News
January 22, 2019

New pending home sales decline 15.8%, active contracts increase

December’s single-family residential pending sales declined from November’s total as expected. At the same time, there was a slight increase in the number of active-pending sales, so there are more contracts moving toward closing in January.

Pending sales are forward-looking indicators based on new contract signings reported by Realtor Property Resource (RPR).

There were 473 new approved contracts in December compared to 561 in November (a drop of 15.8%) and 842 active contracts in December, up from 830 in November. “Lower mortgage rates balanced the traditional slower holiday season sales, but the current government shutdown will have some affect on the number of January closings,” said NETAR President Karen Randolph. “During the early part of the shutdown, there were issues with lenders getting Internal Revenue Service (IRS) salary confirmations for borrowers. Delays with U.S. Agriculture Department (USDA) loans will likely have more impact on local closings since USDA is a primary local mortgage lender. However, since all-cash sales have been accounting for 25 to 30 percent of local sales, it is likely many of the approved contracts will not be affected by the shutdown,” she added.

A sale is listed as pending or contingent when a contract has been signed, but the transaction has not closed. Sales are typically finalized in a month or two after signing. It is not uncommon to see as many as 5 percent fall through. Lately, the fall-through rate has been higher due to more sales of a current homes and financing contingencies.

NETAR, 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. Pending sales, monthly Trends Reports and the regional market analytics can be found on the NETAR websites at https://netar.us/voice-real-estate-northeast-tennessee .

 

 

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