By DON FENLEY
GRAY, Tenn. – Spiraling mortgage rates continued squeezing Tri-Cities area home sales last month. Closings declined for the eighth straight month in October while prices were stubbornly flat, according to the Northeast Tennessee Association of Realtors (NETAR).
“The market increasingly looks like it is returning to a traditional seasonal pattern. But everything is not typical. While sales have been on a slow downward trajectory, prices have plateaued and so far, are not budging,” said NETAR President Rick Chantry. Single-family existing homes and condos were down 20 percent from October last year while the typical sales price was 16 percent higher.”
There were 705 closings last month, down from 887 last year. Closings typically see a slight increase by mid-month to include those not filed by the first of the month. The median sales price was $232,500, down from $235,000 the previous month and $32,000 higher than those that missed the filing deadline. So far this year, prices are 18 percent higher than were during the first 10 months of last year. “We remain on track for the third straight annual average price,” Chantry said.
October saw another slight increase in active inventory. At month’s end, the region has 1.7 months of inventory. That’s how long it would take to sell everything on the market at the current sales pace. Balanced market conditions are typically described as five to six months of inventory. “The region has not seen balanced conditions since the first quarter of 2018,” Chantry said.
The typical sale that closed in October was on the market for 48 days. That has increased from a low of 42 days in April. Market watchers pay close attention to how much time a property sits on the market before selling as a consumer demand gauge. When it decreases, consumer demand is increasing. When it grows, demand is declining.
“What we see here is a very subtle decline in demand,” Chantry said. Most of it can be attributed to buyer fatigue and seasonal slowing.”
What has market watchers looking over their shoulders is the labor market’s effect. So far this year the local economy has been adding jobs at a steady clip. The region has clawed back jobs lost during the pandemic and added another 4,000. But the monthly new job growth rate is beginning to slow. In September it was down to 365 new jobs a month. That mirrors what’s happening nationwide as the jobs market has not shown signs of weakening under the FED’s efforts to control inflation.
One thing you see in local and regional labor markets that you don’t see on the national level is if the jobs begin to lag, workers begin looking for greener pastures. That – and housing inventory – are two of the primary drivers for the regional housing market. In a region where the major cities are within to commute comfort zone there can be a lot of churn.
Categories: REAL ESTATE