The Tri-Cities area housing market is beginning to look more like what experts expected. They predicted higher mortgage rates, continued double-digit price increases, and a lack of inventory would start cooling the overheated market as the prime buying and selling season began. During the 12 months ending in mid-April, sales were down 4%, and inventory began making small gains.
While that’s not much sort-term encouragement to frustrated buyers and real estate professionals, it illustrates the market is slowly tracking more balanced conditions. That’s something the local market hasn’t experienced since the first quarter of 2018. Since then, sales have increased by 25%, and the median sales price is up 33%.
It’s been a transitional period for both the housing market and the region’s evolution as a nationally recognized location with an inviting business climate, manageable cost of living, and a good place to live, according to Jerry Petzoldt, CEO, Owner, and Principal Broker for the TCI Group. He’s not the only person making that observation. Local regionalism advocates, the Wall Street Journal, Realtor.com, and several studies that track where people are moving have noted the region’s reputation and potential. That potential will get another boost with the debut of the Bristol Casino and Hard Rock Café.
Another awakening phase comes with the summer and fall tourist season. Many residents who have relocated to the Tri-Cities say their decision was cinched after visiting the area. Taken to its logical conclusion, there are two big advantages for the region. The first is the extension and expansion of outdoor recreation as tourists visit the area and use the ever-expanding recreation opportunities. Since tourism is a significant contributor to local economy building and a jobs provider it’s a definite plus. According to state officials, tourism accounted for a $1.9 billion addition to the state’s economy. That’s expected to increase this year.
It’s also an organic component of city and county programs to recruit new residents. That’s important because new residents are the only way the region’s population grows without new companies relocating here. And both business and industry follow population growth.
Housing has been and continues to be a powerful relocation incentive. The ongoing and planned addition of new single-family homes, townhomes, and apartment homes should continue in that role. The current increase in apartment demand has made multi-family developments a high—value asset in commercial real estate.
During the 12-months ending in April, the market share of home sales has shown some shifting in the city region’s performance. While the Johnson City market continues to dominate the region with the total market share, it has lost share in nine of the 12 home price ranges. At the same time, the Kingsport region has gained market share in six price ranges. The Twin Cities has achieved in four price ranges, and the Greeneville region is up in five price ranges. Overall, this is a healthy trend that will build new wealth for homeowners.
Market share is a tool to track how markets are performing and in what price ranges.
While inventory is still very tight, it is beginning to make small improvements. Market watchers look for competition in the upper price ranges to ramp up for the rest of this year as mortgage rates move toward what some think will be a 6% peak. That’s a considerable increase from the all-time low rates below 3%. The annual average outlook is for an average of 5.5% to 5.75%