[00:00:02] Speaker A: Here we go. Welcome to the Smoky Mountain Real Estate Podcast. And I've got Matt here, who's been real estate agent in the market for a very long time and total rock star. So just do a little catch up today. I'd like to hear from Matt and tell us a little bit about yourself and what the market looks like right now.
[00:00:22] Speaker B: Matt Castle, been a listing agent. So I'm sorry. Well, I shouldn't say listing agent. Been an agent here in the Smokies since 2020. Primarily do a lot of listings right here now.
Been doing this, the agent thing for about seven years. I got into the business as a real estate investor way back in 2001.
So that would be what, 24 years now? It's not a long time if you say it fast.
Seen a lot of things, experienced a lot more.
But here in the Smokies, we've had a pretty interesting market the last couple years. We saw the sheer mania that was 2020 to 2021, and then it kind of cooled off in 22 when interest rates spiked. And we've just been nicely, you know, bouncing along for the last couple years. But last three to four months have been an interesting development and we're taking off again.
So I can show you some numbers and do all that kind of fancy statistics stuff.
[00:01:18] Speaker A: Well, sure, yeah, if you've got. I would love to do some screen share if you've got already.
[00:01:22] Speaker B: Cool. So market trends.
This is the Great Smoky Mountains association of Realtors MLS data. Now, this doesn't include every single listing. It's not going to be the end all, be all of accuracy. The important thing is to know where the trend lines are going. So here in the blue, this is just the number of listings. So just like every other market in the United States, we're going to have a lower number when the weather's cold and we're going to have a higher number when it's warm outside. Right. So nothing big. There's just because there's such a discrepancy in the range of this type of thing. So I'm just going to click off and on on a couple of these things, but you can just kind of see it rocking right here. Now, I do know that this number is not accurate for the entire county. We're a little bit over 2,000.
Well, in July we around 2,200 or thereabouts. So this number is well short of what it was. But again, we're looking at trend lines here.
[00:02:21] Speaker A: Right.
[00:02:23] Speaker B: The big thing to kind of focus on, at least in terms of our changing of market is going to be pending versus sold.
We spiked up a little bit in the spring because I think that may be some of the change in administration and confidence levels, stuff like that of buyers who were looking to buy basically because of change in D.C. so saw a little bit of a spike here. But the interesting thing with the number of pending now, we're basically at all time highs for the month of October. And I have a feeling based off of how busy all of us have been at the shop that we may blow through this 200 ceiling cap all time.
[00:03:05] Speaker A: Are you saying this is the busiest October in history in this market?
[00:03:08] Speaker B: No, no, I'm saying this is the busiest time for this year. So okay, this year, this is just January 2025 to October 25th. I can take it back.
[00:03:17] Speaker A: Yeah, let's take it back several years.
[00:03:21] Speaker B: It may take just a little while.
So this is three years. We'll take it back to. We'll take it back to the good old days of 2.53% interest rates.
[00:03:33] Speaker A: All right. So yeah. And I do think things are getting a little warmed up out there. Okay, here we go. 2021. As everybody, this should be.
This should come as no surprise to you, especially if you're listening to this podcast. You should be well versed enough to know that the peak was prime Covid mid to late summer of 21. I'm not surprised there at all. So it looks like September, August, September, October of 21.
[00:04:03] Speaker B: I don't know if zoom's going to capture my screen magnification here, but the big kind of point to sort of focus in on is. Is over here, October 2025.
We're basically approaching some of the highs for the last two to three years.
[00:04:19] Speaker A: Right.
[00:04:19] Speaker B: So we haven't seen pendings in this ballpark since 2023. So I don't know if that's going to continue. I don't have a working crystal ball, don't have a working swami hat. But looking up, you know.
[00:04:31] Speaker A: Yeah, which is good. And we do have a lot of products still on the market. So I don't think we're in any way saying this is some sort of like hurry up before it's too late situation. Not even close to that. Right, correct.
[00:04:42] Speaker B: And I have a sneaking suspicion that will probably fall off just a little bit because the people who are buying strictly for, you know, tax incentive buying looking for their tax break, that big fat juicy tax deduction that their CPAs have been talking about.
