Tri-Cities pending home sales decline for fifth month



GRAY, Tenn. – The local housing market looks a lot like the changing season. Home sales are falling like colorful leaves. So far, it’s been a gradual process that hasn’t rocked the market’s boat, but there’s little doubt things are changing.

Home sellers accepted 754 new contracts in September, down 116 from August and 115 fewer than September last year, according to the Northeast Tennessee Association of Realtors (NETAR).

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. And they’re not the only forward-looking indicator showing signs that higher mortgage rates and inflation concerns are tapping the brakes ever so slowly on housing.

“The accepted contacts decline is a clear signal sales are in a seasonal pattern, and the market is cooling,” NETAR President Rick Chantry said. “Buyers are beginning to push back, and higher mortgage rates have given them a little more bargaining power. Some sellers are negotiating more before accepting a contract, and 303 reduced their asking price last month. We’re still in a sellers’ market, and given all the current indicators, will be that way for a while.”

At mid-month, the region had 1,350 properties on the market. That gives the market a 1.7-month inventory of homes on the market for sale. That’s the time it would take to sell everything on the market at the current sales pace. “Inventory has been inching higher for seven months,” Chantry said. “We have had less than two months of inventory for 22 months, and the last time we had balanced market conditions was the first quarter of 2018.”  For a dramatic reversal there would need to be a lot more inventory. A market with balanced conditions has 5 to 6 months of inventory. The Tri-Cities hasn’t had that since the first quarter of 2018.

Another indicator waving the slowing market flag is the time a home spends on the market before selling. The typical home sold in September was on the market for 47 days before it closed. That’s up two days from August and the seventh monthly increase this year. When the time on the market increases, demand is softening. When it declines, demand is increasing.

This time last year the typical home was on the market for 50 days before selling. The year before it was 57 days. That’s just one of the signs that while today’s market is registering a slow stabilization, there’s more demand for housing now than during the past two Septembers.

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