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Kingsport-Bristol home sales price post another gain; magazine ranks Johnson City as real estate safe haven

NET News Service • Nov 26, 2008 at 12:00 AM

Two recent pieces of real estate news may not fit the national profile, and they don’t mean the area’s housing industry is on easy street, but the reports from Kiplinger’s magazine and a national agency suggest the Tri-Cities market remains somewhat protected from the problems plaguing many areas of the country.

On Saturday, Kiplinger’s, a national financial monthly, tabbed the Johnson City metro area (Washington, Carter and Unicoi counties) as one of six “Safe Havens in Real Estate.”

And Tuesday — the same day the large metro-related “Case-Shiller Index” showed continued plunging prices in its markets, another index showed the Kingsport-Bristol metro ranking 14th best out of 291 areas nationwide for year-to-year home price appreciation through Sept. 30 at 3.93 percent.

Nationwide, the figures released by the Office of Federal Housing Enterprise Oversight showed, prices declined by 6 percent over the same period.

One local economist took heart from both pieces of news.

“I think it’s just one more piece of evidence that the economy in this area is stronger than we sometimes give it credit for being,” said Bill Greer, an economics professor who is also Milligan College’s vice president for institutional advancement.

“That is not to say it is strong or perfect by any means, but I do think we continue to enjoy a degree of insulation from the national economy.”

Kingsport-Bristol’s 14th-place showing was identical to the second quarter placement, though year-to-year appreciation was down from 4.75 percent.

Johnson City’s latest figure, shown in an index of unranked metros, was 3.63 percent, which would place it 18th, and was an improvement from the second quarter gain of 2.86 percent that would have put it 58th.

The OFHEO report also showed data for the July-September quarter compared to the quarter before, and Kingsport-Bristol remained above water in that regard with a 0.69 percent appreciation. Six of the top 20 year-to-year markets lost value in the third quarter compared to the April-June quarter.

The Kiplinger’s article used data from Fiserv Lending Solutions, a home-price research company, to determine that “in certain pockets across the country, the damage has been minimal.”

The article lumped Johnson City in with Lancaster, Pa., Clarksville, Pittsburgh, Albuquerque and Burlington, Vt., among cities whose “local economies have kept unemployment and foreclosure rates below average.”

That piece also noted that the cities making the list measured well on the “affordability index” that measures home prices versus family income.

Greer said getting positive press from Kiplinger’s “can’t hurt” and could put the area on the radar screens of some of those “halfbacks” the article mentioned.

“I think people put a lot of credibility in it. To the extent that they’re looking for a safe haven, as Kiplinger described this area, I think it could have an impact on their relocation decisions and that sort of thing.

“Whether it means 1,000 more people move to the area, we’ll have to wait and see, but to compare essentially a flat market here to a 17 percent drop (reported by Case-Shiller) — I’ll take it.”

Kiplinger’s lists Johnson City’s median home price at $120,000, lowest of the cities shown, but it also puts the 12-month change in home value at negative 0.4 percent (the Kiplinger’s study used a different set of data from the OFHEO numbers). The other metros all had modest gains. It notes the Johnson City market is driven by East Tennessee State University and new retirees — the so-called “halfbacks” who “used to spend summer in the north and winter in the south but are now making Tennessee their home year round.”

In the OFHEO release, Tennessee also made out well as a state. It saw annual appreciation of 1.38 percent, ranking 11th, though prices showed a drop of 0.68 percent from the second quarter to the third.

Several other “Mountain South” metros also placed high on the OFHEO annual appreciation list. They included Greenville, S.C. (ninth), Spartanburg, S.C. (11th), Hickory-Lenoir-Morganton, N.C. (17th) and Asheville, N.C. (43rd).

The OFHEO numbers come from sales of existing homes and refinances. They are limited to transactions on single-family properties involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.

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