By DON FENLEY

The Tri-Cities regional housing market is turning the corner on inventory restoration, but it hasn’t resulted in strong demand for lower prices.

At mid-January, the region was at – or very near – balanced market conditions in the $300K to $799,999K price tiers. Conditions vary by price and by submarket region, but the most robust levels are in the $200K to $399,999K. Homes in this price range also account for 53% of the region’s sales.

A slower than normal sales pace for the first couple months of the new year should help accelerate market activity for the Spring prime house buying and selling season.

The TCI Group Annualized Home Sales Tracker shows the slow decline continued through mid-Jan. when the monthly sales rate was down a little over three sales a month. Since the tracker looks at the market on a 12-month track, change is slower than the annual and monthly sales metrics.

The Northeast Tennessee Association of Realtors (NETAR) December Pending Sales Report shows 71 days as the median time on market. That’s the time a property is on the market from the time it enters the local Multiple Listing Service until it’s removed. Another view of the all-important time on market metric comes from Realtors Property Resource (RPR). Here’s the average days on market for the region’s primary submarkets, according to RPR:

Bristol, TN – 26 days.

Bristol, VA – 41 days.

Greeneville region – 30 days.

Johnson City region – 21 days.

Kingsport region – 23 days.

Despite increasing levels, the Tri-Cities overall inventory that has remained stubbornly low is one of the opposing forces that’s buoying home prices. Combined with the gulf between consumer expectations for lower mortgage rates and the where the industry is keeping rates, local prices are tracking with the 2024 annual average of just under 5%.

One opposing view on that trend comes from Moody’s. While its slightly bullish on the region it is projecting prices will decline.

Its outlook for the Dec.-Dec. prices is a a 1.8% decrease, while the Johnson City metro forecast is for a 2% decline. Here’s how Moody’s chief economist Mark Zandi explains the outlook:

“We expect homes for sale to steadily increase as more existing homeowners need to sell for demographic reasons—death, divorce, children, job change—and lower mortgage rates help ease their interest rate lock. The [potentially] lower rates will also support housing demand, but the increase in housing supply will be even more significant, weighing on house price gains,”

Zillow’s early Dec-Dec. outlook offers an opposing view. It projects a 4.5% increase in the Kingsport-Bristol metro area and a 5.6% increase in the Johnson City metro area.

Since the Tri-Cities is not one of the markets where inventory has reached pre-pandemic levels, it is experiencing stronger price growth than the markets where inventory has returned to pre-pandemic levels. Currently, the local market would need 1,500 to 2,000 additional listings to be at the pre-pandemic level.

Categories: REAL ESTATE