Most local counties see higher cash home sale discounts than national median – Washington Co. VA is the exception

­­­­­­ Takeaways

  • The lowest local median all-cash discount in Q1 was Washington Co. VA.
  • Carter County was the only local market where the local median cash discount paced the national median.
  • Johnson County saw the highest price per square foot median discount – 71.7%

While cash buyers in some markets are running the risk of overheating the market that’s not the case in the NE Tennessee.


All-cash sales dominated Q1 housing market in NE Tenn  


RealtyTrac’s Q1 Cash Buyers and Institutional Investor Report found cash buyers in some markets are foregoing the traditional discounts and paying a premium price. RealtyTrac Senior Vice President Daren Blomquist says those market could be in danger of overheating. “In most markets, cash buyers act as an anchor for home values, but in these exceptions to the rule, cash buyers are acting as an oversized sail, catching more wind and pushing home price appreciation to a potentially precarious pace.”

Nationwide all-cash buyers purchased single-family homes and condos for a median $91 a square foot in the first quarter of 2016, a discount of 24% from the median $118 per square foot (ppsf) for all home purchases, the report found.

Local housing prices are less expensive as the national model. None of the local markets in the report had anything close to that. The most expensive markets in our area are Washington Co. Tenn. And Washington Co. Va. The median in Washington Co. VA was $93. In Washington County, Tenn. it was $85.   Sullivan County had a median ppsf of $72.  Tennessee’s median is $80.

Washington Co. VA was the only local market where cash buyers paid less than the national median discount. It was also the smallest discount in our area – 18.2%.

The only other low discount markets were Carter and Unicoi counties. Cash buyers in Carter Co. got a median discount of 25.6% while those in Unicoi Co. got a 28.6% discount.

Median discounts in all the other counties ranged in the upper 30% range to 71.7% in Johnson Co.

One reason for high discounts – like those in some of the local markets – “is cash buyers are often willing to take on properties in poor condition that may not readily qualify for standard financing, another reason why cash purchases normally sell at a lower price per square foot,” Blomquist said.

Median Q1 discount in local markets were:

Johnson Co. – 71.1%

Washington Co. – 53.7%

Hawkins Co. – 48.5%

Greene Co. – 43.3%

Sullivan Co. – 39.4%

Unicoi Co. – 28.6%

Carter Co. – 25.6%

Washington Co. Va – 18.2%

 

 

Kingsport-Bristol, Johnson City MSA delinquent mortgage rates drop to four-year low

 

The number of Tri-Cities seriously delinquent mortgages have dropped to four-year lows.

According to CoreLogic’s current Foreclosure and Delinquent Mortgage Report, the number of delinquent mortgages in Kingsport-Bristol have dropped 2.1 points since their January 2010 high. The decline is slightly better, down 2.5 points, in the Johnson City MSA.

Declines in both of the region’s metro areas are moving independently of the jobs and wages that began showing up late last year. Their trend began arching lower in January of 2012 just like the foreclosure rate. Both are now back to pre-recession levels.

The CoreLogic data show that the rate of Kingsport-Bristol-Bristol area foreclosures among outstanding mortgage loans was 0.58% in March, a decrease of 0.08 points compared to March of 2014 when the rate was 0.66%.

The report also shows 2.76% of mortgage loans were 90 days or more delinquent compared to 3.19%t for the same period last year, representing a decrease of 0.43 points.

Foreclosures in the Johnson City metro area was 0.61%, down 0.01 points from last year. The mortgage delinquency rate decreased was 2.66% compared to 3.03% last year. representing a decrease of 0.37 percentage points.

Foreclosures and delinquent mortgages in both Tri-Cities metro areas were lower than the national level. The national foreclosure rate was 1.13% and the delinquent mortgage rate was 3.16%.

Tennessee’s foreclosure rate was 0.49% and the delinquent mortgage rate was 3.21%.

Data Notes and Definitions

90+ Day Delinquency Rate: This measures the percentage of loans that are more than 90 days delinquent, including those in foreclosure and REO (real estate owned).

