News
February 15, 2018

Housing market makes strong start amid tight inventory, higher mortgage rates

Northeast Tennessee's housing market began 2018 with a double-digit increase in average resale prices and an 8.5% sales increase.

Northeast Tennessee Association of Realtors (NETAR) President Aaron Taylor credited January's market increases to a higher interest rates on the horizon and continued strong demand in the 11-county region monitored by NETAR's Trends Report. "Changing interest rates always move the market and the end of last week marked the fifth straight week the 30-year fixed-rate mortgage rate increased." Rates have reached their highest level since December 2016, and all indicators point to more increases, he added. "Buyers who had been holding back are now more motivated than they were during the fourth quarter of last year."

We have seen new inventory coming onto the market since December, but overall things are still tight. "In January the active inventory was 16 percent below what it was this time last year, and we had five months of inventory," he added. That's the number of months it would take to exhaust active listing at January's sales rate. The area market had had less than six months of inventory since April last year. Six months is considered normal real estate market conditions.

According to NETAR's January Trends Report, there were 394 closing on single-family resales, 31 more than January last year. The average sales price was $170,245. "That's a $17,551 improvement over January last year," Taylor said.

Closings on condominium and townhomes were down from their accelerated pace during the last quarter, but still an improvement over last year. The Trends Report listed 27 closing, up three from last year, and the average sales price was $124,907, down $2,535 from January last year.

Taylor said rising mortgage rates and strong demand are setting the stage for busy peak buying and selling season. "The market will probably be more competitive than last year."

The average single-family home sale that closed in January was on the market for 133 days. The average for a condo or townhome was 153 days. "Those are the averages, but competitively priced homes are selling much faster," Taylor said.

Here's a capsule look at how the January city and county single-family resales and average prices looked compared to January 2016.

CITY MARKETS:

Johnson City: Sales, 48, up 11. Avg. price - $176,069, down $16,149.

Kingsport: Sales 43, down 4. Avg. price - $164,870, down $2,896.

Bristol, TN: Sales 24, up 10. Avg. price - $197,567, up $79,067.

Erwin/Unicoi: Sales 14, down 5. Avg. price - $120,500, up $25,732.

Greeneville: Sales 10, down 3. Avg. price $130,690, up $3,212.

Bristol, VA: Sales 9, up 5. Avg. price - $90,000, down $22,230.

COUNTY MARKETS:

Sullivan: Sales 124, up 12. Avg. price - $177,771, up $20,284.

Washington, TN: Sales 108, up 26. Avg. price $192,903, up $12,451.

Carter: Sales 32, up 3. Avg. price $151,262, up $8,772.

Greene: Sales 31, down 15. Avg. price $128,694, down $9,303.

Washington, VA: Sales 27, down 5. Avg. price $159,966, down $7,223.

Hawkins: Sales 27, same as last year. Avg. price $151,785, up $36,738.

Wise: Sales 16, up 5. Avg. price $133,422, up $1,710.

Johnson: Sales 10, up 9. Avg. price $284,930, up $184,930.

Scott: Sales 8, up 2. Avg. price $91,255, down $80,025.

Lee: Sales 2, down 1. Avg. price $77,000, up $25,988.

NETAR counts city sales as those in the high school zone. City sales and price data are included in the county totals.

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