By DON FENLEY

Annualized pending home sales in the Tri-Cities region rose for the 12th consecutive month in March. It’s a data signal that the local housing market is still working its way back from one of the sharpest demand contractions in the region’s recorded history.

The annualized rate smooths month-to-month volatility by measuring the sales pace across a rolling 12-month window. The metric is watched closely by market analysts because it strips out seasonal distortions and provides a cleaner signal of underlying demand trajectory than any single month’s raw contract count.

Raw monthly pending sales figures from the Northeast Tennessee Associaiton of Realtor (NETAR) capture activity at a moment in time. They respond to weather, holidays, school calendars, and short-term rate fluctuations in ways that can obscure the market’s actual direction. The annualized rate irons out those variables.

When the annualized figure moves consistently in one direction over multiple months – as it has since April 2025 – analysts treat it as a reliable signal of structural demand, not seasonal noise. Twelve consecutive months of gains is not an accident of the calendar. It reflects a durable shift in buyer behavior.

The Tri-Cities market entered the pandemic era from a position of measured, steady growth. The 2019 pre-pandemic baseline averaged 641 annualized pending sales per month. It’s a pace that reflected organic regional demand without the distortions that followed.

What followed was extraordinary by any regional standard. Pandemic-era migration patterns, historically low mortgage rates, and suppressed inventory combined to drive annualized pending sales from 680 in March 2020 to a peak of 864 in December 2021,  a 27.1% surge in less than two years.

The correction that followed was equally sharp. As the Federal Reserve moved aggressively to control inflation and mortgage rates climbed through 2022 and into 2023, annualized pending sales retreated steadily. The decline from the December 2021 peak to the February 2025 trough covered 204 units.

The correction phase had two distinct chapters. The first, from early 2022 through late 2023, was a rapid unwinding driven directly by rate shock. The second, through most of 2024 and into early 2025, was a more stubborn plateau. That stagnation reflected a market caught between buyers waiting for rates to fall further and sellers unwilling to list at lower valuations.

The inflection came in April 2025. After touching 660 in February of that year the metric began climbing and has not looked back. The recovery has accelerated in recent months: the annualized rate stood at 718 as recently as December 2025 and has added 28 units in just the first quarter of 2026.

At 746, the current annualized rate sits 16.3% above the 2019 pre-pandemic baseline of 641. That comparison matters. It suggests the Tri-Cities market has not simply returned to its pre-pandemic demand base. It has expanded beyond it, reflecting genuine population and household growth in the region.

The gap that remains is with the pandemic peak. Whether that gap closes depends heavily on mortgage rate trajectories and the pace of new listing activity across the region’s most active price bands.

Twelve months of consecutive annualized gains represent a meaningful threshold. Short-term recoveries in this metric tend to stall within a few months when underlying conditions are uncertain. A year-long unbroken ascent points to something more durable: a buyer base that has adjusted its expectations to the current rate environment and is transacting regardless.

The question the data cannot yet answer is whether the recovery pace is sufficient to approach the pandemic-era peak, or whether the market is settling into a new equilibrium well above its pre-pandemic floor but well below its 2021 ceiling. The next several months of annualized readings will be a critical indicator.

© 2026 donfenley.com

This report is a combination of human and AI research and analysis

Categories: REAL ESTATE