Booming housing market has Tri-Cities homeowners sitting pretty

2-minute read
Rising prices and little inventory are a headache for those looking to buy a home, but owners are sitting pretty. The number of Tri-Cities equity-rich owners has almost doubled, according to Attom Data Solutions. Equity-rich means they have at least 50% more equity than what they owe on the mortgage.

As of the last quarter of 2021, 43.1% of Tri-Cities’ 89,716 mortgaged residential properties were in the equity-rich class. That’s up from 26.1% at the end of 2020.

“As home prices kept rising, so did the equity built up in residential properties, to the point where close to half of all mortgage payers around the country found themselves in equity-rich territory,” said Todd Teta, chief product officer with Attom.

Local home prices were up 16.2% in 2021 and 11.1%, according to the Northeast Tennessee Association of Realtors (NETAR). Although January’s sales and prices slumped from a record-setting December, the year-over-year sales price was up 16.6%.

Tennessee, where the portion of mortgaged homes considered equity-rich rose from 41.4% in the third quarter to 47.2% in the fourth quarter, saw the biggest jump, followed by North Carolina, Nevada, Georgia, and Arizona.

Locally, Carter Co. had the highest equity-rich share. Washington Co. VA was the only county with less than 40%. Here’s how the local counties’ share look compared to the previous year.

  • Carter 47.5%
  • Sullivan – 46.5%
  • Greene 43.5%
  • Hawkins 42.8%
  • Washington TN 41.9%
  • Unicoi 41.6%
  • Washington VA 31.7%

Tri-Cities residential resale prices have been increasing for a decade. Annual increases were typical for the region until 2016 when the market went into overdrive. During the past two years, those increases have been in double digits. Click on the chart for a larger version.

While no one is certain about how long the boom will last, the strong equity picture is good for the economy and owners. “For now, homeowners are sitting pretty as the wealthy they have tucked away in their homes keeps growing,” Teta said.

Uncertainty over how the market will perform during the coming prime buying and selling season is fed by conflicting issues. The local market began the year with the lowest inventory it has ever seen, according to NETAR. There was a one-month inventory of homes for sale at the beginning of February. Balanced market conditions are five to six months of inventory. Local real estate professionals haven’t seen that since the first quarter of 2018.

Rising mortgage rates and the lack of inventory are causing some to tap the brakes on buying. At the same time, there’s still more demand and supply, which puts upward pressure on prices. The January average price of $244,234 was almost $60,000 higher than the market’s center price point of $186,000. The gap illustrates how much the average price is skewed by the sale of high-end homes.

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Categories: REAL ESTATE