By DON FENLEY

The housing crash theory that tends to crop up during Thanksgiving discussions has once again failed to materialize. Here are the reasons there was never a valid reason that the local market was vulnerable. In fact, from a homeowners’ perspective, it’s stronger than ever.

Look at some of the local metrics that affirm the local market’s status.

There are foreclosure filings, but the rate is well below this region’s historical norm and lagging last year.

It’s the same story for the number of mortgaged properties that are seriously underwater. A property is considered seriously underwater when the loan to value ratio is 125% or higher, meaning the owner owed at least 25% more than the estimated value of the property.

Equity gains driven by the hot post-pandemic market have benefited those with financial challenges because it gave them options other than the foreclosure route.

There are currently 1,817 of the region’s 87,815 with a seriously underwater status, according to the most current ATTOM analysis. That accounts for 2.1% of the region’s mortgaged properties. It’s also below the region’s historic level and the current U.S. rate of 2.5% and the 2.7% in Tennessee. The county rate range from 1.8% in Sullivan and Washington counties to 3.9% in Johnson Co.

The metric with the most muscle and the one that pushed foreclosures and underwater mortgages to the back of the bus is those mortgaged properties that are equity rich. The report illustrates how significant that is comes in the same ATTOM report that cites the number and share of underwater mortgages.

There is no argument that the region’s equity rich property status is a boss metric. An equity rich mortgaged property is one with a loan to value ratio of 50% or lower, meaning the property owner had at least 50% equity. According to ATTOM, there are 52,893 properties in the Tri-Cities market. That’s a 60.2% equity rich share. They are more because ATTOM’s analysis doesn’t include Greene and Johnson counties.

The reason local homeowners have such a fat equity piggy bank is the years of a sizzling market that followed the pandemic. Now that the market is readjusting, the annual price appreciation is declining. Unless there’s something unforeseen that pops up between now and the end of the year, 2024 will still be a pretty good appreciation year. It won’t be in the double digits like it has been for the past four years, but it will be better than the historical average of 2.8%.

Oh, one other thing to remember about the stability and health of the local housing market is about half of the homes are mortgage-free.

Categories: REAL ESTATE