Home prices in Kingsport and Bristol appreciated by less than 1 percent over the year that ended June 30, but that was still good enough to place the area 35th nationally in an index of nearly 300 metros.
And while prices declined for the second straight quarter, that decline was much slower than in the first quarter and not enough to put year-to-year values in the red.
The figures are from the Federal Housing Finance Agency’s quarterly “house price index,” and they show Kingsport’s 0.82 percent growth ranked third-best of more than a dozen metro areas in the Mountain South. Roanoke ranked 22nd with a 1.22 percent annual appreciation and Blacksburg was 30th with 0.94 percent growth.
Johnson City’s metro area is measured separately from Kingsport’s and is not included in the 296 metros measured by ranking, but its annual appreciation rate is included in the report. That number checked in at 0.48 percent appreciation and would have tied Johnson City (consisting of Washington, Carter and Unicoi counties) for 48th nationally.
The purchase-only HPI uses home sales price information from the millions of mortgages purchased by Fannie Mae and Freddie Mac to reach its numbers.
In 2008, while the nation as a whole saw year-to-year house price declines get progressively worse each quarter, from 3.1 percent in the first to a record 8.2 percent in the fourth, Kingsport-Bristol saw year to year price increases — of 5.1 percent in the first quarter, 4.8 percent in the second, 3.9 percent in the third and 6.3 percent in the fourth.
This year’s regional growth, though it still remains among the best in the country, is slower than what the metro area was posting during the worst of the national declines. Prices nationally were down 6.1 percent from the second quarter of 2008, but since that compared favorably to the depth of 2008’s decline, FHFA’s Edward DeMarco reacted with cautious optimism in part because the quarterly declines have stabilized.
“For the second consecutive quarter we are seeing much slower rates of depreciation in the HPI than in 2008,” DeMarco said. “This is further evidence that prices may be stabilizing for the nation as a whole.”
The Tri-Cities tends to lag behind the nation in economic indicators, and that appears to be proving true in housing. Nationally, while prices dropped each quarter of 2008 by 1.4 percent to 3.4 percent, Kingsport was enjoying quarterly increases.
But this year, while annual appreciation has remained relatively strong, Kingsport has seen quarterly price declines of 3 percent in the first quarter and 1.1 percent in the second quarter, while the national numbers have improved to a 0.5 percent decline in the first quarter and a 0.7 percent decline in the second.
If the local area’s performance continues to lag behind that of the nation, local housing industry professionals hope the numbers simply stay relatively flat.
“I think we’ll be flat for another six-plus months, but I don’t think it will turn negative,” said Carla Dunn, this year’s president of the Northeast Tennessee Association of Realtors.
Dunn said the slow pace of sales has been a bigger concern than price levels for local real estate agents and builders. Improving numbers in harder-hit areas could help alleviate that problem, too, Dunn said, because many people have wanted to move to the Tri-Cities in the past couple years but couldn’t, because they could not sell their houses.
If those markets — in Florida, for instance — get moving, Dunn said the Tri-Cities should benefit.
“I do think that will help get our market moving transaction-wise,” she said.
Dunn believes the local economy will have to improve before home values in the Tri-Cities start to rise again.
“Our unemployment numbers are going to have to get better for that, but considering what’s happened to home prices in most of the country, flat is good at this point in time.”
The Mountain South region has fared pretty well in recent quarters relative to the country, and Tuesday’s report showed that of the 72 metro areas with any price appreciation over the past year, six were in this region. In addition to Kingsport; Roanoke and Blacksburg, Va.; Knoxville; Greenville, S.C.; and Hickory, N.C., saw price gains. Prices have declined over the past year in Asheville and Charlotte, N.C.; Chattanooga and Nashville; and Atlanta.