Pending home sales down 28%
GRAY, Tenn. – Tri-Cities area pending sales continued declining for the sixth straight month in October. Sellers accepted 683 new contracts, down 116 from September and 272 fewer than September last year, for a 28.4% decline.
Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family homes and condominium sales in the region monitored by the Northeast Tennessee Association of Realtors (NETAR). Since resales go under contract 30 to 60 days before they close, accepted contracts offer insight into home sales’ direction.
“Last month’s pending sales were at the same performance level as they were in 2018,” NETAR President Rick Chantry said. “There’s no question that we’re still in a seller’s market, but higher mortgage rates have tapped the brakes on sales growth and flattened prices.” And increasing numbers of sellers have reduced their asking prices to lock in contracts. This looks and feels like a more traditional seasonal market, he added.
At mid-month, the region had 1,367 properties on the market – 17 more than the previous month. At the end of October, the area had a 1.7-month inventory of homes on the market for sale, unchanged from September. That’s the time it would take to sell everything on the market at the current sales pace. “Inventory has increased at a snail’s pace,” Chantry said. “We have had less than two months of inventory for 23 months, and the last time we had balanced market conditions was the first quarter of 2018.”
The typical home sold in August was on the market for 48 days before it closed. That’s up one day from September and the eighth monthly increase this year. However, it is still three days less than it was this time last year. Time on the market is a demand indicator. When it increases, demand is softening. When it declines, demand is rising.
Typically sales slow during the holiday season and inventory is flat. After that things begin to change as sellers start their marketing strategies for the spring peak buying and season.
The current outlook for 2023 is similar to what the region has experienced since April. The 2024 outlook is for a more robust market.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,600+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us