[00:04:59] Speaker A: So. Yeah, right. Which is pretty normal this year. I think that's probably what you're seeing in October is that last year, you know, we were sunsetting again and it was, you know, people were trying to sneak it in and it was a big deal. But now this year it's 100%. So it's. Anyway, long story short, for whatever reason it is, it's a better tax situation this year than it was last year for sure. Right.
[00:05:24] Speaker B: And a lot of that is being fueled by mortgage rates.
You did invite me on the podcast, man. I'm the charts guy, I'm the data guy.
[00:05:31] Speaker A: I like it.
[00:05:32] Speaker B: So, you know, here, this is a couple years back, know. So we're, we're not exactly at some of our two to three year lows, but we've got some stuff back here happening in early February, we actually dip below 6% just for a little bit. So we're, we're kind of on track for that kind of a thing here. And I think the, the fed funds rate is going to be here. So in black you've got the fed funds rate. So this goes back all the way to the good old days of COVID Right. So it's when we had zero interest policy and you can see, you know, mortgage rates were sort of following that same very trend line. And now that we're seeing fed funds rate starting to decrease, we'll probably see our 30 year fix, 15 year fix, all that kind of stuff follow suit.
So a lot of positives working in our favor.
[00:06:24] Speaker A: Yeah, I mean, rate drop a couple of weeks ago, obviously, and then the rates, the mortgage interest rates went up a little bit. That's to be expected.
I think I've again, I'm going to get out my crystal ball. I think we are in a situation now where we can kind of hope.
I think it's a, I think it's a hope that things are going to sort of stay the same for a minute.
To me, the biggest problem with, with the market in general over the past, you know, four years is that it's like just all over the place. I mean, screaming high down to terrible lows of no, nobody buying anything at all. And interest rates, same thing. Interest rates were just absolutely in the gutter and then went to the highest they'd been in, you know, a number of years overnight.
So what we need is some stability. Do you agree?
[00:07:13] Speaker B: I do. And I just don't think we're going to get it. I do have a little bit of a prediction for 2026 if you want me to put on my prognostication Yes, I do.
President Trump has made no bones and made no shy comments about his replacement of Fed Chairman Powell.
His last day on the job will be May 15, 2026.
I am almost certain that he will put somebody in that position that will go along with his economic agenda. I think the Fed funds rate being where it is right now, it's going to be somewhere over here by mid next year. I'm not saying that the 10 year or the 10 year treasury rate or anything else is going to follow along suit because they are independent.
But the key point is that when one travels one direction, the other usually travels the other direction.
It would be a logical assumption to say that if Fed funds rates are falling next year, which they certainly seem like they're going to be, interest rates will be falling along with it. Plus you have the continuation of.
[00:08:21] Speaker A: You.
[00:08:22] Speaker B: Know, the big beautiful tax bill, bonus depreciation coming back into play. Everybody's going to be on that train again. So if rates are falling, everybody's going to be looking to take, take advantage of that.
I would almost say it, the Federal Reserve's interest rate or monetary policy is going to be very similar to what it was in Covid. It's just not going to be as extreme. We're never going to see this kind of a low thing right here. But my presumption would be President Trump wants to bring it back to somewhat in that Covid era type of easy monetary policy and that's going to be a very virtuous type of circle for the real estate market and anybody else who owns assets. So whether it be bitcoin, stocks, real estate, I think we might be in for a little bit of a juiced economy.
[00:09:16] Speaker A: Yes, I would prefer that it doesn't go that direction. But you are very potentially right about that, especially with the, the Fed chair change and I think he wants out. I mean, he's been beat to death for the past couple years and I wouldn't want to be him at all and.
[00:09:30] Speaker B: Nope.
[00:09:32] Speaker A: But, but at the same time, what's he going to do? Bow down and quit? No, we're going to wait until we're done and then we're going to go live the rest of our life and. Bingo.
So are you predicting another rate drop?
Are you saying we might have a rate drop in the near future?
[00:09:47] Speaker B: I think we may have one in December. I'm not certain. It just depends if the inflation monster is going to be tamed because the government shut down. I think there should be a vote on that sometime today. I haven't watched the news in the last little bit.
I do think there will be something of a rate drop just because of lower ADP numbers and all that kind of good stuff. So I think there's a very good potential because people are concerned about the economy weakening job growth, not happening, stuff like that.
