Kingsport-Bristol home price indices increase, Johnson City MSA indices soften

The one and five-year Federal Housing Finance Administration Home Price Indices pointed to a pattern showing a Kingsport-Bristol housing market that is trending higher  and a Johnson City MSA market trend that while positive is showing signs of weakening.

Q2 5-year hpiThe Northeast Tennessee Association of Realtors’ Trends Reports shows an opposite trend in its quarterly price data. The average Q1 and Q2 home sales prices of both Tri-Cities MSAs increased this year. However, that data is an average of current sales of properties listed with the Multiple Listing Service while the FHFA index is drawn from a repeat sales analysis.

One-year FHFA home prices indexes in the Kingsport-Bristol and Johnson City MSAs were positive for the second quarter. They also continued moving in the opposite direction – Kingsport-Bristol has increased for two quarter while Johnson City has decreased during those two quarters.

According to the just released FHFA all-transaction Q2 index the Kingsport-Bristol index was up 3.4% from Q2 last year while the Johnson City MSA index was up 1.1%.

The second quarter was the sixth straight quarter the three-county Johnson City MSA one-year index has been positive. It peaked at 6.1% in the last quarter of 2014, dropped to 4.3% in the first quarter of this year, then declined to 1.1% in the second quarter.

1 year HPI

One-year FHFA HPI

During the same period the Kingsport-Bristol index didn’t sustain a positive standing. It was negative two quarters.  The four-county MSA recovered from a negative Q4 2014 index with a 3.9% increase in the first quarter of this year and a 3.4% increase in the second quarter.

The five-year index shows a similar trend.

The Johnson City’s five-year index moved onto positive ground in Q2 2014 and increased each following quarter. It peaked at 3.7% in Q1 this year then dropped to 2.2% in Q2.

During that same period Kingsport-Bristol’s five-year index recovered from a negative position in Q2 2014 with a 1.7% increase, posted a weak Q4 2014 increase followed by 3.8% in Q1 this year then a 4.4% increase in Q2.

Market watchers pay close attention to the five-year index as a broad indicator of equity positions as homeowners move past the traditional mid-point when they begin looking at their next property transaction. Homeowners typically do that somewhere between the seventh and 10th year after buying a home.

The FHFA HPI tracks changes in average home prices by analyzing changes in home values for individual properties. According to the agency, the underlying “repeat-transactions” methodology constructs index estimates by statistically evaluating price appreciation (or depreciation) for homes with multiple values over time.  The all-transaction index includes appraisal values from refinance mortgages which are added to the purchase-only data sample. The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

Transactions that are title transfers to lenders are not included in the data. Once lenders take possession of foreclosed properties, however, the subsequent sale to the public can appear in the data. As with any other property sale, the sales information will be in FHFA’s data if the buyer purchases the property with a loan that is bought or guaranteed by Fannie Mae or Freddie Mac


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