September 27, 2017

Home sale contract signings continue at brisk pace

Northeast Tennessee home buyers are not paying much attention to the traditional seasonal slowing of the housing market.

There were 722 new contracts on single-family homes in August. While that's seven fewer than July's total when added to those already in the pending sales inventory it brought the August total to 1,020, up 16 percent from August last year.

Eric Kistner, president of the Northeast Tennessee Association of Realtors® (NETAR), said new contract signings have been in the 700 range since March. They peaked in May at 770 and have inched lower ever since. That contrasts what's happening on the national market. According to the National Association of Realtors, ® pending homes sales sank in August for the fifth time in six months. NAR's pending home sales index, a forward-looking indictor based on contract signing, retreated 2.6% in August. The index is now at its lowest reading since January 2016.

Kistner said August's pending sales in the local market were 41.6% higher than there were in January 2016. "The lack of inventory is the biggest thing holding back the local market," he said. There were 19 percent fewer home on the market in the 11-county region monitored by the NETAR Trends Report in August than they were the year before, he added. "And August was the fifth straight month the region had fewer than six months of inventory." Six months inventory is usually seen as the benchmark for normal market conditions; however, the local market norm has historically been nine to 10 months.

 Kistner said he expects to see some seasonal slowing as the market moves from the fall to the early winter season, but barring a dramatic, unforeseen change, it should be a continuation of what has been the strongest housing market since the recession. "Sales continue at almost the same pace as what we saw during the 2016 banner year, and the tight inventory is pushing the average sales price higher." Last year was the first time that previously owned, single-family home sales pushed past the 6,000 mark. It was also the first-time condominium and single-family homes sales totaled more than $1 billion.