Kingsport-Bristol June home price index trends higher, Johnson City metro area index softens


CoreLogic’s Home Price Index shows June prices increased in both Tri-Cities metro areas but the trend line has Kingsport-Bristol moving up and the Johnson City metro area arching lower.

The June HPI is the final monthly housing market report before the July Northeast Tennessee Association of Realtors July Trends reports are released. Pending sales for June point to a record number of July closings and the average sales price vs. the average listing price remains in the 95% range.

HPI

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HPI’s June report shows home prices in the Johnson City metro area were 2.5% higher than June last year. Kingsport-Bristol prices were 4.5% better.

Kingsport-Bristol index has been positive for 14 months while the Johnson City metro area has been positive for 41 months on the year-over-year metric.

Both MSA have been positive in the June-June comparison period and they have shared a trend pattern that began in December. While Johnson City’s index was stronger than Kingsport-Bristol both showed a steady increase through February. That’s when Kingsport-Bristol’s price began softening. The Johnson City trend followed a month later, and in June they crossed. Johnson City prices were moving lower while Kingsport-Bristol was gaining.

Both MSAs were slightly below the national June year-over-year increase of 5.7%.

The CoreLogic HPI Forecast indicates that home prices will increase by 5.3% on a year-over-year basis from June 2016 to June 2017, and on a month-over-month basis home prices are expected to increase 0.6 percent from June 2016 to July 2016. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state. The forecast is not available for metro areas; however, the local indexes have been trailing the forecast by about a point or a little less.

“Mortgage rates dipped in June to their lowest level in more than three years, supporting home purchases,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Local markets with strong economic growth have generally had stronger home-price growth. Among large metropolitan areas, Denver had the lowest unemployment rate and the strongest home-price appreciation.”

“Home prices continue to increase across the country, especially in the lower price ranges and in a number of metro areas,” said Anand Nallathambi, President and CEO of CoreLogic. “We see prices continuing to increase at a healthy rate over the next year by as much as 5 percent.”

NETAR’s Trend report shows local average prices have been positive for all but one month this year. The year-to-date average price in June was 2.1% better than it was during the first six months of last year.

Although the CoreLogic year-over-year index and NETAR Trends Report averages differ the trend line shows the same pattern of softer price growth.

The Trends report shows that the average home sales price in June was 95% of the average listing price. It’s been in that range for most months since June last year. Home in the lower price ranges have seen solid growth during the first six months of this year while those in the higher price ranges are struggling to match last year’s sales performance.

NETAR’s averages are from sales of properties listed on the local Multiple Listing Service while the Core Logic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales.

The CoreLogic Forecast is based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index.

 

 

 

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