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%

 

 

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