What Effect Will Covid 19 Have On Home Prices? (home sales, new construction)

[Beretta]

Originally Posted by tomengle2

We are entering the market this coming week. Sold our home near Reno Nevada to relocate here in the Tri-Cities area. Have a local agent, looking forward to see what she has to show us.

As a native of the Tri Cities let me be the first to welcome you. If you have any questions please don't hesitate to ask.

[Ted Bear]

Originally Posted by tomengle2

We are entering the market this coming week. Sold our home near Reno Nevada to relocate here in the Tri-Cities area. Have a local agent, looking forward to see what she has to show us.

On the first go around the agent can cast their net far and wide. There is a large variety on the kind of available housing...from rural ag to more dense urban communities.....couple hundred grand to well over a million in price range. Housing market is very hot here...but rumors of significant Covid cases being kept under wraps in our largest community hospital, which if true, might start to slow things just a bit.

[traveldad]

My agent friend said houses are hot, moving quick, and getting multiple offers. Obviously, it should go without noting that these houses are $150k+. I'm not talking about a backcountry trailer with broken washing machines in the yard. Nobody relocating here wants that. Middle class homes are moving fast though and some even above asking price. Summer is ALWAYS a hot time to buy a home though, so you gotta keep that in mind. Last summer home prices were spiking here too and they they dropped in value in the fall/winter. That's pretty normal nationwide.

Now with covid, we'll see what happens as foreclosures start to ramp up this Fall with the government protections ending. I don't personally know anyone who owns a home who's struggling to pay though. Anybody actually know anyone dealing with this?

In the end, the negative effect that covid foreclosures creates may be negated partially/fully by the huge demand on home-ownership that the new "work from home" explosion has caused. Twitter employees can still work from home for the next 12 months. Google, FB, and many Amazon employees have close to a year as well. Many people are realizing their small apartments don't make as much sense now that they're home 22 hours a day. We'll see!

[rccrain]

The FHA delinquency rate is now to 15.65 percent - the highest rate since the survey began in 1979 - and with unemployment above 10%, I worry this housing market is a mirage. Currently there is an eviction moritorium until 8/31/2020, what happens evictions begin again en masse?

[Page2]

Sullivan County court clerks told the Bristol Herald Courier anecdotally they’ve seen eviction filings since the Tennessee Supreme Court allowed the cases to proceed starting June 1. But a specific breakdown of cases is difficult to get because evictions are categorized as contract debts, which are mixed in with credit card debt, hospital debts, and other types of cases. According to the legal aid folks they haven seen a surge in landlord-tenant cases in Sullivan County.
Since USDA - not FHA - is the dominant local federal lender the FHA delinquency rate is noteworthy, but not totally telling about the local market. In Q1 the Tri-Cities rate of properties with new foreclosure filings was up by better than half when compared to the previous quarter. During Q2 the number of local mortgaged properties that were seriously underwater was a little over 10% - and like the foreclosure filings - was flat. Those will be the two major market tells to compare with FHA loans when the forbearance etc. issues are no longer at play.

[donsabi]

Many of the predictions by so-called "real estate experts" on the web proved themselves wrong. Prices remain well above appraised value. Most of the homes I have looked at are in the worst state one could imagine. The few that are in good shape are sold in record time, sometimes within hours of being put on the market. Many homes are re-listed as "back on market." Buyers have a great opportunity with the extremely low interest rates, but in most cases the available homes will need some major repairs after closing.

In driving throughout the Tri - Cities area I have noticed several piles of furniture awaiting pickup in front of many apartment complexes. I assume this is the direct result of evictions or simply people moving prior to an eviction. Many people including families with children are now homeless. Many are forced to sleep in their vehicles. In the parking area of one local park I noticed a large box of children's toys seated next to a trash can. My guess is that one family had to make room and the child's toy were sacrificed.

On the local news the other night they did a story on the Kingsport's attack on the homeless of mounting 4 x 4 blocks on the park benches to prevent the homeless from sleeping on them. The story went on to say that with the recent surge of homeless in our area Kingsport has now removed the blocks from the benches in one local park. Kingsport not only removed the blocks but also removed the wooden benches and replaced them with metal benches. So thoughtful, don't you think?

[Page2]

When I look at home sales and building data I see a different picture than the one painted here. The Johnson City area home builders report they are getting up to 10 calls a day from out of state residents inquiring about buying here. The relocation services that report their activity show fairly large increases. There's also an aggressive local resale market. The August numbers that were posted by the local realtors association shows Johnson City prices are up 15.3% for the first eight months of the year, Erwin prices are up 8.8%, Elizabethton prices are up 27.2%, Greeneville prices are up 11.9%, Bristol Tenn prices are up 3% and Bristol Va is up 6.9% and Kingsport prices are up 12.6%. The homes that are on the market are spending less time on the market than ever and new pending sales outnumber new listings. The total active inventory is at an all-time low. When you look at 12 months sales numbers home $200,000-$300,000 sales are up a little over 20% and sales in the $400,000-$500,000 range are up a little over 40%.
Granted some people have hunkered down. Many who would like to scale back are not finding what they want on the market. That's a condition of low inventory.
Finally, new home construction is still not at its pre-recession level, but it's growing. For the past four years, builders have added 1,000 new homes a month. That will likely increase to about 1,500 this year.
There are always bad examples in any market, but last year the real estate industry (existing sales, new home sales and commercial sales) had sales that were a little of $2 billion dollars.
So, overall the pandemic has not hurt home values on the market level. They have, according to the date, increased it.
PS - When you look at market share and price appreciation Sullivan County and Kingsport led the region last year for market performance and is seeing fairly strong growth this year.

[rccrain]

Page2, thank you for the update. What is the going $/sqft for new construction (mid-grade finishings) in the TRI?

[Cant_think_of_one]

Originally Posted by skeddy

search - "housing market is booming" and you'll see it's happening all over the country. With mortgage rates around 3%, it's no wonder.

People are being stupid and making major purchases because they can make the monthly payment.



The other factor is "white-flight." I live in Vegas and I'm sick as to what's happening on the strip. EVERY NIGHT there's a shooting, aggravated assault, stabbing, and it's NOT white people doing it.


In LA, the Lakers won, rioting ensued, a Metro bus burned, businesses destroyed. Did I mention, the Lakers WON?


I love Vegas, but I think I'm done. Any place that is more than 85% white and doesn't tax Social Security. I don't care about the weather. But it's got to have a Waffle House!

[Jim37680]

Originally Posted by Cant_think_of_one

People are being stupid and making major purchases because they can make the monthly payment.



The other factor is "white-flight." I live in Vegas and I'm sick as to what's happening on the strip. EVERY NIGHT there's a shooting, aggravated assault, stabbing, and it's NOT white people doing it.


In LA, the Lakers won, rioting ensued, a Metro bus burned, businesses destroyed. Did I mention, the Lakers WON?


I love Vegas, but I think I'm done. Any place that is more than 85% white and doesn't tax Social Security. I don't care about the weather. But it's got to have a Waffle House!

https://www.google.com/maps/@36.5472...4!8i8192?hl=en