GRAY, Tenn. – Tri-Cities sellers are getting an average of $11,000 more per townhome/condo sale in NETAR’s primary service area while the number of sales is down 26% from August last year. The sales decline is more of an inventory issue than a lack of product popularity. 

So far this year 277 condo sales have closed. The typical sales price is $162,500. The average time on the market was 46 days. That’s almost 10 days better than the single-family time on the market.  

Demand for townhomes and condos has increased with the rising cost of single-family homes and higher mortgage rates. Builders are increasing the output of townhomes and condos, but some of those are being redirected to the build-to-rent status to cash in on the surging demand and rent hikes.  Builders are being advised to shift their marketing toward renters and focus on converting the 25% of current homeowners who would rather rent than own and those renters who don’t like apartment living.  

Townhomes rentals is the apartment community’s top competition because a growing number of renters have some wants apartments don’t offer. They want their own small backyard. They don’t want someone living above or below them. Townhome and single-family rentals also tend to be more pet-friendly than apartments.  

Currently, the vacancy rate for the Tri-Cities’ 6,500 apartments is 3.3%. The only other East Tennessee metro area with a lower vacancy rate is Knoxville.  

The overall vacancy rate for the region’s 65,983 single-family and townhome rentals is 2.6%. It’s higher in the less desirable locations and lower in others. Some zip codes in Attom Data Solutions’ current vacancy report have no single-family rental vacancies.  

 Cash sales in the condo market have increased from 45% during the first eight months of last year to 51% this year. Half of those cash buyers are paying an average of $1,800 above the list price this year. This time last year they were getting a typical deal $700 below the list price.