By KRISTI BAILEY
Northeast Tennessee’s home sales continued to struggle in May, but indicators point toward a pivot to a recovery phase. There were more closing than there were in April but 158 fewer than May last year, but that is only half the story.
The other half of the story is pending sales. It is the only leading indicator in the Northeast Tennessee Association of REALTORS® (NETAR) Trends Report. It is a leading indicator because it takes anywhere from 30 to 60 days for an approved contract to close.
Last month sellers accepted almost 900 new contracts. When you add that to those already in the pipeline, we have 1,400 deals moving toward closing in June and July. This time last year, there were 950 pending sales.
There’s no way around the fact that the economic fallout from the coronavirus has crimped home sales. Housing market analysts and economists, like the National Associations of REALTORS’® (NAR) Chief Economist and Vice President of Research Lawrence Yun, have predicted a surge in the market as the economy reopens. Yun said he thinks the recovery will be quite robust. Some, who are looking at 2021 and beyond, are beginning to talk about the Roaring 2020s for Housing.
For sellers, today’s market is a great time to list because they are getting better prices. The average listing price has increased by $42,200 (17%) since this time last year. Last month’s average sales price was up $6,902 from last year. So far this year, the average is 5.7% higher than it was during the first five months of last year.
It may sound a little strange, but the biggest holdback in today’s market is lack of inventory. In May, the region had a little over three months of inventory and shrank a little more this month.
According to REALTOR® Property Resource (RPR), there have been 3,399 new listings so far this year. In May, there were 200 more than they were in April. It wasn’t enough to keep up with demand. The active inventory for our region is down 32.7% from what it was May last year. It is the tightest local real estate professionals have ever seen.
Expect demand for houses up to $399,999 to be strong throughout the summer and early fall. The best advice for buyers is to partner with a local REALTOR® who can notify you as soon as homes hit the market. Be prepared to move fast. Get pre-approved, so when you find the perfect dwelling place, you are ready to make an offer before it goes under contract with someone else.
NETAR is the voice for real estate in Northeast Tennessee. It’s the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,200 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.