At year’s end, the Tri-Cities had the best year-over-year growth rate of new high-end home building permits among the neighboring regions of Chattanooga, Knoxville, and Asheville. Permits for local homes 4,000 sq. ft. or more – or with a construction cost of $400,000 or more – were up 36.6%, according to The Market Edge’s 2019 Residential Permit Trend Report.
At the same time, high-end resales increased through the first quarter of 2020. During the 12 months ending mid-March, there were 326 local high-end resales. During the previous 12-month period there were 273. A low-interest-rate environment, growing jobs market, and consumer confidence drove the high-end housing market. And a built-up inventory of high-end homes gave buyers ample options compared to the sparse options the market was presenting to entry and mid-level buyers. The same dynamic drove permits for high-end custom homes.
And all of that was before the BC housing market (Before Coronavirus). The local housing market has been historically resilient during downturns, and the outlook for the rest of the year is pending.
Meanwhile, here’s how the 2019 v. 2018 high-end permit growth rate looked for the rest of the region:
Knoxville – up 3.5%
Asheville – down 6.9%
Chattanooga – down 21.1%
Of the seven area counties included in The Market Edge’s report, Sullivan had the largest year-over-year increase (up 120%) followed by Carter (up 36.6%) then Greene (up 40%)
GREENEVILLE – BRISTOL TN-VA LEAD THE WAY
Here’s a snapshot of the high-end resale market as of mid-March.
Sales of homes priced $400,000 to $599,999 increased by 37 during the 12 months ending in mid-March in the region’s four major city areas. Most came in the Bristol TN-VA and Greeneville areas – 18 in Greeneville and 17 in the Twin Cities.
The Twin Cities and Greeneville also had the largest increase in resales in the $600,000 to $799,999 price range. The total was up by 6 when compared to the previous 12-month period because the number of Johnson City metro sales took a big dip.
A search for $400,000 – $600,000 price range home on Realtor.com in mid-March resulted in 199 resales listings.
Sullivan – 55
Washington Co. TN – 47
Carter – 19
Greene – 24
Hawkins – 16
Johnson – 11
Washington Co. VA – 27
$800,000-$1 MILLION + SALES UP 58.8%
Resales at the top of the local resale market – $800,000 to $1 million-plus – had an increase of 10 in the 12 months ending in March compared to the previous 12 months. The total number of sales was 27. Most were in the Johnson City and Twin Cities areas. Kingsport was a weak third.
Nationwide the million-dollar home sales market capped off 2019 with its greatest show of strength. They were up 11.4% from 2018, according to Realtor.com.
HOW’S THE MARKET’S PULSE?
If you use 5-to-6 months of inventory to define balanced market conditions forget the $200,000 and below price range. That range accounted for about 78% of all resales before the 2015 runup in sales and prices. Its market share was 68% in 12 months ending in mid-March.
All of the local area markets were at the bottom end of normal conditions in the $200,000 to $399,999 price range, with the exception of the Johnson City area.
Categories: REAL ESTATE