Housing market enters the fall season of change
GRAY, Tenn. – Later this week, we’ll get our first look at NETAR’s Home Sales Report that shows how the housing market is reacting to the fall season, higher mortgage rates, an increasingly volatile stock market, and the experts’ revision of where things are heading.
There’s no doubt that it’s a season of change, and more than leaves are turning.
Lawrence Yun, NAR’s chief economist, told interviewers last week he expects the annual median home price will rise by only 1.2%. He also expects the current interest rate environment and weaker economic activity will see existing home sales decline 12.2% by year’s end. Looking forward to next year, he thinks home sales will pick up in the second half of 2023 but will be down by 7.1% overall.
It’s important to remember that Yun is talking about U.S. housing sales and prices. He is not recognized as one of the top 10 economists in the nation for making bogus claims. But the hyper-local effect of real estate often means a different set of numbers for local markets.
For example, at the end of August, the typical local median home sales price was at an all-time high. The eight-month trend was almost 20% higher than the first eight months of last year. Even if the local prices made a dramatic reversal, it’s hard to imagine the annual appreciation dropping from 20% to the low single digits. Sales are a different issue. Last month they were down 18% from last year. Still, there’s context to consider. Last year was the hottest sales market real estate officials can remember. To get a better-read compare this year’s sales to 2019 before the effects of the pandemic turned the market upside down. August sales exceeded the August 2019 total by two.
The takeaway is today’s slowing sales are even with what the market was doing before the pandemic.
There’s no doubt that the housing market is undergoing change. So far, the local changes haven’t been very close to what’s happening in the major metro markets. That doesn’t mean some trend reversing changes are out of the question during the last four months of the year.
The best advice for local real estate professionals and consumers is to focus on the local. Those are the only conditions that matter.
NETAR’s Home Sales Report will go public later this week. The following week the Commercial Real Estate Market Report will be ready. Toward the middle of the month the all-import forward-looking pending sales report will be released on the NETAR website. And early every week the Market Pulse reports will segment a separate part of September’s reports for a closer examination. All of these will be on the NETAR web site at www.neatar.us, on the association’s Facebook Page.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,600+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us