By DON FENLEY
GRAY, TN – The Tri-Cities housing market began shrugging off its winter doldrums in February, according to the Northeast Tennessee Association of Realtors (NETAR).
The association’s February Home Sales Report says, “Sales reversed a seven-month decline and prices perked up after an eight-month stagnant stretch.” They are small gains, but it does show the market is stirring on some fronts, and still bogged down on others.
“Sales are up, prices are up, demand indicators are spiking,” said NETAR President Jan Stapleton. “But the positive sales and price numbers in last month’s report are balanced by others that are not budging. For instance. Months of inventory has been flat for eight months, and active inventory has been stuck in the 1,300 listings range for six months.”
There were 431 sales last month. That’s nine more than January and 156 fewer than February last year. Sales will likely be higher for the mid-month pending sales report to account for closings reported too late to be included in the early February count.
Last month’s median sales price increased to $240,000 from $221,000 in January. This time last year it was $210,000. February’s price is $10,000 below the all-time high of $250,000 set in May last year.
The price increase comes when affordability has stepped to the forefront of market conversions – especially workforce housing.
Washington Co. moved to an unaffordable status late last year on ATTON Data Solutions’ House Price Index. Its said the average working person in Washington Co. did not have the buying power to qualify for a median-priced home loan.
Sullivan Co. had not reached that status, yet. But the Atlanta Federal Reserve Bank’s Homeownership Affordability Monitor rated every Tri-Cities county as unaffordable in its most current report.
The ATTOM Index is based on a financing formula that assumes a 20% down payment, a strong debt-to-income ratio and a good credit report. The FED’s monitor is based on the percentage of income buyers are spending for housing. The target range is 25% to 30% of income. All local counties were above the benchmark in December, with Washington Co. rated as the most unaffordable market in the region. A report on the monitor’s results with ratings, mortgage payments and how much of their income goes for housing at https://donfenley.com/2023/03/05/homeownership-monitor-rates-tri-cities-counties-unaffordable/
The primary driver of the region’s inventory issue is pending sales pace and often outnumbers new listings. An early count shows February’s pending sales absorbed last month’s new listings and depleted some of the active inventory that had been building from the previous month. And that happened despite higher mortgage rates returning with a vengeance. Last week’s average for a 30-year fixed-rate loan was 6.7 percent after settling near 6 percent in early February.
Higher inflation, a strong housing market, and policy changes at the FED are casting doubts on outlooks for lower rates during the peak season.
At month’s end, the region had 1.6 months of inventory. That’s how long it would have taken to sell everything on the market at the February sales pace.
The typical home sale that closed last month was on the market for 53, down from 59 days in January. When the time a property is on the market declines, it’s a signal that demand increased. This time last year the median days on the market were 58 days.
Categories: REAL ESTATE