7#Va`Ua^ ^ ^ ^ ^ ^.^^^^ ^^^_x^` `8`c*`^ `c`T`c`c`-`c`c`c`c`c`c??AFFORDABLE HOUSING?? htk/dektk by Hillari Dowdle Its all blue skies and sunshine at Whittington Creekthe perfect afternoon for an open house. Its bright, its temperate, its sunny, and the cars are whipping by the show tent in a steady stream, heading up into the rolling hills off Northshore Drive to look at the 300-plus acres of treeless fields that Testerman Realty promises will be the home to one of Knoxville most exclusive, restrictive neighborhoods. Greg Freeman, the Testerman representative whos manning the tent alone today, its ticking them off. Ive seen Infinities, Mercedes, Jags, BMWs, Audis, and Ive seen tons and tons of Lexuses, he says, though minivans and Toyota Camrys have been equally prevalent. Its amazing. On opening day, Bryan Testerman was joking around with us all and he said, Hellfire! I havent seen a car in here yet thats worth under $30,000! Freeman hopes to buy his own Lexus to replace the gray Chevy Caprice hes now wheeling around in. And if he sells enough lots at Whittington Creek, chances are hell be able to afford it. Testerman will be selling off 110 one-third to one-half acre lots to Knoxvilles home buying market at $60,000 to $80,000 apiece, and thats only in the first of seven phases of the development, a sub-subdivision called Hemingway Grove. All told, Whittington Creek will add nearly 500 homes to Knoxvilles already considerable upscale real-estate market, including a development of maintenance free communities (read: condos). And every last one of them will cost upwards of $250,000, most more than $300,000. So far, so good. Whittington Creek, launched only four weeks ago, has already sold about 27 lots. Whittington Creek will be only one of many like neighborhoods that are part of the upscale housing boom taking place in the Southwest quadrant of Knox County from Lyons Bend to Farragut, hemmed in on both sides by I-40 and Northshore Drive. Hundreds upon hundreds of $300,000-plus houses have been built in this area over the past 10 years in neighborhoods with names like Kensington, St. Ives, River Sound, Andover Place, Smithfield, Westmoreland (Heights, Hills, and Estates), Brixworth, Duncan's Glen, and Altamira. In this part of town, the average household income is roughly double that of the county as a whole. And in neighborhoods like these, the houses are huge, the cars are deluxe, the grass is green, the trees are saplings, the neighbors are (mostly) white, the schools are good, and the shopping is fantastic. Ann Goodge, who is the administrator of Little Creek Sanitarium, a nursing home on a small island of 45 acres surrounded by Whittington Creek, has lived on that land most of her life. Until two years ago, 350 acres of land there were owned by the Little Creek Academy, a group of Seventh Day Adventists whotroubled by the encroaching development all around themdecided to sell the bulk of the property and move to more rural Crossville. It appears to be a nice development, she says. But it make me sad to see all the farmland being eaten away. Everything I grew up with and was surrounded by is gone. But you have to face the facts. Thats the way it is. Still, like most of Knoxville, Goodge is baffled by the extent of the development. Im amazed to see these houses around us, and to see that a lot of people in them are young people with children, she says. Its a mystery to meto everybody. Who are these people? ******* Behind his beautiful traditional American colonial home in Westmoreland Estates off Westland Drive at Morrill Road, past the volleyball court and the custom-built cedar jungle gym, around the fenced-in pool and the half-court basketball court, over the perfectly manicured lawn and across the footbridge spanning the small creek, Bruce B. is mucking around in the woods. With one hand, hes clutching a large plat map. With the other, hes gesturing to his companion and next-door-neighbor Anthony P. Theyd like to buy this land (though its on a flood plain) or persuade the current owner to let them use it, and theyre studying the trees with obvious interest. Theyre in need of a private soccer field. Bruce, the president of a local industrial/commercial construction company, is an old-timer in the neighborhood having moved in nine years ago. Anthony, an architect for Pilot Oil, is a recent transplant from New Orleans. These guys, both 37, are fond of their quiet and beautiful neighborhood, citing its convenient location near schools, shopping, church, and everything else. Its a great place, they say, to raise their five-year-olds, who are in kindergarten together (and who are swinging on the jungle gym together like little monkeys). They know what they do, they know what their neighbors dotheyre mostly doctors, attorneys, and bankersbut still, they wonder about how Knoxville can support so many neighborhoods like theirs. I think its a supply and demand thing, says Anthony. I think the builders are driving each other to build bigger and bigger houses. The developers are building these neighborhoods, and somehow, people are buying in them. Bruce says he thinks theres a good mix of business and industry in Knoxville, and that our community is growing steadily. But he does not discount the appeal of our environs. I think a lot of people who are from Knoxville or have lived here really like it here, he says. Its pretty, its safe, and its centralized. If they can find a way