Foreclosure Rate: This measures the percentage of loans in some stage of the foreclosure process. This does not represent the number of new foreclosure filings, but rather the current stock, or inventory, of loans in the foreclosure process which offers a comprehensive view of foreclosure trends. CoreLogic has approximately 85 percent coverage of foreclosure data.

RealtyTrac’s foreclosure filings report showed a substantial increase in REO filings during the first three months of this year as banks are cashing in on increased existing home sales.


Distressed sales trending higher, put downward pressure on price appreciation https://donfenley.com/2016/04/21/distressed-sales-trending-higher-put-downward-pressure-on-price-appreciation/

Tri-Cities sales tax collections, employment growth by sector show strong March gains

The two last reports to track March’s economic indicators are in and both are as positive as the job creation, employment and salary reports posted earlier on this site.


Tri-Cities employers add 1,100 new jobs in March, jobless rates drop to pre-recession levels 

Tri-Cities private sector wages on the upswing in March 


Both of the final reports come from MTSU’s Department of Economics and Finance.

EMPLOYMENT GROWTH BY INDUSTRY

The first is March’s employment heat charts. These charts track the year-over-year gains and losses but job sector and are a quick way to keep tabs on an otherwise data-laden chore.

Both of the Tri-Cities metro areas show continued job improvement with a couple of big exceptions.

In Kingsport-Bristol the information sector was hammered for the second straight month. The sector’s total job count isn’t a big player but the losses are still losses. The big gainers continue to be retail sales and the leisure and hospitality section.

The Johnson City MSA  transportation and utilities sector was deep in the red for the third straight month in March. The encouraging sector last month was construction, which posted a 4.5% year-over-year gain.

SALES TAX COLLECTIONS

sales tax

CLICKING ON GRAPH RENDERS LARGER VERSION

March was one of those double-digit gain month for sales tax collections in Northeast Tennessee.

Here’s how the seasonally adjusted year-over-year numbers from MTSU look:

Knoxville – up 16.2%

Johnson City – up 12.2%

Kingsport-Bristol – up 10.8%

Morristown – up 10.1%

It was a sharp increase after two soft months in the Tri-Cities. The year-over-year collections were up during those two months but the trend was lower.

 

Tri-Cities private sector wages on the upswing in March

The Tri-Cities’ economy got a double dose of good news in March.

Employment and the average private wage continued trending higher.

March wage

March employment, private sector wage report card

The news was especially good for the Johnson City metro area. Preliminary, non-seasonally adjusted wages increased at a higher rate than employment. Kingsport-Bristol’s increase was slightly below its employment increase.

March was the 11th straight month the year-over-year weekly average wage has increased in the Johnson City metro area.  That positive trend followed 35 months of decline. The private sector wage hit is balanced by the metro area’s total wages is considered.

The March average in Johnson City was $615 a week, up $23 from March last year.

Kingsport-Bristol’s average was $655 up $17 a week from last year.

Adjusted for inflation against a March 2008 pre-recession benchmark, Johnson City metro private sector workers has $41 a month less buying power while Kingsport-Bristol workers saw their buying power increase $27 a week.

Tri-Cities private sector wages ranked at the bottom of comparisons for other metro areas in East Tennessee and across the state.

The private sector wage is the only monthly salary metric, but it doesn’t tell the full story.  The BLS’s quarterly survey of county wages is a good counterbalance to the private sector month wage.

 

Here’s what the most recent quarterly total  wage, the year-over-year change and buying power after adjustment for inflations against the pre-recession benchmark is for the counties that make up the Tri-Cities’ two MSA’s

 

KINGSPORT-BRISTOL

Sullivan Co. – $861, up 3.4% Buying power up $28

Hawkins Co. – $709, up 5.5% Buying power up $33

Scott Co. VA – $598, down 0.3% Buying power down $16

Washington Co. VA. – $670, down 0.1%  Buying power down $8

 

JOHNSON CITY MSA

Washington Co. – $733, up 1.8% Buying power up $46

Carter Co. – $594, up 5.3% Buying power up $9

Unicoi Co. –  $771, down 0.3% Buying power up $48

 

 

 

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