Cash is still king in the Tri-Cities housing market. They were down in four NE Tenn. counties when compared to last year, but every county in the region had a higher Q2 all-cash share than the 28.9% posted for the nation in Attom Data Solutions current Home Sales Report.
The highest local share of cash sales was Sullivan followed by Greene and Carter counties.
When the spotlight is turned on institutional investors the only locals making bigger bets that institutional investors nationwide were in Greene, Hawkins and Sullivan counties. But just because local institutional investor sales were off in Q2 doesn’t mean individual investors were not snapping up homes for rentals or betting on flips. Many flippers have posted solid returns on investment since the local inventory tightened up.
Local all-cash sales have consistently been higher than the national average for a couple of years, and Census data show the region has a 5.7% rental vacancy rate while 29.7% of all properties in the seven-county region are rentals. And, the housing trend is seeing a rental preference upturn by elders, Millennials and those re-locating to the region.
Attom identifies investors as an entity buying at least 10 properties in a calendar year.
Here’s a breakdown of the percentage of cash sales compared to Q2 last year.
Carter – 48%, down from 48.2%
Greene – 50.3%, up from 44.5%
Hawkins – 38.4%, down from 43.3%.
Johnson – 39.5%, down from 55%.
Sullivan – 67.3%, up from 35.2%.
Washington TN – 33%, down from 31.9%.
Bristol VA – 42.5%, up from 38.9%
Washington VA – 36.1%, up from 26.8%
U.S. – 28.9%, up from 27.3%.
Here’s how the institutional investor purchases looked as a share of total sales compared to Q2 last year.
Carter – 0.6%, down from 2.5%.
Greene – 2.7%, down from 3.7%.
Hawkins – 2.2% down from 3.4%.
Johnson – 0%, no change from last year.
Sullivan – 4.3%, up from 2.1%.
Unicoi – 1.8%, up from 0%.
Washington TN – 1.8%, up from 1.6%.
Bristol VA – 1.4%, up from 0%.
Washington VA – 0%, no change from last year.
U.S. – 2.1%, down from 2.6%.
A likely reason institutional investors have backed off locally is supply and demand finally kicked in and average sales prices began increasing this year. Although local sales have been closing at a record pace for a year and a half the average price increase remained stubbornly low until this year.
According to the Northeast Tennessee Association of Realtors’ mid-year Trends Report the six-month average sales price up 5.1% higher than it was during the first six months of last year. It was also the best six-month average in nine years.
Local sellers saw an average gain of $8,102 during the first half of this year. It was the best dollar gain since the first six months of 2012.