Real Estate Market Update | September 2023

Dated: September 12 2023

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First things first, mortgage rates. Mortgage rates have become a hot topic recently, which is quite interesting because, historically, they weren't a significant consideration for homebuyers and sellers. As you can see from the graphic, mortgage rates have generally been on a downward trend for the past two decades. However, in recent years, we've seen a rapid increase in mortgage rates. This has caught people's attention, especially with all the news about the Federal Reserve's actions regarding interest rates.

In the past, people didn't pay much attention to mortgage rates when purchasing a home. But now, many homeowners are locked into historically low mortgage rates, with approximately 70% of mortgages at four percent or lower. This is causing some hesitancy among potential sellers, contributing to the low inventory of homes for sale.

Experts initially predicted a gloomy housing market this year, but that hasn't materialized. While home price appreciation has slowed down, we haven't seen home prices drop. In fact, home prices have continued to rise, as seen in the Case-Shiller index. On a year-over-year basis, home values have consistently increased due to low inventory levels.

Now, let's take a look at our local market. The average sales price in our area has been steadily increasing over the past decade, and there's no sign of a significant price drop. Even if there were a modest decrease in prices, it wouldn't erase the substantial gains we've seen in recent years. The floor for home prices has shifted upward, and it's unlikely we'll return to previous levels.

One of the main factors affecting our local market is low inventory. We've been experiencing a shortage of homes for sale for years, which has driven up prices. Even with a slight increase in inventory this year, it's not enough to balance the market.

The number of new listings and total listings for sale has been on a steady decline since 2015. This shortage of inventory, combined with a decrease in pending sales, has resulted in fewer homes being sold.

Sellers, take note: while there are fewer buyers in the market, they're looking for move-in ready homes. Buyers are hesitant to invest in homes that require additional repairs, as they've already stretched their budgets to cover down payments and higher purchase prices. Working with an experienced agent who can help set up your home for success in this current market is key to getting top dollar and your home selling quickly.

Buyers, don't fret: while it is still a seller's market, inventory is increasing, giving you more options. There are fewer buyers looking, which reduces your competition a little. Sellers are also more willing to negotiate home repairs and other items to get their home sold. While interest rates are high, it is likely they will eventually come down allowing you to refinance your home and reduce your monthly mortgage payment. Just like sellers, working with an experienced agent who can help you set up a solid game plan is key to you successfully purchasing your next home.

With my expertise and eXp Realty's resources, I'm here to guide you through the dynamic real estate markets in Johnson City, Kingsport, and Bristol, Tennessee, ensuring you make the best real estate choices. Whether you're a buyer or seller, let's discuss your goals and develop a winning strategy tailored to your needs.

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Jay Cottrell

EXPECT MORE. Growing up in Northeast Tennessee it has been a passion of mine to help others. I have over 15 years of experience in building and running successful companies. As well as over 7 years of....

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