[00:10:21] Speaker A: Yeah, it's too early to tell. There's the, you know, the government shutdown is as the, the time of this recording coming to an end. But I mean we still have all these airline problems which seem to be go. Going to be for, you know, going on for a while here.
And we don't have much data right now, so.
[00:10:37] Speaker B: And that works well for lower rates type of environment. So if you, if you want lower rates, you're going to have the data points to help justify that.
[00:10:48] Speaker A: Okay, so are you seeing people more interested in real estate in general in, in the Smoky Mountain market or is the phone ringing a little bit more?
[00:10:57] Speaker B: People are so interested that I had to turn buyer leads off and you know what a big deal that is at the short term shop. Right. So we had to hire two new agents in September because of that. Right.
So my phone is ringing off the hook.
I work, you know, anywhere from 12 hours a day, seven to seven, but I've had to dip into that 7pm to 10pm kind of time frame too. So I have a lot of listings. I get a lot of phone calls from people who just want to pick my brain.
But I also have a lot of legit buyers who are coming in and wanting to do stuff from those listings too. So I mean, it's just a hard as you can go really.
[00:11:32] Speaker A: But is it a lot of tire kicking? More, more tire kicking than it would have been say, you know, in the COVID era.
[00:11:38] Speaker B: It depends on how you want me to spin it, but I'm just going to say it my way because I don't know any other way. There's a lot of tire kickers, but there's also a lot of very, very serious buyers. Right. So there's a lot of folks who come into this from a multi family background or commercial real estate background and they're wanting to, you know, try to look at P. Ls, look at past history, all that kind of stuff and take the metrics that they know and apply it to this. I'm not saying that's a bad thing, but you know, we've discussed many, many times and if you look at our YouTube channel, you'll see you guys talk about it all the time. You know, commercial, real Estate or long term is different than short term so you can't necessarily use the same metrics. But I talk to a lot of those folks and it takes anywhere from a month to a year to educate them in the process or make them comfortable might be a better way of saying it. And then once they do, they're in. I mean I've been talking to some folks for six months and finally they're right on the fence about making a purchase or not A lot of that is tax incentive type of anxiety as well. But they're, they're getting ready to hit the buy button.
[00:12:42] Speaker A: Yeah. And I, I'm in apartments as well. I own several apartment buildings and the, this is easier to me than, than the apartments. Even though the apartments are more cut and dry, there's not as many variables involved because you get a, you know, you gotta a rent roll with the P and L and you know, you can see kind of almost facts really about what's going on with that building. Can't do that in short term. But man, there's a lot going on there in these big multi unit buildings with expenses. And where did this bill go? And especially a lot of times the operators are maybe not that savvy. So they're giving you a big pile of junk that you can't even read. You know, it's like, and every building you look at, it's completely different spreadsheets. And especially the owner operators, oh my God. You know, if they're, they're owner operator in a commercial asset, it's, it's never any, I mean I'm not saying that they're not doing a good job.
Sometimes they're not. But what I am saying is, is that like every single time I read one of those I'm like man, whose brain put this together? This does not work in my brain. I got to sit there and like, it's almost like you're learning how to read these numbers from the perspective of that person who put them together. When in short term, yeah, it's a little bit complicated and there's more variables but if, if you can figure out 365 nights a year, different, basically 365 different prices of which only you know, 280 or so are going to get actually booked then you know, it's, it's fairly cut and dry. But when you, when you're first getting into short term, it's, especially if you're coming from that commercial real estate world, it's, it's wow. It's like man, because of the fact, the fact situation. There's, there's a whole lot of problems in short term that need to be solved that are variable and this expense is a variable and I don't ever have to do that expense again, you know, which, you do that in commercial real estate as well, but it's more like Capex as opposed to, you know, furniture and all that kind of stuff. And cleaners, you know, you don't have any cleaners in commercial real estate and the cleaner is sometimes getting called more often than not.
Or maybe we had a situation where we needed extra deep cleans and all that stuff and.
But again, as I always say, it's just a damn house, right? It really is. It's just a damn house. It's not nearly as complicated as a 50 unit apartment building with 50 leases and lawyers and evictions and, you know, all kinds of stuff like that. So yeah, it's, it's. But it's very difficult to get that through somebody's skull when they're new.
