While there is some softness in overall existing home sales, the local $500,000 and above existing market continues booming. Last month there were 101 sales. That is more than twice the number sold in May last year. And sales have increased every month since the first of the year, according to the Northeast Tennessee Association of Realtors (NETAR).
There’s also no lack of high-end inventory. During the last two months, new listings for them have more than doubled where they were at the beginning of the year. Active inventory has also increased every month since February.
The local data on the living-large segment of the Tri-Cities population is counter to reports that sales of high-end homes are slowing in the wake of rising mortgage rates, soaring inflation, and a shortage of properties for sales.
So, why’s the local high-end market soaring?
As the data show, inventory is increasing. Maybe that’s happening because sellers think the market is about the peak. And both sales show there’s no lack of demand.
There’s also a value proposition for those who can afford it. It’s estimated that new residents from high property value states like California and Washington State have a housing budget about 30% higher than what local buyers have. That means the $500,000 home here is comparable to about $650,000 in the market they’re accustomed to seeing.
How long the boom in local high-end home sales will last is anyone’s guess. So far, the music for local high-end housing hasn’t slowed down, and buyers and sellers are dancing as fast as they can. A mid-June check of local listings shows 155 properties in the $500,000 to $1 million price range and 41 listings for $1 million and above.
Much of what happens for the rest of this year and next centers on the population trend. The region is currently still seeing its best population gains in a decade. Almost all of that growth is from new residents, and most of the local market watchers expect that to continue. But there are headwinds and sustaining the current growth rate is not guaranteed.
During the pandemic, the death rate spiked and the birth rate plummeted. There are early signs the birth rate is beginning to pick up and the death rate is coming down. Still, the region is dependent on new residents for population growth. It has to attract over 30 new residents a day to maintain its 2020 population gains, and there are some signs the immigration trend is beginning to slow. During the coming months, new Census estimates will provide some estimates on the growth of things like population by age groups and household and family incomes that will help baseline the what has and may be developing.
Categories: REAL ESTATE