High-end buyers propping up housing market
Published 1:06 pm Tuesday, November 7, 2023
High-end buyers are propping up the Tri-Cities area housing market as higher mortgage rates have pushed an increasing number of borrowers to the sidelines. Sales in the $500K and above price range were up 40% in October while the overall market dropped to a six-year low.
“Before the pandemic, sales in that price range accounted for no more than 2% of all sales. So far this year they are 11% of sales, and buyers paid cash for over half of them last month,” said Jan Stapleton, president of the Northeast Tennessee Association of Realtors (NETAR). Since January 685 high-end sales have closed. Last year’s record level was 766 sales.
“The median price for all homes continued increasing from last year’s level, but the growth rate is trending lower,” she added. “The luxury home sales trend is also slowing.”
There were 627 closing in NETAR’s early October sales count. That’s two more than there were in September and 109 fewer than October last year. The sales number typically increased with the mid-month update when closing reported too late for the first-of-the-month count are included.
October’s median sales price was $257,800, down from $260,000 in September and $25,300 more than last year. The median is the point where half of the homes sold for more and half sold for less. October’s average sales price was $303,056. It was $272,017 last year.
While there were slight sales increased in the top of the three-price ranges of both the affordable and move-up markets, the overall performance of both sectors was down. The affordable market is down 14% from last year and the move-up market is down 13%.
There were 84 luxury home sales – 24 more than last year. Three luxury sales were in the $1 million or more class.
Demand – as measured by the time a property sits on the market before closing – was unchanged from September at 50 days. An increase in time on market signals less demand. NETAR calculates the days on the market from the day a property is listed until it closes. Many of October’s sales were going from listing to accepted contract in two weeks or less.
Fewer sellers dropped their asking prices last month, but those who did made an average $22,972 concession to close the deal. That accounted for 34% of all sales. The most common reduction was $10,000.
Active listings grew by 63 from September, barely boosting the region to 2.5 months of inventory.
There were 330 new construction single-family homes, townhomes, and condos listed in early November. During the same period in October there were 340.
Many of the county and community submarkets market conditions follow the regional pattern of fewer sales and higher prices. Most of the submarkets that posted sales increases were the smaller markets. The highest median price ($492,050) was in Piney Flats.