It's just, dude, it's just a damn house, you know? Okay. You kind of got to let them go down their own path and find their own journey there.
[00:15:37] Speaker B: Bingo. I don't pressure anybody when it comes to the data and the analysis and projections and all that kind of stuff. You, you work at your own schedule, get your own stuff. I'm not a property manager. I don't know that stuff. Officially I'm not going to give you projections myself, but the thing, it is, you hit on it perfectly. And you guys have said it for years this way, don't overthink it. It's just heads and beds at a certain point and you're seeing who can build a better mousetrap. And by mousetrap, I mean a short term rental cabin that maybe one has better pictures than the other one. That's why it does 20,000 more a year than something else that doesn't.
[00:16:09] Speaker A: Right?
[00:16:10] Speaker B: So ask yourself, do you want to stay in this cabin yourself? And if the answer is no, we got a problem.
[00:16:16] Speaker A: Hmm.
And I've noticed a huge uptick.
I'll be honest with you. I, I missed a deep clean.
We, we try to schedule in the, in the Smokies. 3, 3 deep cleans a year and we missed one this year. I don't even know how it happened. We were just too busy and, you know, just forgot about it. And then all of a sudden I got a few complaints and got a couple of bad reviews and we went in deep, cleaned, got everything back up to snuff. And it was as simple as that. Like, all of a sudden, everybody's in love again, you know, man, this is the nicest house I've ever stayed in in the Smokies. This is the cabin I've ever stayed in in the Smokies. And it's. It's like, whoops, sorry about that. I totally screwed that up for those people before you, you know, so. And we do spreadsheet that. We spreadsheet it. You know, I like to do February, May and September because those are slow seasons and they're as far apart as you can get as far as low seasons are concerned.
And that's a good idea for you if you're, you know, trying to. Trying to bring in as much in income as possible. First of all, keep the damn house clean and get some good pictures. And, you know, really from there, it can be as simple as that. Talk to me about January and February. You know, obviously there's a lot of benefits. Right now people are trying to do the whole tax thing, which you guys can look that up. We're not here to talk about CPA and tax stuff right now, but the material participation is what you're going to want to Google as far as that's concerned with the overnight rentals or also just real estate professional status, which, of course, Matt and myself are both real estate professionals, and we don't.
We don't have W2, so we don't material participate. But anyway, what's January, February look like? It's typically quite a bit slower. Are you expecting it similar to this year, or.
[00:18:00] Speaker B: I do. And the joke that I always tell is everybody gets. Everybody parties up for Thanksgiving. They eat a bunch, hang out with family, that kind of stuff. Then they spend all their money at Christmas and they party themselves out at New Year's, and after that, they're broke, they're overweight, they got New Year's resolutions to make. They go back to the gym, they get back to work.
[00:18:19] Speaker A: Right?
[00:18:20] Speaker B: Plus February, January. February is usually our coldest two months. So a lot of people aren't going to be coming here anyway. So if you've got a rehab project, you got updates, do you got deep cleans to make? That is the perfect time to get those done.
[00:18:34] Speaker A: Now, certain properties.
[00:18:36] Speaker B: Certain properties will rent up quite a bit this time of year. I'm sorry, the January to February time of year, just based off of weekend visitors. Right. It's still a weekend heavy type of a season, especially for the Smokies, Just because I think we're something like a 12 hour drive from anywhere from 50% to 67% of the United States population. If you drop an imaginary line that goes from say Brownsville, Texas all the way up to North Dakota, approximately 75 to 80% of the United States population lives east of that imaginary line. So we are blessed with a central geography for here in the United States we'll still have a ton of visitors on the weekends. It just depends on, you know, if your cabin is nice enough for people to want to come in the middle of February.
[00:19:29] Speaker A: Yeah, and see, I want to, I want to throw this at folks.
