August 26, 2018

Where are the local hot markets? It's a question with multiple answers


One of the most frequent questions real estate professional hear these days is, "Where are the market hot spots?"

Aaron Taylor
2018 NTAR President

Although it may sound like I'm hedging, the truth of the matter is there are multiple answers to that question. Are we talking about total sales, growth rates, the point of sale, price appreciation, days on the market, the community or neighborhood where the most multiple offers show up?

Here's the big picture. Our entire region is a hot spot. During the first quarter of this year, the three existing home sales markets in East Tennessee with the best growth rates were the Morristown Metropolitian Statistical Area (MSA), followed by the Johnson City MSA then Kingspot-Bristol (MSA). While Chattanooga and Knoxville had more sales, they didn't have the highest growth rate when Q1 sales were compared to the same period last year. And conditions haven't changed much since then. Locally second quarter sales were better than the first three months of the year and the rest of the state.

But what about local hot spots?

Each month there is a listing of the city and county markets year-to-year and year-to-date sales and average prices and a market share listing. It can be found on the Northeast Tennessee Association of Realtors® web site on the Market Pulse and Share page .

If you define a hot spot as the best current month's year-to-year sales and average price growth rates compared to the same month of the previous year, Greeneville leads the region with a 33.3 percent increase in sales from July last year. When it comes to price appreciation from July last year, Johnson City is the leader. Actually, it was the only city market with a year-to-year average price increase.

But if you're looking at trends, the year-to-date data for Greeneville is the standout for the first seven months of this year. And it's only one-tenth of a point better than Kingspot.

When it comes to average sales price year-to-date trend, Bristol VA has the best growth rate, followed by Bristol TN. 

If market share is the defining hot spot factor, Kingspot is the region's city market leader. It’s the only city market where the monthly year-to-date sales market share has consistently been higher than the annual market share benchmark for last year.

And then there's the option of total sales as the best hot spot measure. Locally that means Johnson City and Kingspot will always be the leaders. So far this year, Johnson City leads Kingspot by 33 closings.

These numbers are current for city markets. Check out the listings on NETAR's web page and you'll see some differences on what's hot and what's not on the county market level.

Although it's not part of NETAR's monthly Trends Report, the same variety of sales and price examples cited for the city markets can be made for neighborhoods within a city market. It's an illustration of the hyper-local reality of real estate. And it's also why buyers and sellers shouldn't put too much faith in what they read or see in national media reports about home sales and prices. For example, the June national median home price was $258,000. In Northeast Tennessee's most expensive city market – Johnson City – it was $231,057. In Kingspot, it was $183,159. The year-to-year sales growth rate in both cities is also higher than the national or state sales rate.

The best thing buyers and sellers can do when they're studying what markets are hot and which is the hottest is consult a professional. That professional is their Realtor®. He or she has the experience, access to public and private data bases and the local street smarts to come up with answers that precisely and accurately fit both the market and what their clients are looking for.

Remember the old real estate axiom that the three most important things in real estate are location, location, and location?

Well, the three most important things in real estate market information is local, local and local.

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 over 90 affiliates.