Housing market robust even as April sales decline
Northeast Tennessee’s housing market remained robust in April, but with new signs a shift is underway.
Mortgage rates have spiked to their highest level in 13 years, and significant questions about the market’s direction are giving some consumers reason to pause, said Northeast Tennessee Association of Realtors President Rick Chantry. “But even with the uncertainty over inflation, higher mortgage rates, lack of inventory, and higher fuel prices, consumer demand is strong. The market is on a steady footing despite higher rates. New household formations are up, homes are scarce, and even though builders on bringing new homes on the market at a record pace, it’s not keeping up with demand.”
April’s existing home sales were down 2.2% from March, down 6.5% from April last year, and down 3.3% from the first four months of last year. Last month’s median existing-home sales price of $220,000 was down $5,815 (3.5%) from March but 13.7% higher than April last year.
There were 790 closings as of May 4. That’s 18 fewer than March, but the total will increase as deals not processed in time for the early count are added.
So far this year, 2,815 sales have closed. That’s 95 fewer than during the first four months of last year. “From a trend perspective, we’re seeing a flattening of sales and continued price increases,” Chantry said.
The typical home sale that closed last month was on the market for 42 days. That’s the amount of time from when the property was listed until the deal closed. The time on market was 56 days at the beginning of the year and 46 days in March. “That means demand is increasing,” Chantry said.
Another positive is new listings have been increasing since the first of the year. The full impact of those new listings hasn’t added much to inventory since buyers are snapping many of them up as soon as they go public. At the end of April, the region had 1.04 months of inventory. Balanced market conditions are five to six months of inventory.
April sales were down in all but three of the region’s 15 primary city and community submarkets. The median sales price was up in all but three of those markets.
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