Home prices in East Tennessee and Southwest Virginia seem to have no limit. According to the Northeast Tennessee Association of Realtors, “June was the single best month the market has recorded since NETAR began local market tracking.” Closings on residential homes increased to a staggering 40.9% over May and are up nearly 10% from last year. The average sales price of residential homes jumped 13% to $207,699. Townhomes and condominiums weren’t far behind. Of the 802 properties that sold in June, the average townhome/condo was up 12.8% and sold for around $151,737. The main catalyst behind the rise in home prices can be attributed to the continued shortage of homes available for purchase. Since the beginning of March, the real estate market in the Tri-Cities has slowly shrunk with available supply of homes for sale. At the end of June, there were only 2.7 months of available homes on the market. Normally, a strong market can be expressed by having five to six months of inventory. The lack of homes on the market combined with historically-low interest rates has caused an influx of home purchases that are at or above asking price. If there was any doubt, this is definitely a seller’s market.
