By DON FENLEY
GRAY, Tenn. – Local condo sales are slowing the same way single-family sales are slowing. And, just like their single-family cousins, condo prices have increased.
During the first 10 months of this year, condo sales have averaged 33 a month. In October, there were 23, down from 28 the previous months, according to the Northeast Tennessee Association of Realtors (NETAR).
So far this year, the highest average prices have been in September ($204,301) and October ($198,035). The median sales price for September was $184,250, and $184,000 in October.
Cash sales continue to dominate the condo market. So far, 169 of the 330 sales have been cash deals.
October saw sellers come off their asking price by an average of $2,335. That’s only happened three months this year. They also reduced their asking price in January and July.
A condo’s average time on the market before closing is 44 days. That was down to 42 in October.
Although there has been an increase in condo sales this year, some of that can be attributed to price buyers. Still, developers are gradually increasing the number of townhomes and condos in new developments. That’s especially true in the build-to-rent townhome market.
One new Kingsport development on West Stone Drive was recently completed and is currently leasing. Another development is still in the planning stages. Some of the planned homes in the proposed Keeler annexation development in Gray are also townhomes.
The reason for increased build-to-rent townhome projects is they compete well with apartment communities. Earlier this year, strategists with the National Home Builders Association suggested that members look at build-rent-townhome developments and market to apartment dwellers looking for an alternative.
Earlier this year the National Association of Home Builders Chief Economist Rob Dietz explained why the townhome construction was surging. The group expects townhomes to increase to 15% of all single-family homes in the coming years from its current 13% level.
The main reason is townhomes offer more bang for the builder’s buck in this era of high lumber and material prices. And they’re good for the bottom line.
“Many builders are turning to this product, as the price point for sale is lower, and it allows them to build more units,” according to Brian Lawrence, who’s seen an uptick in townhome financing applications in his work as vice president and relationship manager at Univest Bank and Trust Co. “Profit on the project increases with increased density.”
Categories: REAL ESTATE