CoreLogic, NETAR reports point to strong Tri-Cities area housing demand, improving prices

Home Price Indexes (HPI) for the Tri-Cities’ two metro areas were up in May and followed the national pattern of softer prices as markets ease into the summer season.

CoreLogic’s current HPI shows the Johnson City metro area 4.5% better than May last year while the Kingsport-Bristol index was up 1.2%.  National home prices were up 5.9%.

CoreLogic’s forecast points to another slight softening next month with a 5.3% increase. Individual forecasts for metro areas are not available.

“Housing remained an oasis of stability in May with home prices rising year over year between 5 percent and 6 percent for 22 consecutive months,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The consistently solid growth in home prices has been driven by the highest resale activity in nine years and a still-tight housing inventory.”

“Price appreciation continues to be fairly broad-based across the U.S. From a regional perspective, the Pacific Northwest continues to be the hottest area for home-price growth, with Oregon and Washington leading the way,” said Anand Nallathambi, president and CEO of CoreLogic. “The recent turbulence in financial markets should lead to modestly lower mortgage rates, which will provide even more support to the steadily improving real estate recovery.”

Resale activity on the local level, measured by the Northeast Tennessee Association of Realtors Trends Report, continued its hot streak in May.

Resales in the four-county Kingsport-Bristol MSA were 25.5% higher than May last year, and the year-to-date total is 16.9% higher than the first five months of last year. Price performance hasn’t sizzled like sales. May’s average was 1.7% better than last year, and the year-to-date average was up 1.8%.

Activity in the three-county Johnson City metro area mirrors the Kingsport-Bristol pace and then some.

May resales were 30.1% better than last year, and year-to-date resales are up 24%. The average price for the metro area has declined for three months. May’s average was down 5.3% from last year while the year-to-date average was up 1.4%.

May resale of single-family and condos were at their highest volume since NETAR began collecting data for the Trends Report in 2008. The report covers 11 counties in Northeast Tennessee plus Washington, Scott, Lee and Wise counties in Southwest Virginia.

Year-to-date average price data from NETAR’s report and the CoreLogic HPI show the same basic trend performance even though the data for the two reports differs. NETAR’s data is an average of resales listed on the local Multiple Listing Service while the CoreLogic index is a repeat sales index drawn from public record, services, and real estate databases.

The trend lines from both reports show prices in the Johnson City metro area peaking in February and March then declining.

In the Kingsport-Bristol metro area, the trend lines were in opposition in February. CoreLogic showed an increase from January while NETAR’s data point to a decline. The two were on the same footing in April and May.

Much of the difference between the two reports – and the reason for the smaller price increased in the NETAR data – comes from strong resales in the lower-price tiers of the market while the middle and upper priced home market is struggling.


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