January 30, 2018

Pending sales close year on upswing

Accepted contracts for Northeast Tennessee residential home sales were up in December, but both the new and active pending sales indexes were lower than they were this time last year.

The new pending sales index was 15.4% higher than November while the active sales index was up 16.6%.

Year-over-year comparisons show new pending sales down 8.4% and the active index down 10%. "While one month doesn't make a trend, fewer new and active pending sales than this time last year may signal a moderation of market activity in the beginning months of the year," Northeast Tennessee Association of Realtors (NETAR) President Aaron Taylor said. December's month-over-month gains are typical of buyers and sellers wanting to lock in contracts before the first of the year, he added.

NETAR's Active and New Pending Sales Indices, are forward-looking indicators based on contract signings. Pending sales typically move to closing in a month to 45 days.

Inventory remains one of the biggest market questions.

Taylor said there were 446 new listing in December, 1% better than last year, and a little over 2,620 active listing, down 15% from last year. Another way to gauge the situation is months of inventory, Taylor said. The 11-county region monitored by NETAR had 4.8 months of inventory in December compared to 6.5 months last year.

"The strengthening economy and expectation that more millennials will be in the market are promising signs for the market while putting additional pressure on affordability and inventory levels," Taylor said.

Northeast Tennessee posted its seventh straight year of single-family resales increases in 2017. Last year residential resales were over $1 billion for the second straight year.

NOTE: January's NETAR Trends report will be released during the second week of February.