Affordable homes still an active part of this hot market
Reports about high prices and the lack of inventory shutting first-time buyers and those looking for affordable homes out of the market are common these days. There’s another side to that story that hasn’t gotten as much attention.
There are homes in what’s often described as the affordable zone for sale. Of course, the affordable zone can range widely from one family, or individual, to another because there’re lots of moving parts to consider. Things like total income, down payments, debt-to-income ratios, credit ratings – the stuff lenders consider. But $140,000 to $200,000 is typically the price range most often mentioned.
A drill-down on local market data from the Northeast Tennessee Association of REALTORS® (NETAR) Home Sales Report shows there were more sales in the $140,000 to $199,999 price range during April than there were last year – 181 closings, up from 158 last year. By mid-month there were 10 more closing in that range, and they accounted for almost 23 percent of all the sales for the month.
A supply-side check shows what you could have predicted. There were not as many active listings for homes in that price range. However, the share of total listings for both periods is about the same – 17.1 percent this year and 17.5 percent last year.
This year’s key difference is buyers simply can’t sit on the sidelines and decide what they want to do like they could in years past. Today’s market is fast paced. And the competition is more aggressive. Multiple offers are common. And it’s not unheard of to see a property sell for a higher price than the listing price. It’s part of the local housing market story, but just the part that creates headlines.
NETAR’s mid-month market update graphic – it can be found on the rotating graphics at www.netar.us – shows that the all-sales average listing price is $4,052 less than it was on May 3. The average sales price is down $1,136.
There are also more active listings. And there was a slight increase of new listings in the $140,000 to $199,999 price range. The gains are not enough to take the bite out of the inventory crunch, but it’s enough to keep the pinch from being harder.
When the May Home Sales Report comes out early next month, the headlines will probably continue focusing on the tight inventory keeping the upward pressure on prices. Those are the conditions that prevail. Meanwhile, savvy buyers will huddle with their Realtor®, refine their strategy, and their agents will continue watching new listings and working their networks to get a feel for what may be on the horizon.
It’s a competitive market, but it’s not an impossible market for those shopping in the affordability zones. Yes, some first-timers may be temporarily shut out of the market until their agent finds the right deal or when they marshal more resource, but it’s not an impossible market. The closings affirm that.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee – Southwest Virginia region representing over 1,400 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. Pending sales, Trends Reports, and the regional market analytics can be found on the NETAR websites at https://netar.us/voice-real-estate-northeast-tennessee.