You, it would behoove you to get ahead if, let's say you are, you got a big W2 and you're trying to buy real estate for call seg purposes, do it early. Okay. I got several reasons why, but I also want to compare this person to the person who pushes their tax return back, right? Like delays it until later, extend if you will. So that's not me. I, I mean I'm filing taxes 1st of April every year. I mean I'm done. I don't want to deal with it. I'm very proactive and I'm similar with my, with my purchasing of the real estate. Right. And here's another thing. January and February, your competition is very slim. Sellers are over it. It's dead. They're not even getting any rental. Their, their properties probably been sitting since before the new, since before the holidays and for whatever reason they got overlooked and they probably had a couple offers in November, December and now it's ripe for the picking. January and February, let's get that 26 tax situation going ahead of time so we're not losing our minds at the end of the year when the holidays and the kids and everything else, I don't know to me, why, why are we doing what everybody else is doing? I get it, you're trying to squeeze it in before the end of the year, but man, January and February, that's, that's perfect time to buy, buy a house and then you can get it up and running before go day March 15, when, when the, when the travelers come back and, and get it in service and get it functioning.
[00:21:03] Speaker B: And if you're a seller, the cold weather months actually can work in your favor just because of some of those charts that I showed earlier where it shows inventory is at its all time lows or at least its annual lows during that January, February month. A lot of realtors, they will write their listing agreements to expire December 31st. At the end of the year. So it'll expire 1159, December 31st of 2025. You're going to be one of very. Maybe inventory may drop by a third, something like that from the peak summer months. So if you're trying to sell lower inventory periods is going to work in your favor.
[00:21:42] Speaker A: It's an interesting point. So that means I need to be looking at product prior to December 31, because there's a decent chance that it will no longer be on the Internet as of January 1st. I never thought of it that way. That's. So now we need to plan in advance. To plan in advance.
[00:22:02] Speaker B: I'm giving out all my secrets here. But yeah, but if you're a seller, some of the best times to list is going counter or against the grain, right? So if you're trying to get your property sold, sometimes the best time to do it is when there's much fewer type of listings out there, right. So a lot of buyers suffer from what I call click fatigue.
They are basically sick and tired of just clicking on this listing, that listing, this. And so once I click on 20, 25 cabins, man, it's, it's time to check the ball game score. It's time to check where my Facebook stock is located. Right. So I'm looking for a little distraction at that point. My buyers do that all the time. Like, hey, Matt, we just looked at a hundred properties over the weekend. We saw maybe three or four we liked. What do you like? So I send out an active buyer list of once or twice a month I'll send out properties that I like just to try to, you know, get, keep them engaged or sort through all of the stuff, right?
[00:22:57] Speaker A: Yeah, yeah. And again, Matt, there's no secrets here. You know, you said you're giving away your secret. There's no secrets. It's hard work. Everything we're doing here, everything even we're talking about for you as the listener and the buyer and the seller, this is hard work.
Real estate has done such amazing things for my life. But I am not going to sit here and tell you that I haven't busted my ass harder than I ever did before I got into real estate. 100%, no secrets. You're just a hard working guy and it's a wonderful thing.
All right, what else, what else do you need to know through the end of the year, as far as Smoky.
[00:23:27] Speaker B: Mountain real estate, I believe we've gotten most of it covered.
I don't have any other news updates, all that kind of good stuff. So I think we're good there.
[00:23:38] Speaker A: Okay.
[00:23:39] Speaker B: I did think he wanted to talk about differences on what some why, maybe why current listings are doing well versus some listings that aren't. Stuff like that.
[00:23:49] Speaker A: Yes, if. Yeah, especially if you have an example. That'd be wonderful.
[00:23:52] Speaker B: All right, sure.
So this is a listing that I posted a couple of days ago, just went pending. The reason why this thing as a listing to list on the MLS to sell. The number one reason is just because the gross rental income is killing it.
[00:24:06] Speaker A: Right.
[00:24:07] Speaker B: Let me zoom back out here just in case.
This is a cabin that has done phenomenally well for the last two years. It's grossed 100k plus. It's a two bedroom, three level. It's got three decks, got an amazing view on the outside.
And when we're talking about photos, this, this is one of Mike Sutton's best photos, in my opinion. But it's this right here that sells it. Right. So just all of this, I think you call these boom booms, or at least you used to. Right.
[00:24:37] Speaker A: So we're hitting them in the description. You're talking hero picks. Yeah.
