August pending home sales soften, still on record pace
New pending sales were down in August, but not by much.
There were 962 new contracts (pending sales) at the end of the month – down from 980 in July. The moving average trend for active pending sales was 13.7 percent higher than last year.
Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family homes, condominium, and townhome resales in the area monitored by the Northeast Tennessee Association of Realtors (NETAR) Home Sales Report. Since resales go under contract 30 to 60 days before the sale is closed, pending sales typically lead existing-home sales by about two months.
It’s not uncommon in the current market for a larger than average number of approved contracts to fall through due to contingencies and appraisal issues. But the fall-through rate isn’t enough to dampen another strong month for closings as the market pivots from the summer to the fall buying and selling market.
Although new contracts declined last month, it was still the second-highest monthly total since August last year. The crush the increase has put on the process of moving an approved contract to closing has resulted in most agents writing 45-day contracts instead of 30-day contracts.
Inventory also sank to a new low last month, said NETAR President Kristi Bailey. There were 2.4 months of inventory compared to 2.5 months in July. “It was tighter in the city markets,” she added.
There were 952 new listings last month, down 980 in July. Active listings at the end of August were down 44.2 percent last year.
August’s median listing price ($214,900) was up 14.6 percent from last year, while the median sales price ($180,000) was up 12.5 percent.
NETAR’s Trends and Pending Sales Reports capsule housing market conditions in Carter, Greene, Hawkins, Johnson, Sullivan, Unicoi, and Washington counties in NE Tenn. and Scott, Lee, Washington, and Wise counties in SW Va.