
“What do we do now?” was the question uttered over and over again with each new call.
I always say there is some silver lining in every dark cloud and I am looking for it now.
Here are some things we can expect. Insurance adjusters will be working day and night for another few weeks to determine property values as they assess the damage from the wildfire. Most of the properties will be covered by some kind of insurance, but many insurance policies will not cover actually replacement. This means that not all of the destroyed structures will build back. Decisions will be made as to whether to just pay off the mortgage (if there was one) and buy an existing home, rent for a short time while life is being sorted out and healing is beginning, or build a new structure on the existing lot.
BUYING A NEW HOME
Buying a new home will probably seem the best route for some who lost their home in the wildfire, so it’s important to understand the challenges before making a final decision. Inventory of total homes in Sevier County for sale is a bit low so those choosing to buy may find they do not have as many homes to choose from as they would like. It may be necessary to move further out of the area and commute. Purchase prices of existing homes are still generally lower than the cost to build new, however. So it might be a win to find an existing home. Each homeowner who has lost a home in the wildfire needs to examine his or her insurance policy to understand the pros and cons of the options offered. Due to inventory shortage, I would suggest that you contact a real estate agent as soon as you can and begin looking at what might be a possible home for your next season.
I would also encourage you to contact a lender and discuss your situation. Ask them about their best lending products. There are a number of loans at this time that do not require any down payment for a very low down payment. Interest rates are also very low, so you will be pleasantly and possibly surprised at the monthly payment. All of Sevier County qualifies for what’s called a rural development loan, which is a government backed loan that doesn’t require any down payment. Another loan that might be needed to give you more options is a rehabilitation loan. It allows you to borrow more than the price of the house in order to remodel or add onto it. This might be necessary as you may not find the exact property you were looking for and you would desire to make adjustments to it. It could even allow you to consider a property that would be an overnight rental cabin or chalet without, say, a garage or storage or a kitchen that is satisfactory but in every other way met your desire. You could borrow enough to cover the price of the home and the changes you want to make. This would allow you possibility of opening up your search. This way, you would have a house to live in while you make it a true home that meets your needs.
If buying a new home isn’t the right option, you do have other choices.
Another option you can consider – and we are asking our sellers to make this option possible – would be to place an offer on a home with a stipulation that you can occupy it immediately while you are completing the insurance claim on your home, and while you are possibly also applying for a loan. In real estate lingo, this is called early occupancy. You are allowed to move into the house that you were buying as soon as you have a binding contract. You go ahead and place the utilities in your name the seller keeps the insurance on the building intact and you keep insurance on the contents during the occupancy time. Depending on how the seller is situated financially, they may be able to waive a monthly fee for this early occupancy. Sellers are particularly inclined to do this when they have received a generous offer on their house. And in some cases they will have a mortgage and would not be capable of allowing of allowing you to occupy without asking for a monthly fee and it would be treated like rent or it could be placed against the purchase price and you would receive a credit. There are a number of ways to approach this. You can depend on a good realtor to guide you in this process.
Those choosing to rent will also find that the number of rental properties available is really slim in our area. You might consider checking into overnight rental companies and see if they have any houses that would do month to month leases. RV parks have become popular for those who are not quite ready to build or buy so they temporarily house themselves in their RV. Perhaps a road trip would be a positive way to get some perspective if you can work from the road or are retired. Perhaps Sevier County individuals who have RV’s sitting in their drive ways would consider renting it to those of us who need some months of temporary housing/shelter? Or it might be possible to purchase one and place it on your lot while you build back.
REBUILDING AFTER THE WILDFIRE
If after looking at your options and your insurance plan it seems that the very best option for you and your family is to build back, then here are some things to keep in mind. It’s important to understand that you may not be able to build back exactly what you had before the wildfire. You’ll want to check into this before you get too far down the road. The reason is that we have had many code changes, particularly in relation to fire codes and so the house that burned may not in today’s world meet regulations. You will want to know whether you are grandfathered in or whether changes will need to be made. You’ll also want to know what type of permit you had for your septic if you were not on a sewer.
