Seller returns on resales were going gangbusters during the first three months of this year. The typical home-seller profit represented a 33.7% return on investment compared to the original purchase price. That was the situation nationwide and the local price gains were solid. But that part of the story isn’t being told.
Sellers in the Kingsport-Bristol Metropolitan Statistical Area (MSA) likely had a very similar return, but since the Tri-Cities marketplace is divided into two MSAs it didn’t reach the 1,000 sales benchmarks to be considered in ATTOM Data Solutions analysis. Sales for the Consolidated Statistical Area (CSA) – that the region’s designation – were well above the benchmark but finding an analysis with a CSA benchmark is like finding a turtle on a fence post.
The 2019 year-end typical home seller gains in Kingsport-Bristol was 43.8% and 30.1% in the Johnson City MSA. Q1 returns in the Chattanooga MSA were 34.6% compared to the 34.2% annual gain last year and 28% compared to 38.2% last year in the Knoxville MSA.
The reason that the local market’s exclusion is nettlesome can be found in this week’s Harris Poll. It found nearly a third of Americans are considering moving to less densely populated areas in the wake of the pandemic. That may foreshadow a shift that would have a major impact on residential real estate sales and home prices. Currently almost half of the traffic for Tri-Cities listings on Realtor.com comes from metro areas outside the region.
It’s another instance of how the local market comes up short in statistical reporting.
“The national housing market continued at full throttle in the first quarter of 2020, setting new price and profit records as it entered its ninth straight year of gains. After it looked like things were settling down last year, the market has again roared ahead, with significant increases,” said Todd Teta, chief product officer at ATTOM Data Solutions. “It is extremely important to note that the latest momentum is likely to hit a wall and reverse because of the drastic economic slowdown caused by the Coronavirus pandemic. Millions of Americans are newly unemployed, and most people are practicing social distancing, which could bring things to a halt just as the Spring buying season begins. Despite that cloud, the numbers for Q1 still do remain upbeat.”