What Effect Will Covid 19 Have On Home Prices? (Johnson City, Kingsport: sales, real estate) - Kingsport - Johnson City - Bristol - Tennessee (TN) -The Tri-Cities area - City-Data Forum

donsabi · 06-30-2020, 12:41 PM

I have read many dire predictions on the effects of Covid 19 on home sales and prices. I wonder how this will play out in the Tri-Cities area. What do you think?

jchometeam · 06-30-2020, 01:10 PM

It has increased prices significantly! This is a huge sellers market.

Cant_think_of_one · 06-30-2020, 07:19 PM

Quote:

Originally Posted by jchometeam

It has increased prices significantly! This is a huge sellers market.

Thanks to low interest rates people are buying property because they can afford the monthly payments. Consumer spending is through the roof with wages being stagnant. US credit card debt is equal to the GDP in many countries. Wait for the crash in 2021.

jchometeam · 07-01-2020, 05:00 AM

I have said for years that local home prices are too high, but much of that is because we don't have large price swings downward because foreclosure rates are low. Even in the 2008-2009 housing crisis, home values locally stayed stable. Historically we also haven't had the large upward price increases that other markets have had either.

When COVID hit this area, the supply was really low (still is) while demand never ceased. This was particularly the case in Johnson City. As an example, I sold my house at the height of the COVID fear (Mid-March) for around $225,000 that I would have priced at $200,000 a year ago but the higher price reflected the competition. The house sold in 4 days to a buyer that could close within 2 weeks. I was in the market for a house in the $400,000-$500,000 range, and the supply in that price range basically didn't exist. After looking at everything that hit the market for three months, I finally purchased a house that I close tomorrow on, but there were several offers within the first day on market and I had to pay approximately $15,000 over asking price to get the house.

If a house in Johnson City is priced fairly, it is selling very quickly. From $125,000-$215,000 range, there are currently 78 listings but 55 of those are under contract leaving only 23 available. In the higher price point, the market is even tighter. There was a day a couple weeks ago that I saw 6 homes in Johnson City over $500,000 go under contract in the same day.

Creek Life · 07-01-2020, 05:47 AM

Recently bought a home on the outskirts of JC for $100k and had a cash offer a few weeks after closing for $125k, before we even got a chance to start renovating. Apparently the buyer was late to the table and really wanted the house.

We accepted their offer then bought a home in Erwin for $140k and started the cleanup of the exterior. Our realtor recently stopped by saying we could now get $200k for it due to the market and its location (walkable to downtown with beautiful homes around us), but we love our home and community so we're staying put, at least for now.

It's not just here in TN but in FL too. We have a 1+ acre plot of land 3 miles from the beach that we had plans for down the road. Plans have changed so we had it under contract a few months back for $90k and the buyer backed out. Well a new offer is now on the table for $176k (we accepted) with a similar backup offer waiting in the wings.

Wasn't anticipating the Covid pandemic to send an extra $200k or so our way but we'll take it. Guess the folks that can afford to do so are buying up property in the country, similar to the mad rush to buy toilet paper a few months back. Lots of people are also working from home now and can be more flexible with where they can live, which benefits us here in Erwin with gigabit fiber to the house.

Serious Conversation · 07-01-2020, 07:20 AM

I could see some positive movement coming from wealthier, out of area buyers looking to get out of the big cities for various reasons. If you don't need a job, the area has some appeal for people looking for certain things.

That said, with unemployment likely to run 10% for the foreseeable future and the enhanced unemployment running out at the end of the month, many people aren't going to have what they used to have to spend. Many jobs, like Domtar, may be gone forever. Going forward, I don't think the out of area interest will offset poor locals.

Ted Bear · 07-01-2020, 07:50 AM

Builders are flat out busy. Homes are selling like hot cakes. Best to feed the ducks while they are quacking. This astonishing behavior, which appears too good to be true, will not last.

sprintuser2014 · 07-02-2020, 04:12 PM

I can say I think if you are in the Kingsport area it's not good. I think it's just the overall decline of the Kingsport/Gate City area though. My house has lost $7,000 estimate value vs last year. The decline of this part of the area and the pandemic is hitting it hard. I'd say it's a buyers market now but NOT a sellers. If I sold now I'm sure my value would even be far less than the ETA of a $7,000 value loss vs last year. So buy? Yes, maybe? Sell um no.... Not in the Kingsport area for sure.

Serious Conversation · 07-02-2020, 08:04 PM

Quote:

Originally Posted by sprintuser2014

I can say I think if you are in the Kingsport area it's not good. I think it's just the overall decline of the Kingsport/Gate City area though. My house has lost $7,000 estimate value vs last year. The decline of this part of the area and the pandemic is hitting it hard. I'd say it's a buyers market now but NOT a sellers. If I sold now I'm sure my value would even be far less than the ETA of a $7,000 value loss vs last year. So buy? Yes, maybe? Sell um no.... Not in the Kingsport area for sure.

Everything that I see on the real estate websites shows increasing prices.

I don't understand this at all in Kingsport. What you said goes against the data, but not my gut instinct. What would cause property values to rise in Kingsport? To me, nothing. The town is in decline all the way around - jobs situation worsening, lack of retail, poor dining, no nightlife, few things that would make anyone want to live there.

My grandmother recently sold her house halfway between Kingsport and Blountville. It sold for $155k. About 1400 sq. ft, dated, systems are good (new heat pump last year, new roof 2016), but it cosmetically dated. Bad schools. I was shocked it sold for that. The neighborhood is fine, but it's 15-20 minutes to anything but a Pizza Plus or McDonald's, and to a grocery store.

donsabi · 07-03-2020, 08:20 AM

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.