Flip sales lessened inventory shortage pain
GRAY, Tenn. – Investors who flip homes have shouldered an increasing role in the NE Tenn. market since 2018 when demand for existing homes pushed inventory below balanced conditions. That role hit a new benchmark in 2022 with an all-time high of 749 sales.
Last year’s flip sales accounted for 8.9 percent of all Johnson City metro area existing home sales and 9.3 percent of Kingsport-Bristol sales, according to property data provider ATTOM’s annual Flipping Report. Those sales were a welcome boost during an era when the market has been stuck with than two months of inventory.
It was also a welcome relief to first-time and affordable buyers because the average flip sales price was squarely in the affordable zone. It didn’t solve all the woes of the inventory shortage, but it lessened some of the pain.
The average in the Johnson City metro area was $220,000. The overall average for that area was $302,159, and the median was $257,500. In other words, the average flip sales price was below the middle of the market’s price point.
Kingsport-Bristol’s annual flip price was $182,000. The average was $243,330, and the median was $215,000. Again, the average flip sales price was below the market’s middle point.
Simple flips that only required simple rehab, like fresh paint, cabinets, and new appliances, have long been a staple for local investors. The more intensive projects softened when material costs skyrocketed and supply chain issues made getting supplies as big a factor as labor cost.
While materials are still expensive and the supply chain is iffy, demand is keeping investors in the game. But they’re looking at a slowdown, according to national outlooks. Inflation is taking a toll on both the do-it-yourself and pro projects. Higher prices have also pushed owners who have or are choosing pro projects to opt for lower-quality finishings to stay on budget.
ATTOM’s flip data is based on sales deeds. A single-family or condo flip was any arms-length transaction that occurred in the quarter where previous arms-length sales on the same property had occurred within the last 12 months.
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 1,600+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us