By DON FENLEY
GRAY, Tenn. – Tri-Cities sellers are getting an average of $11,000 more per townhome/condo sale in the Tri-Cities region while the number of sales are down 26% from August last year. The sales decline is more of an inventory issue than lack of product popularity, according to the Northeast Tennessee Association of Realtors (NETAR).
So far this year 277 condo sales have closed. The typical sales price is $162,500. The average time on market was 46 days. That’s almost 10 days better than the single-family time on the market.
Demand for townhomes and condos has increased with the rising cost of single-family homes and higher mortgage rates. Builders are increasing output of townhomes and condos, but some of those are being redirected to the build-to-rent status to cash in on the surging demand and rent hikes. Builders are being advised to shift their marketing toward renters and focus on converting the 25% of current homeowners who would rather rent than own and those renters who don’t like apartment living.
Townhomes rentals is the apartment community’s top competition because a growing number of renters have some wants apartments don’t offer. They want their own small back yard. They don’t want someone living above or below them. Townhome and single-family rentals also tend to be more pet-friendly than apartments.
Currently, the vacancy rate for the Tri-Cities’ 6,500 apartments is 3.3%. The only other East Tennessee metro area with a lower vacancy rate is Knoxville.
The overall vacancy rate for the region’s 65,983 single-family and townhome rentals is 2.6%. It’s higher in the less desirable locations and lower in others. Some zip codes in Attom Data Solutions current vacancy report have no single-family rental vacancies.
Cash sales in the condo market has increased from 45% during the first eight months of last year to 51% this year. Half of those cash buyers are paying an average of $1,800 above list price this year. This time last year they were getting a typical deal $700 below the list price.
Categories: REAL ESTATE