By DON FENLEY
GRAY – Tenn. – The Tri-Cities housing market is pushing back against a sales slump. The market is responding to shifts in monetary policy and consumer preferences.
Local pending homes perked up in July after three months of decline, according to the Northeast Tennessee Association of Realtors (NETAR). Sellers accepted 888 new contracts. That’s 10 more than June and 64 fewer than July last year.
But don’t look for a big increase in upcoming sales reports. Despite July’s increase, the sales trend continues a slow decline from last year. What July’s pending sales do point to is a continuation of a flat short-term outlook. That outlook extends to the new home market. Borrowing cost are 50 percent higher than they were this time last year and that has pushed some buyers back onto the sidelines waiting to see how things shake out.
Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family homes and condominium sales in the region monitored by the Northeast Tennessee Association of Realtors (NETAR). Since resales go under contract 30 to 60 days before they close, accepted contracts offer insight into home sales’ direction.
“The two drivers of the July increase were a mortgage rate decrease that boosted home buying power by around 10 percent and a slight increase in inventory that let buyers with the means take advantage of less competition, NETAR President Rick Chantry said. “Closings – that’s when deals become an actual sale – have been flat in the 800 range since March. That’s not enough of a decline to spur local sellers to begin reducing asking prices as it has in some large metro areas. In fact, July’s typical listing price was the highest it has been this year.”
Chantry said that focusing too much on month-over-month home sales and prices shifts is typically not a good way to get a handle on the market. Today’s market is an exception. Most of the mass media is heralding a housing market recession based on what’s happening in major metro markets. Local conditions do not mirror that. For example, the local seven-month median price trend is shows an almost 20 percent increase from last year. And July’s typical sales price was the second highest of this year.
At the end of July, the region had 1,283 properties on the market. That’s 1.6 months of “It’s the best number we’ve had so far this year, but 179 from June in a market averaging 28 sales a day,” he added.
The typical home that sold in June was on the market for 44 days before it closed, the same it was in June and up one day from May. Time on the market is a demand indicator. When it increases, demand is softening. When it declines, demand is increasing.
The average listings went under contract in two weeks days last month.
Categories: REAL ESTATE