By DON FENLEY
GRAY, Tenn. – Rapid mortgage rate increases are nudging Tri-Cities’ short-term home prices lower, according to the Northeast Tennessee Association of Realtors (NETAR). September’s typical price dropped $10,000 from the plateau it parked on three months ago. Still, it’s almost 15 percent higher than last year.
At the same time, sales continued a downward arch that began in July. Last month they were 18 percent lower than September last year and dropped below the pre-pandemic level for the first time. That’s a noteworthy because 2019 was the last year the region has seen anything close to a normal market.
“These are clear signs that the market has reached an inflection point and a transition is underway,” said Rick Chantry, NETAR president. “The average 30-year mortgage rate has doubled from this time last year, and some think it will soon be at historical averages in the 7 percent range. That’s boosted the typical mortgage payment by upwards of 45 percent, sidelining some buyers who rely on income rather than wealth to buy a house.”
Mortgage rate increases and frothy home prices have put today’s monthly payments in the upper limits of the local housing market’s history. That has all but evaporated some local county markets’ reputation for affordable housing. Fortune magazine quoted Moody’s Analytics Chief Economist Mark Zandi this week saying, “Prices feel a lot less sticky than they have historically. It goes back to the fact they ran up so quickly, and sellers are willing to cut their price to try to close a deal.”
Cutting prices showed up in NETAR’s Home Sales Report. There were more discounted sales last month than those sold above the listing price. Sellers reduced their price on 302 sales last month. The typical reduction was $17,193. There were 228 sales above the asking price. The above average was $9,043.
There were 729 closings in September. That’s 49 fewer than August and 138 fewer than September last year. The final monthly sales number typically increases when late filings are added to the mid-month update.
Last month’s typical existing home sales price was $235,00. It was $245,000 in July and August. The median price peaked at $250,000 in May.
Active inventory was up eight properties but down 5 percent from last year. New listings have slowed, which is typical for a market entering the fall season. At the end of September, the region has 1.7 months of inventory. That’s the time it would take to sell all properties on the market at the current sales pace. “Supply has been flat for the past three months,” Chantry said.
The typical home sale that closed in September was on the market for 47 days. Average listings are still going under contract in about two weeks or less.
Last month, sales were down in 12 of the region’s 16 city and community submarkets. The typical sales price was up in 12 markets.
Categories: REAL ESTATE