to live here, they will. Plus, Bruce adds, maybe weve had a little more wealth here than people think. ******* A stones throw from Whittington Creek, down Ebenezer Road on Westland, is another upscale community development, this one perhaps even grander in scale: Gettysvue Polo, Golf, and Country Club. Also on roughly 300 acres of land, Gettysvue will offer the community 300 more houses that will cost $300,000 to $1 million. Along with the namesake golf course (the front nine will open this month with a grand kickoff hosted by golf great Tom Weiskopf), indoor polo facilities, and private country club, Gettysvue will feature some of the strictest restrictions in town. Homes in the subdivision will be designed by (or approved by) one Stephen Fuller, architect-darling to the nouveau riche whose houses are mammoth stucco, brick and stack-stone creations featuring lots of intricate windows, steeply pitched roofs, and architectural interest like archways and turrets. The style is European traditional, and its a far cry from the four-window boxes prevalent in Knoxville architecture. The effect is the pretentious quaintness of a faux English manor house. Beyond the lush Zoysia fairways, the residential area of Gettysvue is right now little more than fields of mud and piles of limestone. Its a little tough to imagine the grandeur that is to follow. Still, Gettysvue is situated on a high ridge top that offers stunning views of the Smoky and Cumberland mountains, and offers such topographical interest as ponds, streams, woods and natural outcroppings of rock. It is hard to deny the raw beauty of the land. And land, after all, is what Gettysvue is selling. Since acquiring the land in late 1994, Gettysvue has sold more than 100 lots, mostly a third to half of an acre in size, at prices from $50,000 to $170,000. And though theyve exceeded their own expectations, their success does not surprise Ron Watkins one bit. Before we started, we conducted a major feasibility study, says Watkins, who has developed Gettysvue along with Robert Stooksbury and Kentuckian J. D. Cooper. And what we found was that there was a pent-up demand for this kind of development in Knoxville that was second to none. There was pent-up demand for golf course property. There was a pent-up demand for a quality private country club. And there was a pent-up demand for the level of housing that Gettysvue will offer. There is a lot more money in Knoxville than people think, Watkins concludes. The proof is in the reality that the Knoxville community has responded to us in such an overwhelmingly positive way. Pent-up demand is a term embraced by real estate people, developers, and builders throughout the market, and bandied about as the impetus for the movement toward more upscale housing in West Knoxville, which begandepending on whom you askbetween five and 10 years ago. Of our initial buyers, says Sharon Bailey, a long-time agent with Realty Executives whos now working with Gettysvue, about 75 percent have come from within a five-mile radius. These people are from Knoxville, and theyre professional peoplebusinessmen, attorneys, and a lot of physicians. And a lot of these people are on their second or third homeswere not a starter home community by any means. Its funny about the high-end market, though, she concludes. I sell a lot of it myself, and I often wonder where these people are coming from and why theyve chosen to live in Knoxville. But there seems to be an endless supply. ******* Sam Bs visit to Dr. M. on this sunny Sunday afternoon is more than just a social callSam is here to collect his grass seeder, which, from the look of Dr. Ms lush green yard, has done its job. Dr. M, an oncologist, is a recent transplant from Florida (he moved here in June), and Sam has taken him under his wing. Sam, who sells medical equipment, loves this neighborhoodKensingtonhaving moved here a couple of years ago from another Knoxville subdivision called Hannah Place. He says that the people who live here are amazingly young, estimating that the average age is 42 (and noting that he, at 43, is tugging that average up). Sam lives in the older section, and has a bigger yard than the newer houses, something that he considers a big asset. I moved here for the children, he says. I wanted to be able to get out in the yard and play ball with my kids. I wanted a good yard for children, and I got it. Sam thinks Whittington Creek next door will be an asset to the community. But hes also boggled by all the upscale construction that is going on around him. Give me a break! he says. Who are these people? Then Sam tries to answer his own question. My lender told me that most of the families who buy houses like this are two-income families, where the husband and wife both work, he says. I think people have egos, he says. They dont want a used home. They want to build their own new home. Its a monument to themselves. ******* Pose the questions Who are these people? and What do they do? and 9 times out of 10 youll get one of two answers: I dont know, or Thats a good question. And though many people are capitalizing on the upscale market here in town, nobody has done any studies of just who the upscale market really is. Real estate agents will tell you to ask retailers, retailers will tell you to ask home builders, home builders will tell you to ask the Chamber of Commerce, and the Chamber of Commerce will tell you to ask realty people. And so it