Reports from Attom Data’s Solutions and the Northeast Tennessee Association of Realtors (NETAR) point to the same thing – strong fourth quarter home sales.
Sullivan and Washington counties led East Tennessee on Attom’s Q3 Pre-Mover Housing Index for the third straight quarter. The index is predictive of strong home sales activity in the fourth quarter.
It rounds out NETAR’s pending home sales reports that show double-digit increases in the number of approved contracts for home sales in September and October.
Using data collected from purchase loan applications on residential real estate transactions, the Pre-Mover Housing Index is based on the ratio of homes with a “pre-mover” flag during a quarter to total single-family homes and condos in a given geography, indexed off the national average. An index above 100 is above the national average and indicates an above-average ratio of homes that will likely be sold in the next 30 to 90 days in a given market.
Here’s how the index looked in East Tennessee markets compared to Q3 last year.
Sullivan Co. – 227, up 20%.
Washington Co. – 201, up 9%.
Knox Co. – 97, down 27%.
Hamilton Co. – 94, down 53%.
The October pending sales inventory for the 11-county region monitored by NETAR was 995 approved contracts, up 27% for October last year.
A statewide snapshot of the Pre-Mover Index shows Sullivan trailing only Rutherford, Williamson and Sumner counties in the Knoxville region’s housing market.
“Home buyers are most likely to move — and homeowners are more likely to move up — in markets with plenty of available jobs along with a reasonable supply of homes for sale,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Markets with this enviable and increasingly rare combination of jobs and housing inventory tend to be in secondary and even tertiary markets that are somewhat off the beaten path. Even in more mainstream markets, the counties with the highest pre-mover indices tend to be in outlying areas where more inventory is available or can be built.”
Sullivan and Washington counties meet some of those conditions. The local labor market continues to slowly add nonfarm jobs and although neither of the region’s two metro areas has fully recovered to pre-recession economic levels many of the fundamentals are positive.
And home sales have been brisk for almost two years despite a steadily tightening inventory. In October, the region has a five-month inventory of existing homes on the market, according to NETAR’s Pending Sales Report. Six months of inventory is typically used as a benchmark for normal market conditions; however, the local norm is nine to 10 months.
Another factor boosting optimism about the local housing market is new home construction. Builders are now selling new homes faster than they can build them. Their biggest headwind is finding quality crews in a labor market where construction firms took a major hit during the recession. Many – if not most of those workers – have moved on to other trades.
Out of 331 U.S. counties analyzed for the Attom report, 213 posted a pre-mover index above the national average in the third quarter. (Sullivan and Washington counties were more than double the national average) The average September unemployment rate in those 213 counties was 3.8 percent, compared to an average unemployment rate of 4.2 percent in the 118 counties that posted a pre-mover index below the national average in the third quarter.
Locally unemployment rates are in the 3% range, and it has been a strong consumer confidence motivator despite the fact that the record low rates are being driven by a declining labor participation rate.
Last year existing single-family and condo resales had a total sales volume that broke the $1 billion mark for the first time. Given current conditions, sales and the sales volume will see another record for the 2017 annual report.