NOTE – This report has been updated to correct percentage typos
By DON FENLEY
TRI-CITIES, TENN. – After 13 monthly declines, the Appalachian Highlands long-range housing tracker turned positive in March. The TCI tracker also affirms a dramatic growth of the region’s Move-Up Market and sales dominance of that market segment in the Johnson City region.
Since the tracker is based on 12 months of existing home sales each month, its movement is more trend reflective than monthly sales. There were 50 more sales this month than during the 12 months ending in mid-Feb. The tracker’s performance during the spring home buying and selling season will gauge the resilience of the slight improvement.
Performance monitoring of the housing market’s three segments shows how each segment has evolved and its effect on the broader market’s price structure.
The three segments are:
- The Affordable Market.
- The Move-Up Market.
- The Luxury Market.
The price bands for each segment reflect both the local economy and housing market and vary from community to community and over time. Here’s the current markets segmented by price bands.
- Affordable Market, the three price bands in the price ranges of $100,000 to $299,999.
- Move-Up Market, the four price bands in the price ranges of $300,000 to $699,999.
- Luxury Market, four price bands from $700,000 to $1 million and above.
Since the 12 months ending mid-March 2022 to mid-March this year, the Affordable Market has declined from 78.7 percent of all sales to 65 percent. The shift has made the market tougher for first-time buyers and those shopping for workforce housing.
During the same periods, the Move-Up Market grew from 25.7 percent to 31.9 percent of all sales. This segment continues to be the sweet spot for buyers moving to the region and those whose income was not crimped by the pandemic.
The Luxury Market accounted for 3 percent of sales in the 12 months ending in mid-March 2022 to 3.1 percent of sales this year. Both existing and new home construction in these segments continues to benefit from the value position of high-end homes in the Appalachian Highlands to comparable homes in the surrounding regions.
The Move-Up Market’s growth reflects the evolution of the region’s housing from the Affordable Market to one that is becoming more closely aligned to neighboring markets. It has also been the primary driver of increasing the region’s median sales price by double digits.
The Affordable Market decreased by 13.7 percent across the region during the comparison periods. The biggest decline was in the Johnson City regional market.
The Move-Up Market’s total sales increased by 6.2 percent across the region. The Johnson City region had 2.8 percent growth, followed by the Kingsport region with 1.5 percent. The smallest gain (0.8 percent) was in Bristol TN-VA. The Greeneville region saw a 1.1 percent increase.
The Luxury Market is slightly softer but only by 19 sales during the current 12-month period. The Johnson City and Kingsport regions saw 0.1 percent increases, Greeneville was up 0.04 percent and Bristol TN-VA declined by 0.1 percent.
Although inventory remains very tight, it’s beginning to increase in some price brands in some markets. The Greeneville region currently has the best inventory in the Move-Up Market. At mid-March it had 5.3 months of inventory in the $300,000 to $399,999 price band. That’s the bottom end of what’s considered enough inventory for balanced market conditions in that price range.
Categories: REAL ESTATE