June 28, 2018

May Pending Home Sales Raise The Benchmark Again

Pending home sales rose to another record level in May as the prime buying and selling season moved into its peak months.

The Northeast Tennessee Association of Realtors® (NETAR) New Pending Home Sales Index (PHSI), a forward-looking indicator based on new contract signing reported by Realtor Property resource (RPR), was up a point from April and 9.2% better than May last year.

"So far this year there have been 4,107 new listings and 3,763 new approved contracts, so we're beginning to see some inventory improvement," said Aaron Taylor NETAR President. "But that doesn't mean those new listings are enough to get things back to normal. In May the region had 4.2 months of inventory. In the prime city markets, it was much tighter." Six months inventory is considered normal market conditions.

There were 876 new approved contracts in May bringing the pending sales total to 1,240.

May's new pending sales index was 131.3 up from 130 in April. The PHSI is a leading indicator for the housing sector based on pending sales of existing homes, condos and townhomes. The benchmark for the index is the 2015 annual average for new approved contracts. A sale is listed as pending when a contract has been signed, but the transaction has not closed. Sales are typically finalized in a month or two after signing. It's not uncommon to see as many as 5% of pending sales fall through.

NETAR is the voice for real estate in Northeast Tennessee - is 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.