New pending home sales see a small increase in March
The economic fallout from the coronavirus pandemic did not have much effect on new contracts for residential resales in March.
There were 798 new contracts (pending sales) at the end of the month, bringing the total number awaiting closing to about 1,000. March’s new pending sales were an increase of 21 from February. The 12-month trend is 14% higher than March last year.
Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family homes, condominium, and townhome resales in the area monitored by the Northeast Tennessee Association of Realtors (NETAR) Trends Report. Since resales go under contract 30 to 60 days before the sale is closed, pending sales typically lead existing-home sales by about two months. The local fall-through/cancellation rate has been as high as 10% recently due to contracts with contingencies. That will likely increase as buyers become more concerned about the economy due to COVID-19.
By mid-April, REALTORS® were seeing a few consumers pulling back, but listing and showings continued, according to NETAR President Kristi Bailey. “We expect to see the first real effects on sales beginning next month. So far, there’s not much pointing to a decrease in prices,” she added.
Active listings at the end of March were down 25.9% from a year ago, and the region had 3.7 months of inventory. There were 806 new listings – an increase of 39 over last year’s total. March’s median listing price ($210,000) was up 16.7% from last year, while the median sales price ($157,000) was up 12.7%.