November 29, 2017

NE Tenn. pending home sales see another double-digit increase

October was the second straight month of double-digit increase for both new and active pending home sales in Northeast Tennessee.

"Sales are seeing a holiday boost as we approach the end of the year," Northeast Tennessee Association of Realtors® (NETAR) President Eric Kistner said. Last year new pending sales were up 11% in October. This year they're up 21%.

The number of new contracts accepted last month was 725, up 28 from September and up 128 from October last year. When added to accepted contracts that have not closed, it moved the active pending sales total to 995, up 40 from in September and 214 more than October last year. Pending sales typically move to closing in 30 to 45 days, and it's not unusual for 4% to 5% of those contracts to fall through.

Kistner said it's normal to see a bump in fall sales for a number of reasons. “Aside from tax and relocation issues, some sellers typically come off their asking prices to get a deal before the end of the year,” he said.  That was evident when you look at October's average sales price as a percentage of the average listing price. It has declined by 1% a month since peaking at 97% in August.

Kistner said the fundamentals of the market remains sound. Employment reports are positive, and the private sector wage growth in the three-county Johnson City Metropolitan Statistical Area are being boosted, confidence that the local and national economies are growing.

"While the inventory is still tight, new listings were up 16% in October," Kistner said. And the average listing price was 9% higher than last year.

"Activity in the new home sector is especially encouraging," Kistner said. It tends to increase the value of existing homes at the same time it stimulates increased listing in the resale market.

NETAR's November Tends Report on closings and average prices for the 11 counties and seven city markets it monitors will be available in mid-December.