Housing market information that’s local, local, local is critical
Jan Stapleton - 2023 NETAR President
The local housing market is sending mixed signals as it eases into the prime home buying and selling season. The Northeast Tennessee Association of Realtors® (NETAR) March mid-month update shows 13 more sales than the first of the month count. The median price was $1,400 higher. The mid-month update is 667 closings, and a $237,900 median existing home sales price.
While sales are clearly settling into the same pattern we saw in the two years before the pandemic, prices are not as predictable. So far this year they’re 5.7% higher than last year. They have been in the $200,000 to $250,000 range for the past 14 months, fluctuating from a high of $250,000 to a low of $210,000.
A lot of what prices do in the second and third quarters depends on mortgage rates – they are currently declining – and inventory – it’s increasing at a snail’s pace. So far, some sellers have locked last year’s prices into their expectations. At the same time, buyers are becoming less willing to pony up higher prices.
Step back from the local scene and the picture gets even more fuzzy. Prices are declining in the west but holding steady to increasing in the south. Here’s what some of the top experts and firms are predicting.
- The National Association of Realtors’® (NAR) outlook is US prices will climb 1.7% by year’s end.
- CoreLogic thinks prices will be up by 3.7%.
- Moody’s Analytics expects prices to decline by 4.2%.
- Zillow thinks prices will increase by 0.5%.
What this shows is all the buzz about a price correction is fizzling out in all but some select major markets. Here’s how the regional market performed. The February-to-March price change was down to 0.8% in the NETAR region. It was down 0.9% in the Knoxville metro market and down 1.4% in Chattanooga.
The bottom line is the local market’s prices are doing better than what the experts are seeing. That shouldn’t surprise anyone. All real estate is local and local market conditions don’t necessarily line up with the US patterns or outlooks.
That’s a clear message to local buyers and sellers: Don’t depend too much on what broadcast news readers or headline writers are saying. And if they’re surfing the internet for real estate market information, they need to check and double check what they find with reliable sources.
One of the best tools in the home buying and selling toolbox is the comparative market analysis (CMA). A professional Realtor® will use this tool to give his or her clients the most current home buying information available. What it involves is comparing the target home to what comparable homes in the immediate area are selling for. Comparable gets picky in a good CMA. We are talking about the same size house, same number of bedrooms, same number of bathrooms etc. Obviously, there’s always some differences, but the basics must line up for an apple-to-apple comparison. One thing a good CMA will show is the sweet spot that closes the deal.
One telling trend that we’re watching at NETAR is the listing vs. the sales prices. So far, sellers have not come off their initial listing prices. Last month, the median list price dropped from a record high of $306,955 in February to $300,000. Most sellers who accepted offers last month didn’t get their asking price. Some discounted to lock-in the deal, but the percentage of those discounting and the amount of the discounts has declined since the first of the year.
Savvy buyers and sellers will double down on real estate market information that local, local, local during this challenging prime buying and selling season.
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 1,800+ 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