By KRISTI BAILEY
“The only thing holding back the local housing market is inventory.” Sound familiar? The issue crept into housing market reports about two years ago.
Back in 2016, when the market was first beginning to boom, there was a six-month inventory of homes for sales on the market. Sales made significant gains, and home prices posted steady increases, but listings did not increase at the same pace. Currently, there is a little less than 2.5 months of inventory. Drill down to city markets, and things are incredibly tight. All of the region’s major city markets had less two months or less of inventory last month.
But there is another way to look at inventory. Instead of focusing on what’s not on the market, let’s look at what has been selling and in what price range. According to the most recent local market analysis by Attom Data Solutions, the local affordable housing price range is $160,000 to $179.999. The median sales price last month was $179,500.
Housing affordability is dynamic. It changes from quarter to quarter. It is based on the median sales price of a home, annualized wages of workers, assumes a 3% down payment, and a 28% wage-to-debt ratio.
Out of 818 resales last month, 79 were in the price range of $160,000 to $179,999. And there were 691 active listings at or below that price range – 43% of active listings. So, there are affordable homes available even though inventory is at a record low.
Here is a quick look at the year-over-year sales increases by price range during July: $200,000-$250,000 sales up 11% to 110 from 99
- $250,000-$300,000 sales up 69.4% from the 49 to 83
- $300,000-$400,000 up 49.7% from 58 to 81
- $400,000-$499,000 up 112% and 36 sales compared to 17
- $500,000 plus price closed 35 making that a 106% increase
Looking at sold properties by the price ranges illustrates that sales are above the affordable range are trending higher.
And what about new listings?
The highest July new listing count in the price ranges just below the $200,000 level were $120-$139,000 and $160,000-$179,999. Together they accounted for 205 new listings. So, there are some affordable homes out there, but buyers need to be ready by being pre-approved and working with a REALTOR®.
NETAR is the voice for real estate in Northeast Tennessee. It’s the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,200 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.