June was a perfect storm of sorts for Tri-Cities area home sales. They posted their biggest loss so far this year. They were down a little better than 20% from May and down 20.4% from June last year.

The perfect story was the convergence of another month of mortgage rates that have stubbornly hovered just below 7%, signs that the region’s job creation machine is running out of gas and increasing frustration with high rents that combined with higher food costs are pinching family budgets. While economist see encouraging signs, the inflation rate is decreasing, people are focused on the cost of items not the growth rate.

Although the percentage was a big number, home sales are actually on track toward the 2018 pre-pandemic sales stabilization level. During the first half of this year, there have been 3,742 home sales. The pre-pandemic benchmark is 3,536.

Signs for June’s adjustment decline were a decrease in the number of multiple offers on properties in the $300 and up ranges and increasing contingencies.

All three of the submarkets had reduced sales in June.

The affordable market was down 15%.

The move-up market was down 22%

The luxury market was down by 4.3%.

Declines in the move-up and luxury markets were the big drivers of the overall sales slump. Both have been forces in driving both sales and price increases so far this year.

There were 18 fewer move-up market sales than the average for the first five months of the year and five fewer luxury sales.

Some market watchers have gone so far as to say the market has shifted to a buyers’ market – especially in the Johnson City market. Buyers have gained more bargaining muscle, but it’s a little early to link that kind of proclamation to June’s sales slump. What is going unsaid is last month’s lower sales are allowing a buildup in inventory that will give buyers more choices in the late summer and fall markets.

Sellers reduced their initial asking price on 26% of the homes sold in June by an average of a little over $30,000.

Buyers gained an average of $17,599 in concessions during negotiations in 56% of the homes sold last month.