“Although the trends data show some existing housing market softening in the Johnson City and Washington County growth rates, they also show a dynamic and very busy beginning to the peak home buying and selling season,” said Karen Randolph, the president of the Northeast Tennessee Association of Realtors, in a statement last week.
According to data provided by the association, Johnson City has seen a 3.8% increase in the number of single-family home closings during the first five months of 2019, 332 compared to 320 at this time last year. Kingsport, however, has seen a 3.7% decrease in closings through May this year, 314 compared to 326 last year.
The average sales price for homes closed in Kingsport and Johnson City from January through May 2019 have also decreased, dropping 5.5%, or $12,267, to $209,898 in Johnson City and 3.6%, or $6,358, in Kingsport to $171,583.
At a countywide level, closings in both Washington County and Sullivan County for January through May 2019 have increased. Sullivan County has seen 829 closings through May this year, up 7.2%, and Washington County has seen 694 closings, a 4.2% increase over 2018.
Don Fenley, the market research analyst at the Northeast Tennessee Association of Realtors, said the market is continuing to grow, but the rate of growth is not as fast as previous years.
“The market is readjusting to the economy,” Fenley said. “As prices go up and there’s less of the $200,000 and below homes, obviously the number of sales are going to go down because people can’t get financing for them.”
Fenley said the local housing market is also struggling with a lack of inventory. Under normal market conditions, the average market would have about six months worth of available homes, which Fenley said is the amount of time it would take to exhaust the available active listings at the current month’s sales rate.
About four years ago, Fenley said it was common for the region to have 11 months of inventory in any given month. For the last year, the region has been at four months of inventory, and Fenley said Johnson City’s inventory hasn’t been above three months in two years. “That’s very, very tight inventory,” he said.
Johnson City and Kingsport have experienced a slight decrease in their shares of the local single-family resale market in January through May 2019.
Compared to Kingsport, Bristol, Elizabethton, Greeneville and Erwin, Johnson City homes sales accounted for 32% of the closed home sales in 2018. Kingsport had a slightly smaller share of the market at 30.1%.
While cities like Bristol and Elizabethton have experienced slight increases in their share of the single-family housing market this year, Johnson City and Kingsport have lost a couple percentage points — Johnson City has averaged 30.4% of the market for January through May 2019 and Kingsport has averaged 28.6%.
At a county level, Sullivan County continues to hold a plurality of the single family housing market and has seen its share grow marginally compared with other counties in Northeast Tennessee and Southwest Virginia during the first five months of 2019. Sullivan County averaged 31.3% of the market for January through May compared to 30.2% in 2018.
Washington County, meanwhile, lost less than a percentage point of its 2018 market share during the first five months of 2019, dropping from 27.2% to a five-month average of 26.4%.
Taking into account single-family homes, town homes and condominiums, Randolph said there has been 796 residential closings in Johnson City through May 2019, 42 more than the first five months of 2018. There have also been 70 more pending sales during the first five months of this year than last year.
“When you look at the total number of closing and deals in the Johnson City and Washington County markets so far this year, things are busier than they were last year,” Randolph said.