One real estate expert said out-of-state buyers have cooled a bit which is good news for first-time homebuyers.
KNOXVILLE, Tenn — With another interest rate hike and more expected this year we wanted to know how this is affecting the local housing market.
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East Tennessee has been very attractive to out-of-state buyers for some time.
“Gatlinburg, Pigeon Forge was named number five in the world vacation destination and number one in the nation. So add that onto our beautiful lakes and cost of living, lower taxes. It’s just a hotspot and has been a hotspot for years,” realtor Andrea Dubois said.
For the past few years, the housing market has been booming with cash buyers from big cities like LA, Chicago and New York. This has made the housing market even more competitive. Dubois says those buyers are still out there, but they are pulling back a bit right now.
“Some of the New York, New Jersey buyers that I had been working with, they’re holding off now that the interest rates went up. They have said, ‘Let’s be in touch, let me still study and watch the market. We still want to get there but let me see what happens,” Dubois said.
This can be a good thing for a first-time homebuyer.
“If you are taking out a mortgage and buying a house and you’re going up against a cash buyer, that is going to be some pretty stout competition,” Nick Galbraith with Foundation Mortgage said.
Galbraith said cash buyers also want more of a deal since they’re bringing cash to the table and that can help the person applying for a mortgage. He said to give your very best offer and pay attention to your credit score. It matters a lot.
“The number one way to increase credit score quickly is to reduce revolving debt. So revolving debt mainly is credit card debt. So there is a misnomer that if you just pay your credit cards on time, you’re going to have the optimal credit score. That’s actually not the case. You have to pay it on time and you also have to keep your utilization low 25% or less,” Galbraith said.