Townhome sales down, trend remains strong
Townhome sales declined for the second month in July, but when compared to the rest of the residential sales market, their track record and trend line look strong.
July’s overall residential sales were down 16.2% last month and the $269,900 median sales price was up 10.2% from last year. Townhome/Condo sales dropped to 32 – two more than July last year, while the median sales price of $209,500 was up 19.7%, according to the Northeast Tennessee Association of Realtors (NETAR).
Sellers discounted their listings price for both conventional townhome/condo loans and cash sales.
The average convention loan sale was $211,000 after a $2,774 discount.
The average cash sales sale was $205,000 after a $2,946 discount.
Townhome sales are expected to get some extra attention since the latest mortgage rate increase. The average rate on a 30-year, fixed-rate home loan climbed to 7.09% this week. That’s the highest level in more than two decades, making homeownership even less affordable.
The Atlanta Federal Reserve Bank’s Home Affordability Tracker shows monthly mortgages in all the of counties NETAR monitors have increased by hundreds of dollars from last year. The most current mortgage payment and percentage of the owner’s income consumed by housing costs for the region is:
- Greene Co. – $1,073 – 25.2%
- Carter Co. – $1,393 – 33%
- Unicoi Co. – $1,516 – 35%
- Sullivan Co. – $1,546 – 36%
- Hawkins Co. – $1,559 – 33.5%
- Washington Co. – $1,857 – 37%
Those average mortgage payments are based on the loan’s principal, interest, taxes, insurance, and private mortgage insurance. The recommended percentage of income spent on housing is an affordability measure. The baseline percentage is 28%. Anything above that is considered stressed.
Analysts think short-term rates will remain lofty, but begin gradually cool but the end of the year.
The number of new building permits for townhomes has been increasing in the Tri-Cities region. Several of the new developments have been bought by investors as rental investments. That trend accelerated last year when the National Association of Home Builders recommend that builders look at build-to-rent trend to meet a niche demand from apartment dwellers who wanted a change.
There are 28 active listing for new construction townhomes in the region that range in price from $230,000 to $499,000. When the new construction filter is removed the total of new and existing townhomes, the listings total increased to 45.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,600+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us