Get a diagram from the health department of your septic field line. You may find that your septic system was not permitted for as many bedrooms as you had. This was very common in Sevier County until just a couple of years ago. Before then, when a home was sold the seller and agent were not required to advertise the number of bedrooms it was permitted for, so this discussion may not be something you had at the time of purchase. The good news, however, is that it is possible to increase your field lines and to increase your capacity for your septic but it is something you will want to check into before you get to far into the rebuilding process. Have a geologist check out your foundation and see if it is going to need to be replaced or whether you can build back up on it.
We have many good builders in our area but due to the devastation of the downturn in the economy we lost much of our contractor industry, so we do not have enough licensed builders to handle what will be necessary to restore our area so this will be a challenge. In the last few weeks I have met with builders who are preparing to ramp up their construction companies, who have built many, many Sevier County homes in the past. They will be very well connected and able to handle many projects. You do want to be very, very careful as to whom you choose as a builder. There are so many horror stories and many ways that building can be a heartache (or maybe just a headache). You will want to be careful that you do not go with in a “fly-by-night” operation or get involved with anyone coming into the area looking to take advantage of the situation so be careful. Feel free to call our office and get a list of contractors that we have done business with, contractors who have a superb track record that we would be able to endorse. It is also going to be a challenge to build back in that it is more expensive to build then where the current market pricing for existing homes is, so you will need to find creative ways that do not negatively impact the pricing structure of what you’re building to get it into budget.
So I am sometimes asked, “What is the value of building back?” That’s a fair question. We do not expect that the majority of individuals will pursue the construction process so those who do need to have the very highest property value if they were to resell it. It will be important to evaluate your area as well. Are there going to be buildings restored around you, or are you going to be located amid a wasteland of foundations? What type of quality will you have around your new construction?
If you choose to sell your lot (or land depending on all the factors mentioned above) will it produce value? I would expect that many areas will have an abundance of lots, and that will in turn drive down the price. You will also want to consider if you are in an HOA whether it will require that you continue to pay a monthly fee. Will they require that you remove foundation and debris? These are all expenses and consideration should be given to those questions. You will also be paying property tax on your vacant land. With as much property as we have lost in the wildfire, there are not going to be a lot of buyers for your land at premium prices.
One little side note: it’s worth thinking about how many of us now have wide open views previously blocked by many beautiful trees. Though we are saddened that we have lost so much beautiful vegetation, nonetheless we now have a knocked down crazy good view. I would recommend that you plant vegetation that will control erosion but that would not block future views. For example, indigenous plants like rhododendron, Mt. Laurel and Hemlock, dogwood , and holly are all plants that don’t grow high or don’t mind being trimmed.
Whatever your decision, we are here to help you through the process. If you are looking for a new home, we can take you to see what’s on the market. If you are looking for a place to rent, we can put you in contact with people who can help you find a place. And if you lost your home in the wildfire and want to build back, feel free to contact us also for a list of cabin builders that we consider highly.
As I’m sure you have heard by now, a fire that swept across parts of Gatlinburg and into Pigeon Forge in the last week of November claimed the lives of at least 14 people and injured almost 200. Our thoughts and prayers go out to all of those who were personally affected by this tragedy, including those who lost loved ones, lost their homes or businesses, or suffered as a result of the fires.
Thank you all for all of the phone calls, emails, and messages we have received in expression of support during this time. We are sad to report that more than 1,100 residential structures were determined to be destroyed by the fire. Of course, when we say residential structures this includes second home and investment cabins and chalets.
The challenge ahead of us is to rebuild, and it is a challenge that city officials in Gatlinburg have stated they are committed to completing.
