County housing markets make up for softness of 2013 Kingsport, Bristol TN performance

PP2013 K-B MSA

Data source: Northeast Tennessee Association of Realtors Trends Report.

If you want a classic example of just much housing markets vary look no further than the Kingsport-Bristol MSA’s 2013 year-ender.

Annual sales and average price data show an almost static market.  Ten more homes were sold than during 2012 and the average sales price was up $2,596.  Average sales prices also haven’t drifted very far from what they were in 2008 – the year before the recession hit the local market.

But that’s a description of seven distinct markets in one geopolitical jurisdiction:  Kingsport; Bristol, TN; Bristol, VA; Sullivan County; Washington Co. VA; Hawkins County; and Scott County, VA.

Snapshot of each individual market

Here’s what the 2013 looked line in those markets when compared to 2012:

Washington Co. VA. Home sales increased by 37 and the average price was a $22,074 improvement.

Bristol, VA.  Eighteen fewer homes were sold in 2013, but average sales price was $23,398 higher.

Sullivan Co. Two more homes sold in 2013 than did in 2012 and the price improved by $4,826.

Kingsport. The total number of homes sold was down by eight and the price was down by $10,443.

PP2913 K-B Sales

Data source: Northeast Tennessee Association of Realtors Trends Report.

Bristol, TN. The number of homes sold was down by 23, and the average price was up $2,471.

Hawkins Co. There were 59 more home sales in 2013 than during 2012, and the average sales price for those homes was down $3,721.

Scott County. Nineteen more homes sold during 2013, and the average sales price was down $17,206.

Two largest city markets don’t lead the way in 2013

Kingsport is the MSA’s biggest market and it has a good year in 2012. It was a year that put the average price and sales back to pre-recession levels. It was also a performance pace the market couldn’t sustain in 2013.

A similar situation existed in Bristol, TN. Prices were better than 2012 for seven months, but sales lagged the 2012 market for seven months.

Bristol, VA was the standout city market for 2013 – at least as far as the numbers go. Sales were down a little, but the average sales price as up by 24.5%. That market took off in January with a big sale that skewed the monthly data. That’s not uncommon in small markets. Prices outperformed 2012 for seven months.

NETAR used sales and price data for school zones to identify city markets and since 2013 was the year the recovery spread to counties and smaller markets that balanced the softness in the MSA’s two largest city markets.

So why the lack luster performance when the housing market as a whole was going gang busters?

Weak jobs picture one of the drivers of softer-than-expected housing market

Jobs are the first consideration. When push comes to shove the housing market is about jobs, and the Tri-Cities is pushing its way through a rough patch that began in 2012 and extended into 2013. Basically, the region has given back many of the job gains it made during its early recovery from the recession. Kingsport-Bristol hasn’t suffered as much as the Johnson City MSA but considers this. As of November Kingsport-Bristol had added 1,600 nonfarm jobs when compared to November 2012. At that same time the labor force shrunk by 1,260 people. That’s a combined effect of the number of people looking for work, those who have retired – or been forced into early retirement, or become just dropped out of the labor force.

Family incomes have also been squeezed

There’s also a salary squeeze going on. While the average weekly pay for private sector workers is increasing, the average family median income took a $41 a week hit between 2008 and 2012. That hasn’t substantially improved.

When compared to a pre-recession nonfarm high, Kingsport-Bristol is down 2,400 jobs.

We’ll get a better look at that picture next week when the December jobs numbers are released.

How does appreciation look for home sold in 2008?

One benchmark I like to look at when using NETAR’s Trends Report is a comparison with the Federal Housing Finance Administration home price calculator. Q4 data isn’t available yet, but if you take the average Kingsport-Bristol sales price from 2008 and plug it into the calculator for a comparison to the Q3 2013 price you see the purchase is underwater by a little over $1,000. Comparing NETAR’s annual prices for the same period shows a 0.5% increase so the two data sets say basically the same thing – the five-year appreciation has come catching up to do. Before the recession the five-year appreciation number was 32.41%.

During Q3 last year 15.2% of all the homes in the MSA were underwater.  That number was in in Q3 after trending down for three quarters.

The MSA’s mortgage delinquency rate also turned higher in Q3 after trending lower for two quarters.







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