News
July 29, 2017

May home prices up, sales move at brisk pace

Home sellers had reason to smile in May. The average sales price increased for the ninth straight month. Sales were also brisk, and the five-month market trend looks solid as the market moves toward the mid-year point.

"Prices were 4.3% higher during the first five months of this year than last year. That is an average increase of $6,634," said Northeast Tennessee Association of Realtors (NETAR) President Eric Kistner. Last year's annual price increase was 2.3%.

According to NETAR's Trends Report, there were 613 closings on single-family home sales last month, 21 fewer than May last year. The average sales price was $167,468, up $2,713 from last year. During the first five months of this year there were 2355 closings, 91 more than the same period last year.

Sales of 55 townhomes or condominiums closed with an average sales price $120,539. Townhome and condo sales were up 26.1% during the first five months of the year, and the average sales price is 7.9% higher.

Kistner said "the sales trend is tracking what we saw last year. Year-over-year closings are showing some intermittent volatility, but that is more of an issue with closing rates than actual market performance." Some of the slowing is due to more pending sales with contingencies. A contingency is a provision in a real estate contract that specifies the contract would cease to exist upon the occurrence of a certain event. For example, "This contract is contingent upon Buyer successfully obtaining a mortgage loan at an interest rate of 4.5% or lower." Should rates rise quickly, and this rate not be available, the contract would end. At the same time, mortgage rates remain competitive, and lenders are eager to lend to qualified buyers. Consumer confidence is high and according to agents so is client traffic.

"The pending sales inventory is higher than last year, but the rate those accepted offers move to closing has slowed," he said. Pending sales typically move to closing in a month to six weeks, and it is not uncommon to see 4% of them fall through. During the past two-and-a-half years an average of 65% of active pending sales move to closing each month. During the past two months that has dropped to 50%, he added.

New listings are 1.5% below what we saw for the first five months of last year, and the average listing price has increased 8.7%. "In May, we had six months of inventory."  That is the real estate rule of thumb for normal market conditions, but the local norm was more like a nine to 10-months before the market began tightening up last year, he added.

The average single-family home sale that closed in May was on the market for 133 days. "It was the lowest time on market we have seen since before the recession," Kistner said. "And that is just the average. Aggressively priced homes are selling much faster."  The average townhome sold in May was on the market for 161 days.

Here's a capsule look at how city and county year-to-date single-family sales and average prices looking in May compared to the first five months of last year.

CITY MARKETS:

Johnson City – 300 sales, down 8. $230,009, up $20,203

Kingsport – 268, up 34. $164,824, up $20,172.

Bristol, TN – 113, up 14. $126,706, up $4,198.

Bristol, VA – 76, up 21. $110,239, up $1,922.

Greeneville – 73, up 2. $133,276, down $17,015.

Erwin/Unicoi – 68, down 5. $168,542, up $35,011.

Elizabethton – 60, down 13. $121,175, down $55.

COUNTY MARKETS:

Sullivan – 687, up 51. $157,004, up $6,781.

Washington, TN – 627, unchanged. $205,973, up $10,966.

Greene – 243, up 5. $143,353, down $1,201.

Hawkins – 212, up 12. $137,179, up $22,007.

Carter – 201, up 22. $133,264. $133,264, up $5,393.

Washington, VA – 163, up 8. $166,122, down $906.

Wise – 58, down 18. $98,742, down $2,364.

Scott – 48, up 16. $103,941, down $29,468.

Johnson – 36, down 6. $111,340, down $22,217.

Lee – 14, up 7. $75,353, down $29,510.

NETAR counts city sales as those in the high school zone for each of the 11-county region it monitors. City sales and price data are included in the county totals.

 

 

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