TRI-CITIES, Tenn. (WJHL) — Real estate experts with the Northeast Tennessee Association of Realtors said lower and middle-income people in the Tri-Cities are being priced out of homes.

Realtor Maria Aramburu said affordability, interest rates and the inventory available are all factors.

NETAR said from 2006 to the end of 2021, typical mortgages in Washington County, Tennessee increased by more than 129% from $540 to $1,240. However, wages increased by only 27%. People in the county were paying more than 30% of their income for housing. That is up from 16% in 2006.

“Once you reach 30%, when you go over that, you’re in what the economists call housing stressed,” said analyst Don Fenley.

According to Fenley, the shift began in 2018 and compounded as people moved into the Tri-Cities during the pandemic.

“2018 all of a sudden, we have a lot more demand than we had supply,” said Fenley. “That started driving prices higher. I think the annual appreciation rate went up something like 6-7% in 2018 and about 9% in 2019. Then 2020, the pandemic hit our markets, went just absolutely crazy. The appreciation rate went into double digits, something that this market hasn’t seen.”

Aramburu said many listings are still selling for more than the asking price and she rarely sees homes under $200,000. She said that cost is making homes out of reach for many families in our area.

“What I see is that on average now, a house is at least $200,000,” said Aramburu. “Three bedrooms, two baths, maybe like 1,200 square footage.”

On top of the initial cost, Aramburu said interest rates increased from 4 to 7% this year, and that’s impacting people’s borrowing power for mortgages.

“On average, a home right now is $200,000-$250,000,” said Aramburu. “If you were approved for that much at the beginning of this year, maybe right now you’re looking at like $180,000-$200,000.”

It’s not just the cost making home buying difficult, it’s the lack of inventory. NETAR said for the fifth straight month, pending home sales declined in September. Sellers accepted 752 new contracts, down 116 from August and 115 from September of 2021. According to NETAR, the area had a 1.7-month inventory of homes on the market for sale, and the typical home was on the market for 47 days, two days up from August.

Ivon and Lehi Lara have been looking for a home in the Tri-Cities for two months.

“The houses we really like, they’ve been so hard to get them because there is always a better offer,” said Ivon Lara.

Lehi Lara said they have been offering over the asking price.

Aramburu said in the coming months home sales will slow with the holidays, but she expects more homes to go on the market come late January.