May 13, 2018

Local Listing Price Comparison Shows No Sign Of A Slowing Market

Aaron Taylor
2018 NETAR President


A recent article by MarketWatch gained widespread attention earlier this month when it examined existing home listing prices in 10 metro areas. Prices were flat compared to last year, and the article's headlined asked if the housing boom is finally cooling? If you closely read the story, you'll get a quick schooling on how different trajectories for home values and list prices demonstrate how instrumental local economies are in guiding housing markets. But the headline "is the housing boom finally cooling?" is what got most of the attention. The fact that more people read headlines than the story is a fact of life in the information business.

The article had no bearing on the local markets monitored by the Northeast Tennessee Association of Realtors®.  If fact if you compare April's median listing prices in the primary local city markets with April last year you'll find no signs of a stagnating market.  And if sales are the measure, there are no short-term warning signs. The long-term trend does show the growth rate is ebbing. That's more an issue of inventory than anything else, but unless something dramatic suddenly pops up, there's little likely hood that the brakes are about to be abruptly applied.

Here's how an Arpril to April price comparison looks according to Realtor Property Recourse (RPR). The listing prices are rounded, and the median is the price where half of the listings are higher, and half are lower:

Johnson City - $285,000 up 24%.

Bristol Tennessee - $190,000 up 23%.

Greeneville - $215,000 up 23%.

Elizabethton - $168,000 up 18%.

Bristol Virginia - $147,000 up 9%.

Erwin's -  $160,000 up 7%.

Kingsport - $195,000 up 5%.

So why are local listing prices so different from the cooling off in MarketWatch's comparison of 10 of the nation's larger markets?

The answer is simple.

Remember the real estate mantra that all real estate is location, location, location?

Well, when it comes to trying to keep your fingers on the pulse of a real estate market, the mantra is: the only information that counts is local, local, local.

While it may be informative to monitor market news on a national  if you're an investor looking at housing market funds, it won't give you local insight.  That's because real estate markets are what we call hyper local. How fast properties sell, what buyers are looking for and what sellers are willing to take varies from neighborhood to neighborhood, from city to city and sometimes from month to month. There is no algorhythm that can deliver a cookie cutter formula for a successful transaction or the value of an individual property for that matter.

 And even when you look closely at the primary economic drivers of housing demand, you'll find more puzzles to solve.

For example: Although Johnson City had the biggest increase in median listing prices in our comparison Kingsport is the only city market that has consistently increased its market share of sales this year. It also has the best 12-month change in estimated home values even though job and wage growth has been stronger in the Johnson City metro area.

Myriad issues effect decisions about buying or selling a home because how a family feels about their future is the bottom line. That’s why it’s critical to marshal the most precise local housing market information available before making a real estate decision. That kind of information can’t be found in mainstream media reports or by listening to the pundits. The primary sources for this key data are local Realtors® who do the competitive market analysis for their clients and NETAR's monthly market watch reports. Together they are the voice of real estate in the Tri-Cities – a voice you can trust for quality and detailed information market information instead of generalized national market reports.

Aaron Taylor is the 2018 president of the Northeast Tennessee Association of Realtors. The real estate education and trade group is the voice for real estate in the Tri-Cities and has over 1,200 local Realtor® members and almost 100 affiliates