What Effect Will Covid 19 Have On Home Prices? (Johnson City, Kingsport: apartment complexes, foreclosure)

[jchometeam]

Kingsport had a lot more supply hit the market since March compared to Johnson City, and the demand is much less. I could have bought a much nicer house in Kingsport for the same money, but I there is no way that I would consider living in Kingsport.

Two additional comments:
1) If you are using a public website such as Zillow for your estimate that your home as gone down in value $7,000, I would put absolutely zero stock in that estimate. Those estimates are useless.

2) I don't think you are going to see the big increase in foreclosures that some are predicting. Not even close. Jobs numbers have strongly beat market expectations for two straight months, and even among those without jobs the stimulus efforts related to unemployment has created an environment much different than a "typical" 11% unemployment.

[Serious Conversation]

Originally Posted by donsabi

I think it is all supply and demand. Currently many people who would like to sell have hunkered down because of Covid. The few houses on the market are getting top prices. From now to the end of the year we will begin seeing large number of evictions and foreclosures as government intervention ends. I think the market will then swing the other direction. In 2008 banks did a good job of keeping foreclosed home off the market and trickling them slowly into the supply holding up prices. From what I read I don't think that will be the case this time. The advice I am getting is sell now and hold on buying if you can. (If you need a place to live you have little choice).
One thing about this area is it doesn't reap the big increases but it is also somewhat insulated against the deep dives.

I agree about Kingsport. It is a city gone the wrong way. It looks as though they put all their eggs in the Eastman basket and that's just not enough to do it. On the other had I have seen cities with large industrial concerns that are living high on the hog. Bad city management?

Wealthy folks relocating to the area? Maybe some, but the few I know want the finer refinements of city living. Unfortunately that is not this area. However, if they get the gambling casinos going that should attract some of those refinements.

Without a doubt Covid is going to change a lot of things.

I think it will reinforce existing trends.

Kingsport depends on a lot of legacy industries - Eastman, Domtar, etc., that are really struggling. Domtar is not looking well - the original three month idle was extended. Eastman's contractors have also laid off/furloughed quite a bit, and Ballad furloughed a significant number as well.

The city has been mismanaged top to bottom for years. Johnson City has been positioned better with the university, proximity to Asheville, away from the dirt poor areas of southwest VA/Hawkins County that etc., but Bristol doesn't have these advantages and it has stormed past Kingsport in the last decade. Other than the poor, rural counties, I think Kingsport is positioned the worst as far as housing is concerned.

I could see places like Jonesborough and Abingdon being positioned very well going forward. They're nice places to live without the issues a lot of the area faces. They're relative bargains compared to nicer communities in other areas.

I think Johnson City could actually take a bit of a hit. They've had the most restaurant/store closures that I've seen, COVID spread at the university could be a concern, etc.

I live in Bristol and I'm surprised at how well it has weathered this. Downtown only last Macado's, which was not great anyway. The Pinnacle has lost some things, but most of the place that went out had nothing to do with COVID.

[rccrain]

https://donfenley.com/2020/07/10/was...mpact-but/amp/

From Don Fenley

[Beretta]

Realtors are begging for listings! Inventory is low. I personally have witnessed listings in Kingsport go on the market and have offers in hours this past week (no kidding) to 1 or 2 days.

[firemediceric]

For me personally who is planning my escape to TN as soon as I reach my target retirement date, I look at the current market and vacillate between FOMO and feeling patience will be a virtue. Only time will tell which was the correct emotion.

[donsabi]

This week I have seen some properties dropping their prices. I think this is just the beginning. Unless the republicans agree to extend the fed UE benefit, etc., both renters and homeowners will be in deep trouble. If there is not help from the feds we will see mass evictions. I think many homeowners who are in trouble will begin to look for a quick sale.

[jchometeam]

Originally Posted by donsabi

This week I have seen some properties dropping their prices. I think this is just the beginning. Unless the republicans agree to extend the fed UE benefit, etc., both renters and homeowners will be in deep trouble. If there is not help from the feds we will see mass evictions. I think many homeowners who are in trouble will begin to look for a quick sale.

I don't know- this past week across the Northeast TN/Southwest Virginia MLS there were 340 new listings and over 300 houses going under contract. I don't see any signs at all of weakening. In fact, I had a client this past week that put in a full price, very clean offer on a house (approximately $300,000) in Johnson City within the first day on market and had to fight other good offers to get it.

I will say this- some homes absolutely need to drop their prices. I guess some sellers have gotten the message that this is a hot market and have tried to take advantage of it by pricing their homes far above market value.

[donsabi]

jchometeam,

I agree. Many homes are overvalued. For buyers the driving force is the low interest rates. I think job loss will be the coming facor on sales. As the stimulus packages expire, and if not renewed, I believe we will see homeowners trying to sell to avoid foreclosure. I think this will affect mainly houses on the low price end of the scale. However, many higher income earners are not immune to the effects of Covid 19 on their budgets either.

As I search the web with the question, "buy or sell in 2020," I find a mix of answers. This Covid 19 has created a different market where there is no history. One recommendation stated it all depends on location, and that most CA folks would do better to rent, and those in Memphis TN would do better to buy. The major fear of buyers is buying a home now and in six months see the market value take a 40% hit.

In addition, while combing the real estate websites I noticed what appears to be an investor dumping a lot of 55+ rentals in Kingsport. One investor is certainly not a trend but why would this investor want out of what should be a profitable investment?

[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.

[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.