Existing Tri-Cities homes sales for the 12-months ending Feb. 10 were down. That was expected. Housing market economists and experts said months ago the market was on the cusp of moderating from the pandemic sales and price surge. But for those not accustomed to looking at 12-month trend lines the extent of the decline wasn’t expected. Twelve-month timelines typically don’t register a lot of vitality, but it was down 10.5% when compared to the 12-months ending in mid-January. But it illustrated a moderation shift and created some added interest for what next month’s report would show.
One way to look at the Feb. report from the TCI Group study is to compare the sales gain for the 12 months ending in January to the Feb. report. They are within nine sales of balancing each other. The extra nine went into the loss column.
The gain/loss between the two periods also tracks other trends in the housing market and economies of the region and its four major market areas. For instance:
While the Johnson City area continues to dominate home sales, Greeneville and Kingsport are showing gains while Bristol is slowly coming off a winning streak. Don’t mistake that overview as a signal the housing market is tanking.
The big picture is the region’s resales are 21.4% higher than the pre-pandemic level. That’s a hefty increase for a region with a history of an annual appreciation rate of just under 3%.
The TCI Group is the region’s largest commercial real estate practice and doesn’t directly participate in the residential market. Its residential market research is one example of CEO and President Jerry Petzoldt’s board-based interest in the region’s economy and implementation of a new data-based commercial and investing service. “Much of the strength of what we’re seeing in today’s commercial real estate market – transactions were up 51% in February – is a result of the five-year residential sector gains,” he said. Residential gains are indicators of both new household formations and population growth. Attracting new residents as the region is experiencing is human capital growth and a magnet for new businesses, business expansions, and investors. It also walks hand-in-hand with economic development.
Although the housing market is bucking some strong headwinds in both the existing and new home markets the demographic basics and dynamics still look good, he added. And that has attracted a surge of investor interest.
Tracking 12 months of cumulative home sales on a monthly basis offers a strong view of both buyer preferences and market trends. For instance, it identified increases in the market share of homes in the $200,000 to $300,000 price range years before inventory became so much of an issue. Currently, homes in that price range account for 27% of all existing home sales. Four years ago, homes that sold in the $200,000 to $400,000 price range accounted for 24% of all sales.
Tracking market share by price range also segments which price ranges attract the most buyers and in what areas. That’s a demographic indicator that interests investors and businesses. An example from February’s report is the Twin Cities accounted for almost one-in-three of the region’s 70 sales in the $900,000 to-$999,999 price range in the 12-months ending on Feb. 10. And that’s in an area that’s coming off an overall market share gain last year.
Market-share tracking by price range also shows that the Greeneville region has experienced strong growth in the $700,000 and upmarket when compared to 12-months ending in mid-Feb. last year.