News
January 27, 2019

Pent-up housing demand expected to favorably impact the local housing market

By KAREN RANDOLPH

Wow! The local housing market’s performance last year was one for the records! During a time when many housing markets were reporting lower sales and prices, the local market thrived.   While some data points to a softer market this year, there are also signs of pent-up demand in the Tri-Cities.


Karen Randolph
2019 NETAR President

Total residential resales were $104 million better than 2017, and the area's sales volume marked a third straight $1 billion-plus year. When you add single-family home sale multipliers developed for Tennessee by National Association of Realtors®'(NAR) research team, it ups the economic impact by another $304 million. This number is a ballpark estimate. Look for it to change when NAR’s updated analysis is available.

Later this year – when final data is available – the Northeast Tennessee Association of Realtors® (NETAR) will factor in the economic impact of new home construction and sales, commercial construction, and the multipliers for condo and townhome sales.  This data will provide a closer look at the state of the local real estate market. Obviously, it is going to be a bigger number than 2017.

These numbers are a big deal because they illustrate the real estate industry's role in the local economy. On a national level, real estate accounts for approximately 12% to 15% of total economic output also known as Gross Domestic Product...more about GDP in March.

Here is a snapshot of how the 2018 residential resale market stacked up.

  • Annual single-family sales finished the year at the highest level since 2008. They were up 5.7 percent from 2017.
  • The annual average sales price was $173,379, which was also the best since 2008 and a $6,923 improvement over 2016 (up 4.2 percent).
  • Condominium and townhome sales were down by 33 closings.
  • The averaged condo or townhome sales price was $127,145, up 5.3 percent. Like single-family sales, the price appreciation is the best since the Trends Report began tracking townhome and condo sales. Real estate professionals are keeping a close eye on the townhome and condo market this year. It has the potential to increase its market position since the price makes them attractive to the higher number of first-time buyers expected this year.

These increases occurred during a year when the local inventory of homes for sale was low.  The shortage kicked in supply-demand forces, and average sales prices began appreciating at a faster-than-normal pace.

Although we expect the inventory to improve as we approach this year's prime buying and selling season, given current conditions, tight inventory will be the norm this year. At the same time, expect to see mortgage rates begin creeping higher.

 You can expect to see continued reports of a slowing housing market across the nation, but that's not the projection for the Tri-Cities. Realtor.com’s market hotness index shows our area listings are receiving more attention than the national norm. This index signals demand here is stronger than it is on the national level.   One reason is our affordable housing.

Whatever challenges this year’s market throws at buyers and sellers, local Realtors® will deal with them and despite the obstacles, help their buyers and sellers find the best opportunities available. This level of professionalism and determination are your remunerating benefits as homeownership remains on the climb for 2019.

 

 

 

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