In a joint press conference with Knoxville Mayor Madeline Rogero and Knox County Mayor Tim Burchett, the Tennessee Housing Development Agency (THDA) announced a new housing program that will offer $15,000 as down payment assistance to anyone wanting to buy a home in specific neighborhoods that were hit the hardest during the downturn and have been recovering more gradually in Knoxville and the rest of Tennessee.
The New Assistance Program
The program, called Hardest Hit Fund Down Payment Assistance or HHF-DPA program, is an attempt to attract home buyers and give a boost to home sales in these targeted neighborhoods, while protecting the families that are already living here from the risk of foreclosure and declining property prices.
“Our goal is to provide a shot in the arm to the neighborhoods and housing markets in Tennessee where the effects of the housing crisis have been most difficult to erase,” said THDA Executive Director Ralph M. Perrey.
The neighborhoods being targeted in Knoxville include North Knoxville, Old North Knoxville, Burlington, Edgewood, Park City, Parkridge, Pleasant Ridge, Lonsdale, West Haven, Norwood and Whittle Springs.
Those seeking home loans to purchase a house in the targeted ZIP codes using the THDA’s “Great Choice Home Loan” program can apply for the HHF-DPA assistance of $15,000 toward the down payment for and closing costs of the property. This amount will be provided in the form of a “forgivable second mortgage loan,” The Knoxville Focus stated in an article on February 12, 2017.
Positive Housing Trends
Well, the good news doesn’t end at just this program. In January, Zillow published its predictions for the 10 “Hottest Housing Markets for 2017. Knoxville made it to the seventh position on this list due to its overall rising home values, low unemployment rates and robust income growth. In fact, according to statistics released by Trulia, the Knoxville housing market saw a 5% increase in median home sales through 2016. In addition, the average price per square foot also increase to $100 during the same period, from the earlier price of $95.
This possibly suggests that the time to buy a home in the city is now! Whether you are looking for a home for yourself and your family or looking for a means to invest in Knoxville, this is a good time to buy also because the median rent price as well as the number of rentals has started to go up after a dip during the October 2016 to January 2017 period.
And that’s not all either. Equities.com published a list of “The Top 10 Fix and Flip Cities in the US” on February 14, 2017. Once again, Knoxville made it to the list, with the site calling the city “the best fix-and-flip market in Tennessee.” Although flipping houses has long been considered among the best ways to get a high ROI, it is also a high risk investment. However, according to Equities.com, investors in Knoxville can hope to make an average gross profit on sell a home of $56,850, which translates into an ROI of a whopping 81.2%. This is because housing prices have risen 13% in the city since 2005.
And the Good News Continues
For all those who are wondering whether this is a good year to make such a large investment, there is more good news. According to “An Economic Report To The Governor Of The State Of Tennessee,” prepared by the Boyd Center for Business and Economic Research, Haslam College of Business and The University of Tennessee in January 2017, Tennessee and the US economies are expected to remain on a “steady footing” through the year.
Although there could be some unpredictable factors, such as the impact of a new administration and Congress, which could influence the growth path, “In general, I think the economy will continue to show improvement,” said Matt Murray, associate director of the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville.
The report went on to say that consumer spending would continue to be the “backbone” of US economic growth, rising 2.8% in 2017, benefiting from the tightening of the labor market as well as increasing wages. In addition, the housing market across the nation is expected to continue to see slow growth, with residential fixed investment expected to rise 2.7% during 2017 and 3.1% in 2018.
Tennessee, in particular, is expected to see more job growth, with its unemployment rate continuing to stay under the 5% mark in both 2017 and 2018.
With so much to look forward to and with government initiatives to boost the housing market, Knoxville definitely looks on the verge of an exciting era.