MARKET PULSE – New home sales up, average price down

Don Fenley 

Unlike the existing home market that’s slogging into prime season with a 17% sales increase, new construction sales are booming. So far this year sales are double what they were during the first two months of last year. And what has sold is almost $32,000 cheaper and 161 sq. ft. smaller. Another increase is more are in a PUD.


Sales – 107, up from 55 last year

Avg. sales price – $355,075, down from $386,796

Median sales price – $326,780, down from $350,000

Avg. sq. ft. – 1,961, down from 2,112

Avg. lot size – 0.3 acres

Avg. number of rooms – 7.4

Average number of bedrooms – 3.3

 Conventional loan – 46% of sales.

Cash sale – 31% of sales.

FHA loan – 14% of sales.

VA loan – 9% of sales.

At mid-month, there were 405 new construction home listings in the counties monitored by the Northeast Tennessee Association of Realtors (NETAR). That’s 28 fewer than the January total. The inventory is stable. Last month’s total was three less than the average for the past seven months.

From a median price perspective, new construction sales are in the market’s $300K-$400K sweet spot that accounted for 20% of all sales reported in last month’s NETAR Home Sales Report. And they’re priced in the middle tier of the affordable home price range that did not perform well in last month’s pending sales report. Pending sales in that range were down 11.9% from last year.

Overall pending sales in the move-up market lagged last month’s affordable market pending sales by almost 40%.

New listings in the move-up sweet spot shared by new and existing home sales range was stagnant last month and unchanged from last year’s total. However, active listings were up 3.7% and account for 255 of the region’s 1459 active listings.

This year’s new home square footage of sales is consistent with new home permits pulled in Kingsport last month. The average was 1,952, down from 2,266 last year. Average for Johnson City new permits last month was 1,785 because most were for townhomes. The average for new single-family permits was 2,301.

New home permits in the Tri-Cities region were up 32% last year, according to The Market Edge, a specialized information service that provides leads to building material suppliers, financial institutions, and governmental agencies. Last year’s total lags the region’s 2007 new home peak by 4%.

Permit pulls were down in the region’s two largest markets (Washington Co. TN and Sullivan) but up in the other five counties. The largest year-over-year gains were in SW VA counties (Scott and Washington). The largest yearly gain in NE Tenn. was in Hawkins Co.

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 1,800+ 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