By DON FENLEY
GRAY, Tenn. – It’s always interesting to compare the region’s high-end housing to the rest of the market’s performance. November wasn’t an exception because the high-enders are picking up activity as we near the end of the year.
High-end home sales have outperformed overall market sales every year since 2018, and while they don’t dominate market share, their five-year performance has had an outsized effect on nudging the region’s median sales price higher. The median sales price measures the middle price of homes that sold, meaning half of the sales were at a higher price, and half were sold at a lower price.
So far this year, home sales have declined for five months. Last month they were 29% below last year’s sales. In the $500,000 and above price range, they’ve declined for the past six months. But they’re only 18% below last year’s sales.
Expect some shifts in the December numbers.
Pending sales for the overall market are down 18% from last year. But in the high-end market, they are up almost 12%. That is probably not enough to make a big difference in the median sales price. Still, it will nudge the average price a little higher than November’s $263,372.
There’s also a noticeable difference in the active inventory and new listings.
The region’s overall inventory is 11% better than last year. It’s almost 60% better than last year for homes priced at $500,000 and up. And high-end homes are coming to market at a faster pace.
New listings for the overall market at the end of last month were down almost 8% but almost 46% higher in the top price range.
Across the nation, sales of luxury homes are down 28%. That is a little more than 10 points higher than non-luxury sales. It’s yet another example of how hyper-local housing markets are because the local market is seeing opposite results.
During the first 11 months of this year, non-luxury home sales are running 10% below last year. In the top price range, they’re up a little over 28%.
The consensus for local home prices is the slight softening currently underway will continue, but the odds of a price decline are low. They’re low due to the equity all homes have gained during the pandemic housing boom and continued low inventory and high demand. Currently, the price outlook for next year is a modest price increase. How modest that increase will be begs the question: how much influence will be linked to the performance of sales in the $500,000 and above price range? It’s not the only influencer, but given the five-year outsized performance, a softening in that market could help nudge the median home sales price lower.
Categories: REAL ESTATE