The State of the Tri-Cities TN Selling Market in 2019
2019 is shaping up to be a good year to sell your home in the Tri-Cities. Although just barely over 10 years ago we had a major housing crisis, it seems as if the housing market in the Tri-Cities has bounced back since then. There are plenty of reasons why selling your house in 2019 may be a good idea. If you’re considering selling your home in 2019, you should read this article before you do.
Where Have We Been This Past Year?
Real Estate trends like anything else, are subject to the economy as a whole. Thus, most markets have a natural ebb and flow to them. Over the past 10 years, the United States has witnessed economic improvements which have had a palpable effect on the real estate market. To start, let’s look at 2018, where we saw a slowing in home price growth in the United States as a whole. According to U.S. News & World Report, this cooling was adjoined with an increase in 30-year fixed-rate mortgages which culminated with a seven-year high of 4.94%. This resulted in the purchase of fewer homes toward the end of 2018, which initially increased the available inventory and lowered the median listing price. Both of these relationships can be seen in the graphs below which were made using data from realtor.com.
Looking at the top graph, which is not seasonally adjusted, it is apparent that on a national level inventory rose from March to September 2018 and fell from September to December. In the early months of 2019, it appears as if the inventory remained relatively constant. These inventory and price changes left many skeptical of the market outlook for 2019. A quarterly survey by the national association of realtors found that for the last 2 quarters of 2018, the nation’s perception of whether it was a good time to purchase a home was at a 2-year low. Since then, public perception has increased slightly but still remains relatively low in comparison to the previous 2 years. Specifically, in the first quarter of 2019, 65% of people believed it was a good time to buy a home (37% believe strongly and 28% believe moderately) as opposed to 68% and 63% in quarters 1 and 4 of 2018, respectively.
Where Have We Been In The Tri-Cities?
When looking at market report data for the Bristol Tennessee, Virginia Association of Realtors (BVTAR), some of the national trends are apparent for our market here in the Tri-Cities. Particularly, there was a steep drop in inventory around September of 2018. In August of 2018, the Tri-Cities inventory was 5.75 months, by September that number was 4.09, which is significantly lower than the September 2017 number of 5.17 months. On the national level, September 2018 was the peak month for housing inventory, after September and through the 4Q of 2018 inventory trended downward month after month.
In the first quarter of 2019, the inventory available in the Bristol area decreased sharply, especially when compared to the first quarter of 2018 where inventory rose dramatically. This sharp decrease began in February and has continued through 2019 where we are continuing to see a shortage of inventory in the Tri-Cities area. According to information from Keller Williams, the available inventory in Kingsport, Bristol, and Johnson City for April was 3.8, 3.4, and 3.7 months, respectively. These April numbers show a continuation of the trend that we have seen in the first quarter of 2019. This inventory shortage is further supported by BTVAR data which shows a decrease in active listings for 2019 when compared to 2018. The BTVAR data that supports these claims can be seen below in two graphs. Particularly, the graphs below show the inventory change here in the Tri-Cities area as well as the change in active listings for the past two years.
How Has This Affected Days On Market?
For the Tri-Cities area, we have seen a decrease in the number of days spent on the Realtors Property Resource (RPR) for the first quarter of 2019. This decrease in the number of days on the RPR is in tandem with a decrease in inventory for the Tri-Cities. In other words, we are seeing houses sell quicker because there are fewer of them to be sold. If the shortage of inventory persists, it is likely that this trend will continue. A BVTAR market report displaying this relationship is shown below.
How Has This Affected Home Prices in the Tri-Cities?
As would be expected, the median listing price here in the Tri-Cities has increased in the first quarter of 2019. This rise in median listing price can be attributed to the decrease in inventory we’ve witnessed thus far into 2019. The median listing price for the Bristol area in March of 2019 was about 175k, which is more than $30,000 greater than the median listing price of March 2018. The graph below comes from the BVTAR market report and shows how the median listing price has been steadily tracking above its price since May of 2018. The steep increase we are seeing in the first quarter appears unusual and is most likely a result of decreased inventory.
As for sales prices in the Bristol area, we have seen a similar increasing trend. As of February 2019, the median sales price began to trend upward, which matches up with when we started to see a decrease in supply. In March of 2019 the median price in the Bristol area was about 150k which is nearly 20k greater than its March 2018 number. The graph below depicts this year-over-year change in sales price and was taken from the BTVAR market report.
How Has This Affected Total Sales?
In the Tri-Cities, market data suggests that inventory is down and home prices are up, but there is another important factor we have yet to consider – total home sales. How has the recent dip in inventory and rise in home price affected or been affected by total home sales here in the Tri-Cities? From the market data through March 2019, it would suggest that home sales are greater than the same period in 2018. Particularly, the BTVAR market report states that the number of closed sales from January to March of 2018 was 622 while the number of closed sales for the same period in 2019 was 656. This is an increase of over 5% for the year to date sales through March. Additionally, there were far greater pending sales in March of 2019 when compared to March of 2018. Particularly, the number of pending sales during March 2018 was 359 while it was 500 in 2019. This is further support that homes sales in the first quarter of 2019 are greater than in 2018. The data table below comes from BTVAR and is the source for the aforementioned data.
What Does This Mean For You?
It would seem that through the first quarter of 2019 we have seen the following 4 trends when compared to 2018: 1) a decrease in inventory, 2) a decrease in days on the RPR, 3) an increase in the sales price, and 4) an increase in home sales. So, in recap, what does all this information mean for you? If you are considering selling your home you should understand these trends and know a few things. Firstly, the shortage in inventory usually signals a seller’s market. With a smaller inventory home prices increase, which we have witnessed, as a result of supply and demand. If there continues a shortage in inventory, expect sales prices to remain elevated. However, if you are planning to sell, you should also know that interest rates increased throughout 2018, and on the national level, home buyers are not expected to flood the market. This means that one should not expect home price growth to erupt as a result of buyer demand.