By DON FENLEY

The Tri-Cities is at the peak of the spring housing market, and despite what you may have read the market isn’t being driven by home values posting their biggest drop in nearly a decade.

May’s local $298,085 median sales price is at an eight-month high. It’s 4.3% higher than May last year. Year-to-date prices are up 3.3% from the first five months of last year. For some, that begs the question: Are Tri-Cities homes overpriced? The data says no. Here’s why.

Here’s what an overpriced market looks like. Homes sit unsold for months, most sellers slash their asking prices to find a buyer, and unsold listings pile up. The Tri-Cities is doing the opposite on all three counts.

Homes are selling faster. In January, the median time on market was 94 days. By May, that was down to 62 days.

Back in January, 57% of homes that sold did so after a price reduction. By May, only 36% did.

And there’s no inventory glut. The region’s months of inventory have been held just under four months all year. Inventory has increased, by there simply isn’t enough of it sitting around to drag prices down.

The big picture is the market is firm, but it isn’t a frenzy. Homes are selling quickly, relatively close to the asking price, and with little excess supply. That’s demand catching up with prices.

That doesn’t mean buyers haven’t enjoyed some additional negotiating muscle. About two-thirds of sales still close with the seller giving up about $18,000 toward the buyer’s costs. And there was a price reduction on 35% of the homes that sold in May. That’s the lowest share this year. And the average $30,561 cut is well within the range of what sellers have been doing since January.

The takeaway is the Tri-Cities market has found its footing for a busy spring peak market that is increasingly driven by refinancing instead of home purchases. The early sales count is seven sales shy of where it was last year. The total will probably increase by mid-month when most of the late closings are added to the tally.

Categories: REAL ESTATE