It is a time like this that we appreciate the preciousness of human beings and realize that our belongings are not the treasures of our life. The real treasures are found in the lives of our friends and families. The outpouring of sacrifice and volunteer spirit is very overwhelming here as firefighters, police officers, restaurants, churches, all step in to save lives, and property. And there is still much work to be done as the clean-up effort continues. Right now, local news outlets are reporting that thousands of volunteer helpers are needed for the work.
Gatlinburg is open for business and as tourists return to the area this week, every effort is being made to get back to the regular routine of serving our guests in the Smokies. So come visit us, shop in our stores, eat in our restaurants, and enjoy the Smokies!
I like what our Gatlinburg mayor was quoted as saying: “We are mountain tough, and we have a strong, strong faith in God.” My friends at Smoky’s Furniture shared if there’s anything that can be learned from the tremendous support that has been triggered by these events is that we are a tight-knit family and we can always count on family to help us through the tough times. Always stay “Smokies Strong.” I couldn’t agree more!
Hi all. We are keeping a close watch as news continues to come out of Gatlinburg about what is happening and what officials are discovering in the aftermath of this week’s terrible fire. We will continue to post new updates as we can, and as we learn things that we know you are wondering about.
From Thursday’s afternoon news conference: City officials have just announced they will allow property owners and renters into Gatlinburg tomorrow between 10 a.m. and 5 p.m. The entry point will be on the East Parkway from Glades Rd.
All roads will be accessible EXCEPT Walker Trail, Wiley Oakley, and Beech Branch.
All of us at Century 21 MVP are so devastated to see our community ravaged this week by a raging fire that quickly swept across 500 acres of the Great Smoky Mountain National Park, into Gatlinburg, and down toward Pigeon Forge.
As many of you have heard by now, a fire that started on Chimney Tops was carried by wind to nearby areas on Monday and quickly spread across the National Park. By the end of the day, it had spread so rapidly that it reached Gatlinburg and spread across to Pigeon Forge. The entire city of Gatlinburg was evacuated, as were homes around Wears Valley.
There are many stories already of answered prayers and miraculous intervention that have prevented loss of life and provided for safety of so many individuals. Currently 75 people have needed medical attention and we have 10 confirmed deaths. That number has been climbing as they were able to assess burned areas that were previously impossible to reach.
It is a time like this that we appreciate the preciousness of human beings and realize that our belongings are not the treasures of our life. The real treasures are found in the lives of our friends and families. The outpouring of sacrifice and volunteer spirit is very overwhelming here as firefighters, police officers, restaurants, churches, all step in to save lives, and property.
Thankfully, the rain we had been praying so long for arrived late Monday evening, but not soon enough to avoid the evacuation of approximately 14,000 people from Gatlinburg. 100 structures in Cobbly Nob burned and at least 300 buildings in Gatlinburg were destroyed by the fire. We also learned Tuesday morning that 100 buildings at West Gate are gone, as well as cabins in Gatlinburg Falls and many cabins and homes on the ridges surrounding Gatlinburg are destroyed. In all, it appears that it is possible that an additional 150 structures were destroyed by fire out in the county. Most of these fires were started by heavy winds blowing down transformers that ignited brush fires that quickly took out homes and cabins. There were also embers that floated through the area up to one mile from where they originated. The National Guard was called in to provide aid and evacuation centers were set up for displaced residents. Volunteer firefighters from multiple fire departments are still out stabilizing the area, clearing power lines. Many have lost power as the strong winds – reaching gusts of almost 90 miles per hour at times have sent down trees that then toppled the power lines.
City officials told local news outlets that half – about five miles of the city of Gatlinburg, which covers a 10 mile area – was affected by the fire, but not the downtown area.
Please keep our communities, our emergency personnel, and all of those directly affected by these fires in your thoughts and prayers during this difficult time.
I will continue to update my blog site as we learn more about the extent of the damage. Ripley’s Aquarium staff have posted on their Facebook page that the building is intact and the animals are safe. Helicopters also dumped water on the fires to help put them out. The eagles and animals at Dollywood have been evacuated as well and are being cared for.