Kingsport-Bristol housing market sizzles when compared to national report


Kingsport-Bristol’s housing market ran circles the National Association of Realtors’ March existing home report.

Existing-home sales were soft across the nation and price growth moderated, according to NAR’s report.

But  data compiled from the Northeast Tennessee Association of Realtors’  Trends Report shows home sales in the four-county Kingsport-Bristol MSA were12.7 percent better than March last year.  And the average sales price was up 8.6 percent. March with the first straight month the average price has increased.

The local Q1 housing data wasn’t quite as strong as March. When compared to Q1 2013, sales were up 8.4 percent and the average price was up 2.7 percent.

That’s pretty strong for a housing market that struggled for almost the entire last half of 2013 to keep up with its 2012 pace.  It struggled because when you look at the data the Kingsport-Bristol MSA housing market regained pre-recession performance in 2012, then hit a soft patch in the last half of the year.

So what’s changed that would cause such a dramatic turn around?

It’s a combination of little changes. Things like:

–        The list-to-price ratio is closing. That means while discounts and price reductions haven’t gone away they’re closing in favor of the seller.  Zillow’s current Kingsport-Bristol analysis shows a median listing price of $140,000. Almost a third of the listings ( 31.3%) have been reduced. And the average amount of the price cut is 5.5%.

–         The local and region has regained what Terry Orth of Orth Homes considers an important strength.  He was quoted in the current issue of the Business Journal saying “out-of-towners and retirees…are starting to come back.” That’s a result of markets elsewhere improving enough for those folks to sell their home and relocate. Keep your eye on this factor. It’s becoming an increasingly important economic development factor.

–        The foreclosure rate has been below 1% for eight straight months and is exerting less downward price pressure. NETAR data show foreclosures accounted for a little over 20% of sales during the first quarter. That’s down 7% from the first quarter of last year. According to RealtyTrac, foreclosure discounts are also lower and the average sales price is higher.

–        Negative equity reports shows the MSA’s primary counties have a sizeable number of households that are defined as equity rich.  Zillow defines equity rich as households as those with at least 50% equity.  The same counties show negative equity is decreasing and there are a notable percentage of household classified as emerging. That means they have between 10% negative and 10% positive equity. The traditional equity sweet spot is roughly 20%.

–        While the bulk of homes sold in the Kingsport-Bristol market are sold in the $200,000 and under range, sales in the higher-price categories have ticked up.

–        Home prices in the MSA are on up upward trajectory. On a quarterly year-over-year comparison, the Trends Report data show the average price has increased for five straight quarters. Zillow’s 2014 home value forecast for the Kingsport metro area is a 2.7% increase.

–        There are signs stringent mortgage underwriting standards are easing, especially credit score requirements. The standards are still a headwind for entry-level and single-income home buyers, but the overall outlook is improving.

–        And here’s the biggie. Despite some soft job market reports, higher interest rates and higher home prices consumer confidence is much better now than it was this time last year.  And when consumers are more confident they’re prone to dust off their housing plans they put on the shelf during the recession and loosen up the purse strings.

According to the data compiled from NETAR’s Trends Report, 474 single-family, previously owned homes were sold during the first three months of this year. That 37 more than the first quarter last year and the same number sold in Q1 2008.

During March 186 homes were sold, up 21 from the same month last year.

March’s average sales price was $148,270, up $11,795 from March last year. The average Q1 price was a $3,715 improvement of Q1 2013 and $3,648 better than Q1 2008.

NETAR’s President, Louie Leach, expects continued growth at a moderated pace as the market enters its prime season. Some of the activity will come from weather delayed shopping. Another positive is job creation is slowly beginning to increase.

Home equity increases and the share claimed by foreclosures is declining adds to the momentum. Foreclosures accounted for 19.9% of home sales in March. Nationally the number was 10%. NAR Chief Economists Lawrence Yun says he expects to see distressed sales with a single-digit share later this year. Getting foreclosure sales in the single-digit range here is simply a matter of selling enough of the inventory and lowering the foreclosure filing rates.  According to RealtyTrac’s reports the filing rates are already coming down.

While Kingsport-Bristol doesn’t have an inventory shortage – it’s actually a little better than last year – there are inventory issues. There are quite a few stale listing on the market. Some are in undesirable locations, others are over-priced and the owners refuse to budge. NETAR’s data shows the average home sold in March was on the market for 155 days. But Leach says homes that are priced competitively are selling much faster.

Here’s what the Q1 market performance of the city and county markets that make up the Kingsport-Bristol MSA looked like.

Sales, ranked by percentage gain from Q1 2013 followed by total sales during the quarter:

Bristol, TN up 40.8% – 69.

Kingsport, up 33% – 117.

Scott Co. VA, up 29.3% – 24.

Sullivan Co. up 26.3% – 314.

Hawkins Co, down 12.5% – 77.

Washington Co. VA, down 15.7% – 59.

 Average price ranked by percentage gain from Q1 2012 and the Q1 price.

Kingsport, up 23% – $164,436.

Bristol, TN, up 3.5% – $119,849

Scott Co. VA, up 23.3% – $94,513.

Washington Co. VA, up 8.7% – $160,163.

Sullivan Co., up 1.7% – $144,485.

Hawkins Co. up 1.3% – $117,217.

 

 

 

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