Last year, conventional loans dominated home sales in the seven NE Tenn. Tri-Cities counties. But they didn’t have the highest average sales price. That status went to Veteran Administration (VA) loans. And although cash sales account for about a third of sales, their market share continues declining. 

The seven-county region saw 8,088 existing home sales last year. They had a sales volume of a little over $2 billion. The average sales price was $248,907, and the median sales price was $209,000.

In markets like the one we’ve seen for the past several years, it’s important to look at both sales prices. The average is a good description of overall sales. But it has been skewed by high-end or luxury home sales. The median sales price is a better indication of property values because it is less affected by outliers that skew public market perceptions. It identifies the middle of the market. In other words, half of the sales were for more than the median price, and half were for less.  

Another important benchmark is the average difference between the list and sales price. Last year it was $2,455, and sellers who accepted Tenn. Housing Development Agency (THDA) loans had the highest average increase over list price.  

Here’s how some of the core data looks for each of the major financing methods. 

CONVENTIONAL LOANS 

Share of all sales – 51% 

Avg. sales price – $275,686 

Median sales price – $235,000 

 Avg. difference sales to list price – $2,320 below list 

CASH SALES 

Share of all sales – 28% 

Avg. sales price – $222,486 

Median sales price – $171,000 

Avg. difference sales to list price – $4,755 below list 

FEDERAL HOUSING ADMINISTRATION 

Share of all sales – 8% 

Avg. sales price – $185,748 

Median sales price – $172,950 

Avg. difference sales to list price – $1,346 above list 

VETERANS ADMINISTRATION 

Share of all sales – 8% 

Avg. sales price – $287,715 

Median sales price – $255,000 

Avg. difference sales to list price – $1,141 below list 

US DEPT. OF AGRICULTURE 

Share of all sales – 3% 

Avg. sales price – $168,195 

Median sales price – $160,000 

Avg. difference sales to list price – $1,045 above list 

TENN HOUSING DEVELOPMENT AGENCY 

Share of all sales – 1% 

Avg. sales price – $140,871 

Median sales price – $133,500 

Avg. difference sales to list price – $1,538 above list 

Both the number and sale price for local VA loan sales contrast some of the misconceptions about them. Sellers wary of VA-backed loans are turning away from a sizeable and growing segment of the local population. According to state and VA reports, close to half of all Tennesseans eligible for VA benefits live in the First Congressional District, which includes the Tri-Cities.  

The most current count shows veterans account for a little more than 10% of the Tri-Cities population. That’s a little over 51,000 people. If they were all in one town, its population would be about 4,000 less than the population of Kingsport.

The area has and continues to be a vet destination due to the low cost of living, a welcoming and accommodating business, health care, and education area. 

Last year’s increases in prices pushed down the share of cash sales, but they still account for the second-largest number of home sales. The 28% share will adjust higher later this month when the count for all local sales is available. The share cited in this report is from the local Multiple Listing Service (MLS), which accounts for about 75% of existing-home sales.  

Local cash sales peaked in 2014 when their market share was 40.7% of Johnson City metro area sales and 41.1% of Kingsport-Bristol metro area sales. 

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 1,500 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.