TRI-CITIES, Tenn. (WJHL) – It is no secret the housing market has been tough for home buyers over the past year and buyers are not seeing any relief from rising home prices locally.
A report issued by the Northeast Tennessee Association of Realtors (NETAR) shows home sales are slowing slightly, but prices continue to hit new highs.
“Every month they are going up,” said Rick Chantry, president of NETAR.
The price tag on homes is forcing many locals out of the market. This comes as out-of-state buyers continue to move to the region at unprecedented rates, driving up the prices for Northeast Tennessee homes.
Chantry says in his 30-year career he has never seen the prices of homes rise this rapidly or witnessed this number of people moving here.
It comes down to the basic laws of supply and demand.
“We just don’t have enough houses and so people are willing to pay over what we are asking,” said Chantry.
While it is good on paper to bring more people and revenue into the region, Chantry adds it is directly impacting local buyers looking for their first home or an upgrade.
“It is hurting our local people more, and it is more difficult to find houses when they sell theirs,” said Chantry.
Even though home sales are slowing, the median listing price has increased every month this year, according to a NETAR report.
When it comes to inventory, if all homes were to sell right now there would be one month of inventory left. In a healthy market, it should be five or six months of inventory.
“People can’t find what they want. So, they are willing to pay more for it,” said Chantry.
New Again Houses, a national chain founded and based in Bristol, Tenn., reports this phenomenon is encouraging many home buyers to look instead into flipping homes or renovating an older home that needs a lot of work.
“Being able to purchase a house that you can fix up yourself could provide people access to homeownership, I think that’s a good thing,” said Matt Lavinder, founder of New Again Houses.
But, it doesn’t come without challenges. For example, the ongoing labor shortage presents a large obstacle.
“It’s expensive, and it requires a lot of skilled people. That is a big project for someone,” said Lavinder. “It’s not a reality show, you do have to add value to the house.”
To do this, Lavinder says owners should fully understand the scope of how they want to add value to the home and then budget generously for the changes they want to make.
Chantry agrees there is a market to do this successfully, but the home buyer must plan ahead.
“Do your homework and work with a professional who knows what to do and how to do it,” said Chantry. “A rule of thumb is you are probably going to spend 20% more than you guess when you bought the house because of the fact that you don’t know what you are getting into when you open that wall up.”
Lavinder and Chantry agree that home ownership is something to be proud of and provides stability.
“If you don’t own a home, you are at the mercy of rental prices that you have no control over,” said Lavinder.