Local Condo Market Continues Strong Performance
The regional condominium/townhome market mirrors much of the existing home resales but with at least one notable exception.
Listings are spending much less time on the market than single-family homes. Last month it was 24 days, 10 days fewer than last year. The median days on market for single-family resales was 49 days. That’s two days more than April last year.
Using time on the market as an indicator of demand points to a strong consumer preference for townhomes and or condos. What’s moving that demand is a frothy question.
Price and affordability are obvious options. Sales lag last year’s totals, but that appears to be more of an inventory issue than demand.
April’s median condo sales price was $160,000. That’s less than the single-family median of $220,000. Condo sellers also saw a higher year-over-year sales price growth, and there was very little discounting from the listing price. April’s median single-family sales price was discounted 14% from the median list price.
The condo median sales price increase from last year is up 21% compared to a 13.7% increase for single-family resales.
So far this year, the condo/townhome market is outperforming the single-family market, but they are still not as popular with local buyers. But they have become more popular in the build-to-rent segment. And since many are permitted as individual units, they can be converted to sales instead of rentals if the market changes.
Current rents are increasing faster than wages and, in some cases, faster than home prices. The apartment sector is expected to continue growing for now, but there are signs of weakness in the single-family and condo rental market.
According to the National Association of Realtors (NAR), the effective first quarter rent per apartment in the Kingsport-Bristol metro area was $872 a month. It was $837 a month in the Johnson City metro area. That’s the effective overall rent. The asking rent for some of the Class B and C apartments in Kingsport is now $1,000 a month.
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