By DON FENLEY

What to see in one quick chart a headwind that’s causing a slow start to existing home sales now that inventory is tiptoeing with balanced market conditions in some of the primary price ranges?

ATTOM’s December and year-end report of foreclosure filings does the trick. ATTOM is a leading curator of real estate analytics, and its reports are the gold standard on foreclosures.

According to the December report, there were 13 filings in the Johnson City and Kingsport-Bristol metro areas. It was the second lowest new filings number in 2024. The annual number was 299 filings. It was the second lowest number in two decades.

ATTOM’s equity reports adds fuel to the foreclosure update. In fact, it pushes the stories about foreclosures and underwater mortgages to the back of the bus. It’s a boss metric because 60.2% of the region’s 52,893 mortgaged properties are equity rich. That means they have a loan to value ratio of 50% or better.

The reason local homeowners have such a fat equity piggy bank is the years of a sizzling market that followed the pandemic. In fact, the equity story goes back to 2012 after the Tri-Cities region bottomed out of the Great Recession and started what has been a historic housing market recovery. Since 2012, home prices have increased 124.6% – an increase of $147,000 per sale at the median home price.

Since 60% of the mortgage properties are equity rich, and half of the area homes are equity free, and foreclosures are at a two-decade low, the big negatives are mortgage rates and affordability.

Oh, one other thing. Although there are mortgaged properties that are underwater. But there are only 1,817 of them at the latest count. They account for 2.1% of the region’s mortgaged properties.

Under normal conditions, the level of equity rich homeowners and an increasing inventory would light the fuse on an early start to the prime home buying and selling season. Lawrence Yun, the National Association of Realtor’s chief economist, put it this way. “A seasonal pattern of longer days-on-market in winter months provides for a better negotiating power to buyers. In spring, days-on-market shortens, and more incidences of multiple offers appear. There will also be more choices of fresh inventory in the spring months but also more buyers competing over those properties.”

Consumers ended 2024 feeling a lot better about the housing market than they did a year ago, based on the hope that mortgage rates would decline through 2025 and help make it more affordable to buy a home. But that doesn’t mean they are racing to buy their next property. Since they have so much equity and over half have current mortgage rates at 4% or better the are not under much pressure to move.

“Just over one-in-five consumers believes it is a ‘good time’ to buy a home – although that share has risen over the last year, too, after reaching an all-time low of 14% in Q4 2023,” says Fannie Mae’s senior vice president and chief economist Mark Palim.

Meanwhile, the number of homes for sale in December increased by 15.9%, and the largest share of them (26.6%) are in the $300K-$399,999K price range. That was last year’s sales sweet spot. Homes in the affordable price ranges of $200K-$299,999K are up 18.8% and those in the $250K to $299,999K are up 24%.

Categories: REAL ESTATE