Home price gains show another month of improvement on CoreLogic Home Price Index

CoreLogic’s April Home Price Index (HPI) shows the Tri-Cities Housing Market continues improving as the area’s leader in economic recovery. The index is a second-source look that uses a separate data that affirms positive indicators from the Northeast Tennessee Association of Realtors, RealtyTrac and other sources.

The just-released HPI shows a 0.8% increase from April last year in Kingsport-Bristol and a 4.8% increase in the Johnson City metro area.

The Northeast Tennessee Association of Realtors’ Trend Report has been reporting sales that exceed pre-recession benchmarks for 12 straight months. Home price gains have also moved past the benchmark, but at a more conservative pace.

NETAR’s Trends Report monitors prices based on sales of property listed on the Regional Multiple Listing Service. CoreLogic’s HPI is based on repeat-sales transactions from public records.

The Johnson City metro year-over-year CoreLogic HPI has been positive for 31 months, while Kingsport-Bristol has been positive for 12 months. NETAR’s Trends Report shows the average annual home sales price has increased for the past four years in Kingsport-Bristol and the past three years in the Johnson City metro area.

“Low mortgage rates and a lean for-sales inventory have resulted in solid home-price growth in most markets,” said Dr. Frank Nothaft, chief economist for CoreLogic. “An expectant gradual rise in interest rates and more homes offered for sale are expected to moderate appreciation in the coming year.”

“The appreciation in home prices over the past year reflects the gathering pace of the recovery in housing in most states and regions in the U.S.,” said Anand Nallathambi, president and CEO of CoreLogic. “The rate of recovery does vary somewhat based on local conditions.”

Tri-Cities area conditions show the home sales pace hasn’t run its course, yet. The pace has picked up since local labor market reports turned positive during the last quarter of 2015. It will continue for the next couple months. NETAR President Marsha Stowell said this week that local pending sales with accepted offers available at the end of May were up 61% from May last year. Pending sales take anywhere from six weeks to two months to move to the closing stage.

She also pointed out that there a few headwinds pushing against the sales trend. Mortgage rates have shown some early signs of moving a little higher, but they are still so low it’s not a big concern to most buyers.

On the labor market front, local private sector wages are now increasing at a faster rate than the creation of non-farm jobs. That’s an extra shot of consumer confidence building adrenaline for the market.

The equity status of local mortgages is also a positive indicator. The first quarter equity report from RealtyTrac showed that all local markets with the exception of Bristol VA and Washington County VA exceed the national share of equity-rich properties. Equity-rich means the owners have 50% or more equity in their homes. The same report showed all local markets except Washington County, VA, Bristol VA and Unicoi County had a lower share of properties that were seriously underwater. That’s defined by owners who owe at least 25% more on their mortgage than the estimated value of their home.

The only negative indicator at play is population. According to the latest Census reports the cumulative estimated Tri-Cities population change from April 2010 to July 2015 was down 490. There were 5,089 more deaths than births. New residents moving to the area is the prime source for population gain.



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: