Pending Home Sales Down for the Second Straight Month
New pending sales continued softening for the second consecutive month in September. That hints that while the market is still on a record sales pace, there is a little bit of a seasonal downward trajectory in the works. There were 926 new contracts (pending sales) at the end of the month – down from 976 in August. The moving average trend for pending sales was 14% higher than last year.
Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family homes, condominium, and townhome resales in the area monitored by the Northeast Tennessee Association of Realtors (NETAR) Home Sales Report. Since resales go under contract 30 to 60 days before the sale is closed, pending sales typically lead existing-home sales by about two months.
It is not uncommon in the current market for a larger than average number of accepted contracts to fall through due to contingencies and appraisal issues. That has not dampened another strong month for closings as the market pivots to the fall market. Although new contracts declined last month, it was still the third-highest monthly total since September last year. While the housing market still real hot, contract-t- closing is taking longer. Therefore, agents are writing 45-day contracts instead of 30-day ones.
“Inventory also sank to a new low last month,” NETAR President Kristi Bailey said. “There were 2.3 months of inventory compared to 2.4 months in August. We have had an inventory shortage for a few years, but this is the worst it has been.”
There were 946 new listings last month, down from 1004 in August. Active listings at the end of September were 45% lower than last year.
September’s median listing price ($199,900) was 11% higher than last year but down from August’s $207,400. The median sales price ($180,000) was 20% higher than last year and unchanged from August. It looks like the fall slowdown is not going to be that slow.
Trends and Pending Sales Reports predict market conditions for the housing industry in the areas in Northeast Tennessee and Southwest Virginia covered by members of the Northeast Tennessee Association of REALTOR®.