By DON FENLEY
KINGSPORT, Tenn. – Now is an iffy time to pull out the crystal ball for home sales predictions. Month-to-month data comparisons are about as useful as information from your cousin who sold last year. The standard year-over-year test is skewed. It compares today’s slowly stabilizing market with the area’s highest-ever sales volume and price appreciation. And much of the mainstream media is intent on pushing a narrative that the sky is or is about ready to fall.
With that said, there’s a way to monitor long-range market trends to keep your finger on the pulse of how the market has evolved and where it’s moving.
One way to push past skewed perspectives is by analyzing 12 months of sales for every monthly reporting period. For example. This month’s TCI Group’s monthly report lists sales for the 12 months from mid-October 2021 through this month. A little extra math shows the market share for the four local regions by price tiers. Although the TCI Group is a commercial real estate firm, it tracks residential trends because commercial real estate tends to follow the population and demographic patterns the residential market reveals.
Overall sales for the 12 months ending in mid-October vs. the sales during the same period for 2020-2021 are down 6%. That works out to an average slowing of 0.5% a month.
The long-trend status of sales by price range is not only a sign of each market’s growth and stability. It’s a demographic indicator. For example, the Johnson City region continues to build on its dominance of the region’s total sales and the most expensive homes. Its overall market share is up 10.4% from what it was in the 12 months ending in mid-October 2020-2021. And it commands better than a third of sales in every price range except $100,000-to-$199,999. The icing on the cake is the Wall Street Journal, and Realtor.com selected it as the top emerging marked in the U.S. this week. That’s a marketing exposure that worth hundreds of thousands of dollars.
Another telling comparison is in the shares growth in the Greeneville and Kingsport regions. Both have seen increases in almost every price range. Greeneville’s only declines were in the $900,000-to-$999,999 (down 4.9%) and the $700,000-$799,000 (down 1.8%) ranges. Kingsport was down 4.8% in the $500,000 to $599,999 range.
Greeneville also has the best-balanced market conditions in the price tier grouping, those accounts for 84% of all local existing home sales. That grouping tops out at $499,999. It’s noteworthy that Greeneville has 5.1 months of inventory in the $400,000 to $499,999 range. Balanced market conditions are typically defined as 5 to 6 months of inventory.
While mortgage rates and prices suck most of the oxygen out of real estate discussions, inventory – especially inventory in the prices where most sales happen – will be a critical fourth-quarter factor that will carry over into the following year. Locally, inventory is slowly increasing. The price growth rate is slowing but not declining. Supply chain issues could be an expanded challenge when work to mitigate the Florida hurricane damage gets underway.