VA loans backed Tri-Cities highest avg. home sales price last year
Jan Stapleton - 2023 NETAR President
Conventional loans dominated existing home sales in the core seven NE Tenn. Tri-Cities counties serviced by the Northeast Tennessee Association of Realtors© (NETAR) last year. But they didn’t have the highest average sales price. That distinction went to Veteran Administration loans. And of the 600 sales financed by VA loans last year, two had a sales price of over $1 million.
The seven-county region saw 7,300 sales last year. They had a sales volume of a little over $2 billion. The average sales price was $282,801, and the median was $240,000. 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 an overall price point for all sales. But it can – and has been skewed by sales in our market’s upper or luxury-priced homes. The median sales price is a better tracker of property values because it is less affected by outliers that skew public market perceptions. It identifies the middle of the market. Half of the sales were for more than the median price, and half were for less. It also shows how the market’s value has appreciated. Last year’s price was a 53% increase from the pre-pandemic market.
Sellers who came off their listing price last year OK’d an average discount of $2,297. Sellers who accepted USDA loans had the higher average increase over the list price ($1,522).
Here’s how that data looks for each major financing method.
Share of all sales – 49.6%
Avg. sales price – $319,528
Median sales price – $265,000
Avg. difference sales to list price – down $2,064
Share of all sales – 31.6%
Avg. sales price – $257,658
Median sales price – $200,675
Avg. difference sales to list price – $3,682 below list
FEDERAL HOUSING ADMINISTRATION
Share of all sales – 8%
Avg. sales price – $211,841
Median sales price – $195,000
Avg. difference sales to list price – $1,274 above list
Share of all sales – 8%
Avg. sales price – $313,468
Median sales price – $287,750
Avg. difference sales to list price – $2,893 below list
US DEPT. OF AGRICULTURE
Share of all sales – 2%
Avg. sales price – $181,890
Median sales price – $174,900
Avg. difference sales to list price – $1,522 above list
TN HOUSING DEVELOPMENT AGENCY
Share of all sales – 0.04%
Avg. sales price – $165,000
Median sales price – $165,000
Avg. difference sales to list price – $1,455 above list
Both the number and sale price for the local VA loan sales contrasts some of the misinformation 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 here in the First Congressional District.
The most current count shows veterans account for a little more than 9% of the Tri-City’s population. That’s about 40,000 people. If they were all in one town, its population would be nearly the size of Bristol, Tenn., and Bristol, Va. 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.
Increases in prices pushed down the share of cash sales, but they still account for the second-largest number of home sales. The share cited in this report is from the local Multiple Listing Service, which accounts for about 75% of existing-home sales.
Local cash sales peaked in 2014 when they accounted for 40.7% of sales in the three-county Johnson City metro area and 41.1% in the four-county 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 1,800+ 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