Strong local home price growth dwarfs foreclosures, underwater mortgages


TRI-CITIES, Tenn. – Home prices continue tracking higher. At the same time new foreclosures and delinquent mortgages are running slightly higher and outperforming US market norms.

There were 37 new local foreclosure filings last month – four more than last year, according to ATTOM Foreclosure Market Report. ATTOM is a leading curator of land, property, and real estate data. July’s increase is a 0.1% local increase. US year-over-year filings were up 5%.

An earlier ATTOM’s analysis on home equity listed an increase of 589 properties with seriously underwater mortgages. They accounted for 2.9% of mortgaged properties in the second quarter – a 0.3% increase from last year. The same report listed 57.2% of the local mortgaged properties equity rich.

News of the flat local foreclosures filings came at shortly before the National Association of Realtors’ (NAR) Research Department reported Kingsport-Bristol ranked sixth in the nation for metro areas with the largest existing single-family home price percentage gains in the second quarter. The local increase was 11.5%.

NAR’s report also shows the existing home sales growth in the two Tri-Cities metro areas is outperforming both Knoxville and Chattanooga. The second quarter report shows Johnson City up 5.5%, Kingsport-Bristol up 11.5%, Knoxville up 1.9%, Chattanooga down 0.8%.

At almost the same time, CoreLogic’s reported its Home Price Indices for the region were up. The 12-month single family index of combined sales and distressed sales in the Johnson City metro area was up 8.08%. The Kingsport-Bristol HPI was up 5.13%. The year-over-year forecast is for a 4.32% increase in Johnson City and 4.21% in Kingsport-Bristol.

“The bump in price growth echoes economic resiliency, a thriving job market and strong consumer spending,” said Selma Hepp, chief economist for CoreLogic. And while higher mortgage rates are impacting affordability for buyers with loans, almost four in 10 US sales are all-cash transactions, she added. Locally, cash sales account for one in every three existing home sales. “Also, most baby-boomer homeowners have substantial equity, which could put pressure on prices in markets where that generation is currently migrating,” Hepp added.

Baby Boomers make up a notable share of the new residents the Tri-Cities region is attracting.

The NAR, CoreLogic and ATTOM foreclosure reports show the local housing market putting more financial resources in the hands of homeowners and providing more options to avoid foreclosure.

ATTOM CEO Rob Barber said the filings report we are seeing is yet another sign of a rebound housing market. “However, given with the US housing market remains in flux, the various forces at play could keep the market improving or turn it back downward over the coming months.”

That’s not as much of an issue in the local market, which is seeing a decline in the number of sales as consumers struggle with higher mortgage rates and an inventory shortage. But high local demand combined with the inventory shortage is pushing prices higher, so far this year.

Each month’s new listing growth has been absorbed by new sales since the last month of 2020. That dynamic has left the local market with less than two months of inventory on the market. It’s been that way for the last 20 months.

Categories: REAL ESTATE