Summary
New home sales in the Tri-Cities fell in July from a year earlier. Prices rose anyway. The market got smaller, more expensive, and more concentrated in a few cities. Sellers cut their asking prices more deeply than last year yet gave up less at the closing table.
Step back and July looks less like a slump than a reset. The market moved fewer homes. The ones it moved were bigger, pricier, and clustered in fewer towns. Sellers set their sights high and corrected fast. Buyers paid up but exercised purchase power muscle. A year of that would reshape where the region’s next new neighborhoods rise.
By DON FENLEY
The Tri-Cities new home market sent a mixed signal in July. Fewer people bought. The ones who did paid more. Buyers closed on 56 new homes, according to the Northeast Tennessee Association of Realtors® (NETAR). That’s down 17.6% from the 68 July last year. At the same time, the median price rose 3.8% to $365,588, and the average climbed 3.9% to $403,651.
Fewer sales and higher prices can look like a contradiction. Usually it is not. When the homes that sell lean toward pricier addresses, or builders bring fewer but larger houses to market, the averages rise even as the count falls. That’s close to what happened this July.
Two numbers, two jobs
The home price is really two numbers, and they do different work. The median is the midpoint. Half of July’s new homes sold for more than $365,588 and half sold for less. The average, $403,651, is higher because a small number of expensive homes pull it up. When both rise, as they did this July, the whole market moved up, not just the top end.
Where the buyers went
Blountville led the region with 13 new home sales. Johnson City followed with 11, Jonesborough with eight, and Kingsport with seven. A year earlier, the order was nearly reversed. Johnson City had 22 sales, more than any city posted this July. Its count then fell by half. Sullivan County, home to both Blountville and Kingsport, picked up much of the slack.
Only cities with five or more sales are ranked here. Smaller markets are left out because a single sale can swing their share wildly from one month to the next.
Deeper cuts, smaller haggles
Here the July market gets interesting. Sellers cut their prices more deeply this year. At the same time, buyers pried out smaller final discounts. Those two facts sound opposed. Read together, they describe a market learning to price itself.
Twenty-four of the 56 homes sold last month had a price cut. That matched the number of a year earlier, but out of a smaller pool. The average cut grew to $19,012, up from $15,523.
Now the discount at the table. Thirty-four of the 56 homes closed below their last asking price. The average gap was $5,520. A year earlier, 32 of 68 homes sold below list, and the gap was wider at $7,717.
Bigger homes, higher price per foot
The homes sold last month grew a little. The average home measured 1,989 square feet of finished space, up from 1,930 a year earlier. Price per square foot is the great equalizer. It strips out size and lets you compare a small house to a big one on even terms. By that measure, new homes cost $207.38 a foot this July, up from $203.12. Buyers paid more per foot and bought more feet. Both lifted the final price.
HOAs come standard
One feature that came standard for most buyers last month was a homeowner’s association. Thirty-seven of the 56 new homes were part of a HOA. The average fee was $337. A year earlier, 50 of 68 new homes were in an HOA, at a nearly identical $335. In new construction, the HOA is less an option than a fact of the neighborhood.