The March housing numbers didn’t follow suit with the early coronavirus pandemic drama from other parts of the economy. In fact, sales and prices were pretty much what was expected. And things were anything but slow.
The last half of the month saw a lot of confusion, but most of it focused on how to show homes and adhere to CDC guidelines. That slowed some aspects of buying and selling a home – but the local housing market is not on lockdown.
At month’s end, there were 54 fewer closings than March last year, and first-quarter sales were 0.5 percent better than last year. It was basically the same pattern we saw last year. And prices were stable. In fact, they were 7.6 percent better than Mach last year and 3.4 percent higher during the first quarter last year.
But there’s no way around the fact that the pandemic will depress sales during the spring buying and selling season. We won’t see the big picture of that effect until later this summer.
But for now, real estate is still happening. One way to illustrate March’s performance is to look past closings and to pending sales. They are essential because, unlike most other data, they are forward-looking.
Owners accepted 798 new contracts last month. That’s 21 more than February.
Another telling metric is the market’s absorption rate. I know. That sounds like something only a data nerd would like. It’s one of the two ways real estate professional look at inventory and the rate it’s selling. And March’s numbers illustrate just how busy things were.
The most common describer is months of inventory. It describes how long it would take to sell everything on the market at that month’s sales rate. The absorption rate is the percentage of inventory sold in a month’s time. Yes, they’re the same thing expressed from a different perspective.
During March, the Tri-Cities region had 3.7 months of inventory. The absorption rate was 27 percent. That’s how much of the March’s inventory sold that month.
But that’s a regional number, and real estate is hyper-local. Here’s what it looked like in the area’s primary city markets.
Bristol, TN – 2.2 months of inventory and – 48.8 percent absorption rate.
Bristol, VA. – 3 months of inventory – 33.3 percent absorption rate.
Elizabethton – 2.7 months of inventory – 37.7 percent absorption.
Erwin – 1.1 months of inventory – 90 percent absorption rate.
Greeneville – 3.6 months of inventory – 21.7 percent absorption rate.
Johnson City – 2.1 months of inventory – 47.3 percent absorption rate.
Kingsport – 3.3 months of inventory – 30.5 percent absorption rate.
Those rates will probably slowdown in the coming months. Here’s how the National Association of Realtors® (NAR) Chief Economist Lawrence Yun describes the situation. “Home sales will decline this spring because of unique economic and social consequences resulting from the coronavirus outbreak, but much of the activity looks to reappear later in the year.”
That’s an accurate description of what’s happening in the Tri-Cities.
Meanwhile, local REALTORS® – all real estate professionals – are innovating and adapting to the conditions to keep up with the market and deliver the professional services their clients expect. Builders are building. Appraisers are appraising. Home inspectors are inspecting. New listings are coming on the market. Accepted contracts are being closed.
NETAR is the voice for real estate in Northeast Tennessee is the largest trade association in Northeast Tennessee. It represents over 1,300 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. Pending sales, monthly Trends Reports, and the regional market analytics are available on the NETAR website at https://netar.us/voice-real-estate-northeast-tennessee.