goes. If I knew, I would tell you, says Mike Dontje, president of the Knoxville Home builders Association. I can only make the assumption that there are a number of move-up buyers, a steady flow of people coming into the region, and a slight increase in our retirement market. Sometimes things happen and we dont really know why. We just have to accept it and enjoy that it is happening. To make their decisions, home builders in Knox County depend on records of real estate transactions and on The Market Edge, a newsletter published by Dale Akins that tracks building permits and new subdivision development in the area. But even Akins, a construction loan manager for NationsBank, cant put his finger on it. Whos buying $300,000 houses? he asks. Well somebody who makes $100,000. Who makes $100,000? The people buying $300,000 houses. It seems pointless to even discuss whos buying these housesits people with money, obviously. This chicken-and-egg line of reasoning is typical. Nonetheless, there are certain assumptions one can make about this particular market. A good rule of thumb, says Akins. is that you can generally afford to buy three times your annual salary. Mortgage lenders back Akins up. If youre buying a $300,000 house, chances are that its not your first home, and that youll be bringing with you a fair amount of equity, says Cathy Neubert, senior vice president of residential lending at First Knoxville bank. Typically, wed be financing about 80 percentor $240,000. If we did that on a 30-year, fixed rate loan at 8 percent, then the monthly house payment would be about $1996. The minimum income level to support that would be $85,500. Its obviously not that unusual for people to have these incomes, because the sales are taking place. Unusual or not, it takes a certain type of person to bring home that kind of bacon. It would be common to find that the person would be either self-employed or would be in some kind of profit-sharing program with his employers, Neubert says. I have found that fixed salaries do not reach the same level as incentive-based compensations can reach. As far as whos making that kind of money, its hard to say. The only certainty is that the medical industry figures heavily in Knoxvilles wealth, hardly surprising given our growing regional medical communityKnox County is home to 1,189 physicians. I could safely say that half of the upper, upper market homes are sold to physicians, says Ron Dew, an agent with ReMax who has made his reputation selling $500,000-plus homes in upper, upper bracket subdivisions like River Sound. Metro Pulse pored over records of over 400 residential real estate transactions over $300,000 since 1990. And what we found, though its hardly definitive, was this: many physicians (who are by far the single most prevalent profession trading in this kind of real estate), health-care executives, TVA professionals, attorneys, marketing consultants, ex-Whittle publishers, venture capitalists, real estate moguls (surprise), securities brokers, high-ranking UT employees, bank officials, and various president and vice-president level executives from a wide range of companies. Though its difficult to quantify, it appears that many of these people are recent transplants to the Knoxville area who have either been transferred here, or have come here to start their own small businesses or to retire. According to the 1990 census, of Knox County's 133,584 households, 9,847 had incomes of over $75,000. No doubtwith the influx of fresh, monied bloodthat number has already increased, and incomes have continued to rise. And from the looks of things they will keep rising. ******* As the sun sets over his Wentworth estate in Farragut, Harold W. ambles around his stark half-acre lot, taking stock of his new home. Harold was an East Tennessee businessman for years, and came out of retirement recently (hes cagey about his age) to start his own kitchen and mantle design company. This is maybe his third or fourth house in Farraguthis last was in Andover Place, across Kingston Pike and behind Fox Den. Thats what we do, he says, cryptically. We build these houses, we move into them, then we sell them. Wentworthlike so many subdivisions of its ilkis plopped down in the middle of a former farm in a field that looks like its crop has been rotated from hay to luxury homes. Harold doesnt know any of his neighbors, but he knows that theyre mostly young. You look at all these young people who live in here, and you wonder where theyre coming from and how they can afford this, he says with a sigh. I think it must be quite a stretch for most of them. Of course, its not a stretch for Harold. I built at the low end in here, he says. My house cost $325,000. But thats no stretch for me. If it were, I wouldnt have bought it. ******* Though definitive answers are hard to come by, there are some generalizations we can make about why us, why here, and why now. The first is that interest rates are spurring more people into the market. During the late 70s and early 80s, interest rates were so high that it was nearly impossible to buy a home, says Douglas Sweitzer, associate publisher of Knoxvilles Home Market magazine. "Now, with interest rates at 8 percent, not only can people afford to buy a home, but people who already have homes that they bought in the 70s and 80s are cashing in on that equity, and with the lower interest rates, theyre buying new homes. Cathy Neubert sees interest