By DON FENLEY
GRAY, Tenn. – Inventory will be the key metric for market stabilization in the coming months. So far this year, active inventory has gained every month since April. New listings are also picking up. But that doesn’t mean the situation is seeing dramatic improvement, according to the Northeast Tennessee Association of Realtors (NETAR).
One of the best ways to get the big picture is with the months of inventory. It’s on NETAR’s monthly pending home sales graphic and cited in multiple market updates.
Months of inventory is the calculation that says, “this is how many months of inventory is on the market at the current sales pace.” But remember, it’s a dynamic number. It changes with the daily ebb and flow of listings and sales. And since we’re in a market averaging 26 sales a day, things can change pretty fast.
If all the new home construction that has been announced moves to build-out without delays, total inventory will get a boost next year. At mid-year, builders had pulled a little over 1,000 new home permits. That’s not as much as it was during the peak construction years of 2005 and 2006, but it’s better than any other time since then.
Higher mortgage rates, affordability concerns, and inflation fears have put some buyers on the sidelines. Other buyers – especially those with better financial means – are taking advantage of more choices the slight inventory increases are offering and less competitive conditions.
The NE Tenn. – SW Va. market isn’t very close to regaining balanced market conditions market by five to six months of inventory. The last time we had that was in the first quarter of 2018. At the end of July, the region has 1.5 months of inventory.
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Categories: REAL ESTATE