[00:24:41] Speaker B: Right. So we're hitting them with just their top five pictures in the listing. But you know, Mike Sutton's work did a lot of this, the seller's great work, keeping a 4.9 plus sort of thing.
But here, as far as selling your cabin, the number one thing is going to be what the gross rental income is. Because a lot of those people that I talked about before coming from commercial real estate or multifamily, they're looking for a proven winner so they don't have to rely on projections. Right.
[00:25:15] Speaker A: See me, I don't want to see that. I'd rather see the house that's not doing well because there's probably less attention.
[00:25:21] Speaker B: Well, you're, you're getting ready to get an example of that. And I was going to go into this other one here. So this is another one that doesn't necessarily have as nice photos, but this one's also pending and it went pending within just a couple days.
[00:25:33] Speaker A: Wait a minute, wait a minute. What in the world is going on in that pool? Those are Santa Clauses.
[00:25:39] Speaker B: Well, I mean, this is coming from the guy who's got like nine Christmas trees.
[00:25:42] Speaker A: I do love Christmas. I would assume those are fat heads or whatever. Right. They come off.
[00:25:47] Speaker B: Not sure. This is one of our company listings, I think.
[00:25:50] Speaker A: Wow.
[00:25:51] Speaker B: Chris and Leo. But yeah, they, they've themed out their pool quite a bit. So these are these amazing things. And I purposely put this listing in My examples here, just because great photos, great view, great interior design are always going to work. But what's the first rule of real estate, man? Location, location, location.
I wouldn't suggest walking to the parkway just because the road's a little bit sketch, but you can literally just walk out this back door right into Ryan Steakhouse Dollywood.
What is this place? Dollywood Stampede is right over here. So you're right on the parkway. Even though do not know, don't know.
[00:26:31] Speaker A: I can find out.
[00:26:32] Speaker B: Chris Looper is the guy. He's one of our agents. He's got the listing, so he might be able to tell you. But this is right downtown Pigeon Forge. Right. So location's always important.
Great views are important. Great interior design is important. In indoor pool is going to work just because even if people aren't going to be using the pool, this is going to be one of the amenities that you can show people.
[00:26:55] Speaker A: Right.
[00:26:55] Speaker B: So this kind of stuff really, really sells. It also cranks up income for you.
So to get back to your point, I've got several listings that look like this, but they don't have this amazing income. Right. And some of my listings that have same view, maybe even a little bit better of a view, they just don't have the pictures and the income to show it. I think that's where a lot of buyers are mistakenly going wrong because they think that just because this cabin makes this amount of money, that's the one they want to throw their money at.
However, if you take the same exact cabin three or four doors down, same floor plans, same pretty much everything, they will think of it as chopped liver or something.
[00:27:36] Speaker A: Right.
[00:27:36] Speaker B: They're just not going to look at it as serious.
[00:27:39] Speaker A: Yeah.
Give me the slightly dumpy one that nobody's looking at all day long. That's just me. But I understand if you're new. And I mean, first of all, turnkey is, is. It's probably better when you're new.
You know, it's a lot of work to do rehabs. And if you've never even done like rehab in the bathroom in the house you live in before, man, you know, rental property might not be the place to start unless you're, you know, it depends on who you are. Like, if you're shot out of a cannon and ready to go, you know, move into it for three weeks and oversee it and all that kind of stuff. Get your hands dirty. Absolutely. You know, but again, that's the beauty of this. There's just.
There's. There's a shoe. Would you that's your quote, right? A shoe for every foot. Is that. Did I get that from you?
[00:28:20] Speaker B: I don't think so. Okay, that sounds like. That sounds something catchy, like I would say, but, you know.
[00:28:26] Speaker A: Yeah.
[00:28:26] Speaker B: I'm Southern. I love my sayings.
[00:28:28] Speaker A: Yeah.
What else? We good? Yeah. More good. Okay. We're good.
I love it. Smoky Mountain Real Estate podcast. I'm trying to campaign to change the name. Right now she's got it Buy how to Buy it in Airbnb in the Smokies. So we may have. I don't know. Avery's in charge. She's the boss, you know, but.
[00:28:47] Speaker B: That's Right.
[00:28:49] Speaker A: But
[email protected] and that's it. Don't overthink it.
