The ground shifted under Tri-Cities home sellers’ feet in July. For the second month in a row, home sales slipped, and this time price reductions surged. They were at their highest level in seven months.

Of all the homes sold last month, 37% had a price reduction before finding a buyer. That’s not the biggest share we’ve seen this year, but the size of those reductions was a record: an average cut of $30,401. That’s well above the usual $20,000-and-under range.

Sellers are clearly adjusting to slower buyer activity and the reality that mortgage rate relief isn’t arriving anytime soon.

Sixty-one percent of July’s sales closed below the listing price. On average, sellers shaved $20,862 off asking prices to get deals done.

That’s a big change from the frenzy of recent years. Buyers are now negotiating with confidence — and walking away with real savings.

This isn’t a crash — it’s a recalibration signal. The market is shifting toward balance. But a balanced market doesn’t necessarily signal a shift to a buyers’ market.

 The largest reductions were in the $180K prices range (6.6%). Reductions ranged from 4.99% to 2.85% in the $250K to $499K price range. Luxury listings in the $500K-plus price range average 1% reductions. 

The evolving market landscape is sellers need to be sharper with pricing, while buyers, especially those with strong finances, now have leverage.

While sales volume is running 5.7% behind last year, prices aren’t tumbling. The median sales price in July was $10,000 lower than in June, but still 2.15% higher than a year ago. Prices have averaged a monthly appreciation average of 0.9% so far this year.

The fall and winter market performance will hinge on mortgage rates, inventory, and buyer confidence. For now, the overheated, bidding-war market has cooled into one defined by patience, strategy, and more give-and-take between buyers and sellers.

Agents report that “the phones are not ringing as often.”

This report is based on human analysis of only local housing data from the Northeast Tennessee Association of Realtors® (NETAR) July housing report with AI assistance.