By KRISTI BAILEY
The buzz in the real estate industry is Coronavirus has shifted this year’s peak spring buying and selling season to the summer. Local indicators are pointing that way.
One key indicator is April’s pending sales. At month-end, 688 new contracts were awaiting closing. That is not as many as last year when home sales were rapidly moving toward another record. While the monthly raw pending sales count is down from last year, it is only slightly softer than the 12-month trend. By mid-May, new contracts were almost at the April total.
REALTORS® are also noting that traffic is increasing as consumers are coming out of their stay-at-home mode, and falling interest rates continue pulling buyers back into the market.
The average time on the market for single-family detached resales is also a positive factor. It was 109 days last month, which is a 12-year low for our market. For townhome/condominium resales, days on the market dropped to 90, down from 157 April last year. Combine time on the market with only three months of inventory, and you get a competitive sellers’ market.
April’s median listing price was $199,900, up 13.6% from last year. Bargain hunters who were out during the early stage of the COVID-19 driven economic contraction and expecting price drops were disappointed. On-average owners who closed sales in April saw a 3.3% increase over March’s average price and a 14.9% increase over April last year.
Mortgage demand is increasing according to the Mortgage Bankers’ Association, and purchase loan originations are beginning to nibble away at the upsurge of refinancing that started late last year. David Hamilton, president of the Tri-Cities Mortgage Bankers’ Association, is seeing an increasing number of instances of buyers finding the home they want to buy. But by the time they are qualified, it has been sold. That’s why it is critical for buyers in this type of market to get pre-approved before making an offer. Another factor to consider is while mortgage rates continue heading for the basement – lenders’ requirements.
Web traffic for both residential and commercial real estate listings is also picking up. That is a signal that there’s pent-up demand that waiting for the right conditions.
What all of this reaffirms is the resilience of the local housing market. We cannot ignore the economic effect of COVID-19. The housing market and the job market are closely linked, and the virus has hammered the job market. There is one economic realism that has been proven over-and-over – the housing market typically leads the economy out of bad times.
All of this illustrates why buyers and sellers partner with a local, professional REALTOR®. It’s a crazy market out there, and it looks like the pace and competition will heat up with the summer season. That means those who have partnered up with a REALTOR® have the edge because REALTORS® are experts on local market conditions. They have access to private databases on local market conditions and the industry conditions to help make things happen.
NETAR is the voice for real estate in Northeast Tennessee is the largest trade association in Northeast Tennessee. It represents over 1,300 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.