April 26, 2018

New pending sales post strong March showing

New pending home sales were robust in March and primed April closing for an equally robust beginning to the  prime real estate buying and selling season.

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 2% higher than February, and 8% better than March last year. That's the best month-over-month growth since August 2016.

Aaron Taylor, NETAR president, said the housing market in the 11 counties monitored by NETAR's Trends Report is off to a strong start with year-to-date single-family resales up 10.6% and average sales price up 10.9%. The PHSI points to that momentum continuing in the short-term, he added.

"So far this year there have been 2,172 new listings. That's down 2% from the first quarter last year. At the end of March, we had 7,520 active listings, which is 16.6% fewer than last year. At the current sales pace that's six months of inventory," he added.

Consumer confidence in both the local and national economy continue keeping demand high, Taylor said. The tight inventory and increasing mortgage rates are not making an appreciable dent in foot traffic, he added.

Contract signings typically increase with warmer weather. There were 843 new approved contracts in March bringing the total pending sales to 1,070. March's new pending sales index was 125.1, up 8% from March last year and the active, pending sales index was 114.5, up 5.7% from March last year. Both indices are benchmarked to the 2015 annual average pending sales totals. A number of 114.5 means a 14.5% increase from the base year.

NETAR's Pending Home Sales Index is a leading indicator for the housing sector based on pending sales of existing homes, condos and townhomes. A sale is listed as pending when the contract has been signed, but the transaction has not closed. Sales are usually finalized in a month or two after signing. It's not uncommon to see as many as 5% fall through.

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.