Equity analysis shows strength of NE Tenn. housing markets

The number of local homeowners with mortgages who moved into the equity-rich class increased in 2016. And in Johnson and Sullivan counties more than a third of all mortgaged homes are now equity rich.

According to Attom Data Solutions’ Year-End Home Equity and Underwater Report, there were 25,393 local equity-rich properties in the fourth quarter.  That’s 661 more than Q4 last year.

Attom defines equity rich as a property with a loan to value ratio of 50% or lower, meaning the homeowner had at least 50% equity. 

The local increase parallels what the report shows on the national level. The 13.9 million equity rich properties at the end of 2016 represents 24.6% of all U.S. properties with a mortgage. This is where a comparison of the U.S. vs. local share of equity-rich properties shows the strength of the local market.

Every market in the NE Tenn. region, except Washington County, has a higher share of equity rich properties than the U.S. The two local SW Va. markets included in the post we also below the national share.

Here’s how the share of equity-rich properties in local counties stacks up in that comparison.

Carter Co. – 30%

Greene Co. – 29%

Hawkins Co. – 26%

Johnson Co. – 35%

Sullivan Co. – 35%

Unicoi Co. – 26 %

Washington Co TN – 23%

Bristol VA – 19%.

Washington Co VA – 20%.

It’s also noteworthy that Johnson and Sullivan counties’ share put them in the same class as the five state with the highest share of equity rich properties. Those states are:

Hawaii – 37.8%

Vermont – 36.9%

California – 36%

New York – 34.9%

Oregon – 32%

To get a handle on the housing market big picture remember than almost half (more in some counties) of all the owner-occupied homes in the area have no mortgage.

The share of equity-rich mortgaged home also increased from last year in all but four markets. Carter, Greene, Sullivan and Washington Co. VA were down. There are any number of reasons for that. The most common is owners who used their equity for a new home.

The biggest number in this category of the study is Washington Co. VA where the number of equity-rich properties declined by 117 followed by Greene Co. with a decrease of 92. That’s tame compared to the number of owners who tapped their equity in 2015. During that year 2,281 Sullivan County owners and 53 in Hawkins uses enough of the equity to drop out of the equity-rich class. That also corresponds to the beginning of the record existing home sales increase in the region.

According to a recent study by the National Association of Realtors, the average home seller realizes a 23% gain in equity from the time they buy their home. Obviously, those who buy during an economic downturn don’t see as much gain. And owners who have been in the home long have a much stronger equity position. On average those who own between 16 to 20 year ears realize a 63% gain on sales. For those who have owned 21 years or more would realize a 145% gains, according to the NAR study.

These numbers are why the aging Baby Boomers in our area and nationwide continue to boost the real estate market since they are the owners who have typically been in their homes the longest. And they those who have no mortgage are in an even stronger equity position to downsize.

The most current Census data show that householders of 56.6% of the all the homes in the seven-county Tri-Cities region moved in more than 16 years ago,





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