Year to date, the total number of homes sold in Northeast Tennessee is up 8.6 percent (to 1,285 from 1,183 in 2012), while the average sale price is up 7.7 percent (to $147,470 from $136,945), according to the Northeast Tennessee Association of Realtors (NETAR).
“We are in a steady pattern. This (economic) down time did not hurt us severely like other parts of the country,” NETAR President Barbara Hubbs noted at the association’s recent legislative luncheon.
Still, what is happening in the housing market now gets compared to 2008’s first quarter — when sales volume was stronger and the average sale price was higher.
That benchmark is used because 2008 was the year before the recession began affecting the local economy, a NETAR trends report said.
“The years 2009, 2010 and 2011 were not nearly as good as ’05, ’06 or ’07. That pretty well explains it. ... But it has turned around a little bit,” Tennessee GOP Lt. Gov. Ron Ramsey, a Blountville Realtor and auctioneer, said at the NETAR legislative luncheon.
June is typically declared “National Homeownership Month,” and Realtors appear to have reason to be both optimistic and antsy during this time.
Optimism comes from the sales and price line trending upward. Hubbs attributed this year’s strong start to buyers capitalizing on moderate housing prices and record-low mortgage rates. “Homes that are priced right are selling quickly,” she said in NETAR’s April Trends Report. She also noted the region’s Multiple Listing Service showed a slightly lower inventory of homes compared to last year.
National Association of Realtors (NAR) Chief Economist Lawrence Yun said the national housing market continues to squeak out gains from positive economic conditions.
“Because of inventory shortages, higher home sales will push up home values to the highest level in five years,” Yun said in an NAR release.
The national median existing-home price should increase close to 8 percent and exceed $190,000 in 2013, according to NAR.
Yun has also predicted mortgage rates will rise from around 3.5 percent to near 5 percent in the spring of 2014, and even higher in 2015 and 2016.
Hubbs sees a slight rate increase as a positive.
“The biggest shot in the arm the housing market and economy could get is a return to normal lending standards,” she said. “That’s normal standards — not the practices that put people in homes they couldn’t afford.”
NAR suggests those “normal” conditions would allow a prospective homebuyer to get a conventional loan with a credit score of about 720 or a Federal Housing Administration loan with a credit score of 660. Yun said those standards would increase the number of buyers by 15 to 20 percent.
Realtors’ concern, meanwhile, lies in the performance of the region’s labor market.
Employment for the Tri-Cities Consolidated Statistical Area declined again in this year’s first quarter by one percent while the jobless rate remains above seven percent, according to the East Tennessee State University Bureau of Business and Economic Research.
“The largest year-to-year job loss was reported by Johnson City, where employment was down by 1.9 percent, followed by a 0.8 percent decline in Kingsport and a 0.3 percent decline in Bristol,” the bureau’s first quarter report said. “Despite the lower employment figures, jobless levels continued to decline as some workers became discouraged and left the job market altogether, while others left the area seeking jobs in other regions where employers are hiring.”
NETAR monitors an 11-county area of Northeast Tennessee and Southwest Virginia.
For more, go to www.netar.us.