Supply continues to be the strongest headwind the Tri-Cities housing market is bucking as demand increases and marketing conditions are heating up from what they were last year.
January’s Realtor.com Market Hotness Index shows listing in both of the region’s two metro areas signal a higher demand factor than the national average. That’s muted by a tight inventory that has put the brakes on the rate inventory is moving.
According to Realtor.com, the Index exposes how local areas are experiencing fast-moving supply and rising demand. Using proprietary insights on buyer activity and data on active inventory, the analysis breaks down demand and supply dynamics to rank metro areas, counties and zip codes relative to the rest of the country. Realtor.com examines listing views by market as an indicator of demand and median days on market as an indicator of supply.
JOHNSON CITY MSA
The three-county Johnson City Metropolitan Statistical Area (MSA) was ranked 106 out of the 300 metros in January’s report. The area is rated as a slightly hot market that is cooling down from last month and heating up from what it was last year. Single-family sales in the area were up 4.3% last year, according to the Northeast Tennessee Association of Realtors (NETAR) Trends Report. That was an improvement over the 1.6% annual growth in 2017. The two softer sales years followed a 17.5% annual increase in 2016 and a 12.6% increase in 2015. Sales prices increased 3.4% in 2018 and 5.6% in 2017.
Median days on the market is currently 97.25 and inventory is moving 1% slower than last year and 10.25 days slower than the U.S. overall.
The high point of last month’s Johnson City index is the demand factor. “Properties in the area receive an average number of views 1.7 times higher than the U.S. average,” according to Realtor.com.
The four-county Kingsport-Bristol MSA ranked 203 out of 300 metro areas in January. It’s rated as a slightly cool market that is cooling down from last month and heating up from what it was last year. Single-family resales were up 8.6% last year according to NETAR following a 3.7% annual increase in 2017 and 13.5% increase for 2016. Sale prices increased by 7.4% in 2018 and 2.9% in 2016. Last year’s annual sales price performance was the best the area has seen since the 8.8% annual increase in 2012.
Median days on the market is 121 and inventory is currently moving 5% slower than last year and 34 days slower than the U.S. overall.
While Kingsport-Bristol properties are not getting as many views as they are in the Johnson City MSA, they were looked at 1.2 times higher than the U.S. average.
The region’s inventory issue began two and a half years ago when sales took off. Before then it was normal to have 10 to 11 months of inventory. During the first year of the region’s record sales pace inventory dropped to a six-month supply and then to four months at mid-year in 2018. Six months of inventory used to be the rule of thumb for normal real estate market conditions. Some now suggest that the new normal is four months.