rates as a major factor in upper-end real estate. "If an owner were trying to finance $240,000 for a house in 1990 when the interest rates were at 11 percent," she says, revisiting the scenario she painted earlier, "then the total house payment would have come out to be $2,521 instead of $1,996. The annual income needed to support that would have been $108,000. That means a family would have had to make $23,000 more a year for the same loan at a higher interest rate." When interest rates are this low," says Akins, "the object of the game is to buy as much house as you can, so people generally do. Not only are people buying new homes, they are thinking about them more in terms of investment. Jerry Whitehead of Realty Executives says that houses are one of the few things you can put your money into now and get a tax break on it. And even if you dont get a huge return, at least you can live in it and enjoy it. Whittington Creek is a good example, says Sweitzer. Its a safe investment because its like a blue-chip stock. You can depend on the value of the house not being interrupted by somebody coming in and building a strip club next to you. Theres strength in numbers when you get together people who care about their community. Some real estate agents will talk about a slowdown in the upper-end market. In fact, real estate sales in general are slightly off from last year (3,436 homes were sold in the first eight months of this year; last year, for the same time period, 4,426 were sold). But most see nothing to worry about. Knoxville has always been insulated from extreme highs or lows in the real estate market, says Jim Ford, president of the Knoxville Association of Realtors. And part of that is the diversity of our economy. Were not dependent on one major employer, so were not going to see a situation where suddenly thousands of jobs are cut, and you cant give houses away. Another factor to consider is that although $300,000 may seem like a lot of money for a house in Knoxville, its a very attractive price to people relocating to this area from, say, California or from the Northeast. In factespecially in conjunction with our relatively low property taxes and nonexistent income taxits a major draw. I think were seeing quite an influx of people moving from other markets," says Don Canter of Realty Executives, who consistently leads Knoxvilles market in sales and has sold six houses worth over $500,000 in this year alone. "Probably 70 percent of my sales are to people moving into the market. They want the four seasons, they want the mountains and the friendly people. Were even seeing people moving here without jobs. ******* "Its more than just an O.K. opera, Mark H. is explaining. The opera is really great! The quality is just about as wonderful as you could possibly hope for in a community of this size. This is important to Mark, a big fan of the arts who moved here recently from Los Angeles with his wife, Cathywho holds a masters in celloand their two children: a son, nine, and a daughter, 13. We had a great, innovative opera in L.A., and I didnt know what to expect here, he says. But I didnt walk away in the least bit disappointed. Mark, 42, is a high-level corporate headhunter who moved to Knoxville to escape the rapid deterioration of the quality of life in L.A. It is absolutely true that I could live anywhere I wanted, he says. I do a lot of my business on the phone and fax. My clients dont care where I am. I work on a national and international level, and Im geographically independent. We decided to leave L.A., but we werent really sure where to go, he says. I had done some work with a company here, and we decided to come down and look it over. And we just loved it. We went to the symphony, we tried out some restaurants, we looked at the schools. And then we looked at each other and said, Lets do it. Mark and Cathy looked at houses all over town, hoping to find a place in Sequoyah Hills. When they didnt, they settled for a new neighborhood, Duncans Glen off of Lyons Bend, where theyre surrounded by neighbors of like age and educational/socio-economic background. One of our neighbors is a developer, Mark says, and his wife is an attorney. We have a man who is a sales executive with a major freight company who was transferred here from Nashville. My next door neighbor is a doctor at Lakeshore. And down the street, there is a guy who owns his own insurance company. It is a bonus to Mark that his investment appears to be sound. I came here and saw all these swaths of $300,000-plus houses, and I thought, This is a happening placeIm going to make a good investment here. We spent over $300,000, and thats a lot of money, Mark says. But in L.A., I would have had to pay over $1,000,000 to get this quality, this big a house, this big a lot, and this nice a neighborhood. And I still would have been paying thousands of dollars per child tuition. Plus theres no state income tax, my insurance is half of what it was, and instead of paying $500 a car to register my cars, Im paying $31. No wonder then, that Mark H. is able to say, Were really pleased with the move. Were very happy here. --end-- ud!t Kelly storyTEXTMSWD! !t Laura storyWDBNMSWD!v !t Laura storyWDBNMSWD!v z>B$H$I))6`6k::?o?p@@KKVTVUV`VaVd @@#$6-A sMp  !#W$?$@$H$I%&'()i)))), -./034z6`8::::<>y?-?.?6?7ACD2ErFGIVJLRLSL[L\ !! !!!! ! !!!!!ML\MNrOQ.SsTGUVUVVV^V_V`Va!!!!! !!!!   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