KINGSPORT — Inventory is low. Prices are high.
Kingsport Realtors say those are the two main trends affecting the current housing market.
“There’s no relief in sight,” said Conservus Real Estate Group Realtor Joe Begley, who is also a homebuilder. “Building material is astronomically high. It’s running with shortages. We’re getting to the point that we can’t get a lot of material.”
Begley said it’s going to get worse before it gets better, with more deals being all cash. Interest rates have been as low as under 3%.
With a shortage of listings, everyone is competing for the same house, said Town & Country Realtor Sharon Duncan.
“(People are bidding) $40,000 over (the) asking (price). When listings go on, you’ve got to be ready to hit the road and be ready to be there with your client,” Duncan said.
Blue Ridge Properties Realtor Collette George, Kingsport’s vice mayor and a Sullivan County commissioner, called the housing market absolutely crazy.
“Right now there are only 40 homes available in the city of Kingsport and 113 available in Sullivan County,” she said. “We are in multiple-offer situations on every home that we list. We have so many people trying to move to this area. We all are dealing with cash buyers coming from other areas. So your local person who needs to get a loan is getting beat out because cash is king right now.
“We are very fortunate in that we have about 300 new construction homes that are going to be started that will alleviate some of these pent-up buyers. We each have pages of buyers trying to get a house or move up. We can’t keep rentals,” she concluded.
According to extraspace.com, today’s home buyers want convenient house plan designs that help them stay organized, allow them to live comfortably through all stages in life, and keep utility costs low. More important, buyers are looking for homes that don’t require much work on their end.
At the end of March, the Northeast Tennessee Association of Realtors reported there were 991 homes in active inventory. At the same time, there were 983 pending sales and 905 new listings.
In March, the average listing price was $321,168, up 19.8% from last year, and the average sales price was $229,499, 23.2% higher than last year, NETAR reported. The median for homes to be on the market was about two months.
Strong demand for homes in the $200,000 and below price range is stable, while demand for homes in the higher price ranges have seen the biggest growth rates. For instance, pending sales in the $400,000-$500,000 range are more than 200% higher than last year, NETAR pointed out.
Typically, up to 5% of the pending sales will fall through due to contingencies, appraisal and home inspection issues. That fall-through rate has been running a little higher this year. Still, the fall-throughs won’t be much relief to the total number of homes for sale, NETAR stressed.
The convergence of active listings, pending sales and new listings is a sign of today’s market dynamics, NETAR pointed out. It points to a continuation of a super-tight inventory.
The National Association of Realtors says the U.S. housing market needs nearly 4 million single-family homes to meet demand, according to a new analysis from Freddie Mac. The 3.8 million shortfall marks a 52% increase in the housing shortage since 2018.
NAR Chief Economist Lawrence Yun has been among real estate economists leading the calls over the last few years for greater inventory and more homebuilding to meet demand.
NAR said the housing shortage mixed with strong buyer demand since the pandemic is prompting home prices to rise rapidly. The median existing-home price for all housing types in February was $313,000, up 15.8% compared to a year earlier, NAR noted.