April 21, 2019

Tight inventory bifurcates local housing market that’s still slowly growing


Trying to explain the local housing market is tricky these days because we’re seeing conditions that even some of most senior real estate professionals have never seen before.

Karen Randolph
2019 NETAR President

For instance, consider the housing market’s version of March Madness.  Home sales were down compared to March last year.  But just because March sales were down, it doesn’t mean the market is tanking. March was the end of the first quarter and this year’s Q1 sales were the best they’ve been in a decade. It was a small quarterly increase compared to the past three years, but it will still a record.

Prices also increased. In fact, March’s single-family average price of $180,663 was a 10-year high. That’s a solid growth picture. But since most attention is on monthly numbers the more significant quarterly trend story gets muddled.

Some of this down-but-up data comes from the fact that we’re seeing a gradual slowing sales trend. Simply put, sales are still increasing, but the growth rate is slowing.  

So, what’s the buyer or seller who’s not tuned into wonky market analytics supposed to do?

Look at it this way.

Since consumer confidence is high, the labor market is adding jobs and mortgage rates have settled into an accommodating level inventory has become a key metric. Here’s what that looked like at the beginning of this month.

Listings in the $200,000 and below price range were down across the region. Greeneville was the exception. It had one more listing than April last year. This is a big deal because that price range accounts for 70 percent of all existing home sales in our area so competition for those 1,400 or so listings in high.

The Inventory situation in the $200,000 to $399,999 price range is also below last year’s stock. At the current sales pace, there are six months of inventory for the 800 or so homes in this price range, which accounted for 27 percent of all existing home sales in the 12 months ending in April.

If you’re in the $400,000 to $599,999 price range inventory is up in the Bristol TN/VA area. There are three more listing than last year. Other markets have fewer listings and given current conditions that represents 12 months of inventory for the 200 listings in this price range.

The $600,000 to $799,000 price range has more listings in Bristol TN/VA and Greeneville areas. It’s also the only price range where net inventory is up across the region. This price range accounts for about 1 percent of the region’s sales and the 83 listings represent 23 months of inventory.

At the top of the market -$800,000 to $1 million plus - there are 68 listings – four fewer than last year. Kingsport has one listing than last year driving the regional total to 68. That’s 45 months of inventory for top of the market homes.

Overall buyers have a little over 2,500 listing options.  But the market is bifurcated. There’s high demand in the $200,000 and below price range.  The $200,000 to $399,999 price range has six months of inventory which is typically seen as normal market conditions. Demand is high, but not as strong as it is for homes at or under March’s median listing price of $199,900.

Look for a busy and competitive market – one that will continue to see overall sales at or just below what they were last year and moderate sales price increases.  It’s the kind of a market where having a professional Realtor® who has his or her fingers on the market’s pulse a plus for buyers and sellers maneuvering for the best the market has to offer.