By KRISTI BAILEY
It is ironic that during a pandemic and when the economy is in a recession, it’s one of the best times in years to sell a home.
Here are just a few reasons what the Northeast Tennessee market continues to be in a seller’s favor.
1 – Buyer demand is at record highs
Local home sales posted new records in June and July. The forward-looking pending sales indicator suggests they will not slow down much, if any, in August and September. National and local sales outlooks improved due to data that shows demand is increasing. Last year the Tri-Cities market saw a 6.5% annual sales increase. July’s numbers point to at least a 4% increase, and that percentage is expected to rise with strong closing performances in August and September.
2- Home inventory remains low
We have had a hot market for four years, which has consumed the excess inventory. An insufficient supply of homes for sales caused unstable market conditions last year. And so far, this year, inventory is almost half of what it was last year. New listings are coming on the market, but are getting snatched up in record time. Each month’s sales have been at or above the number of new listings. So inventory numbers are still declining. According to the Northeast Tennessee Association of Realtor’s Home Sales Report, July’s inventory was 42% lower than last year.
3 – Home prices are up
Many sellers have and continue to get top dollar in the current market. July’s average residential resale price for a single-family home was $202,074, 7.3% higher than last year, netting the average seller an extra $13,822. Some thought the housing market would take a hit, and home prices would drop because of the pandemic, but the opposite has happened. Price growth is higher now than it was before the virus.
4 – Mortgage interest rates have never been lower
Since the first of the year, the rate for a 30-year fixed-rate mortgage has dropped from 4.51% to 2.93%. This drop can save the average homeowner almost $150 a month on a $200,000 home.
5 – Homebuyers’ needs have changed
People have been spending more time at home. Many are working from home. And according to a recent Pew Research analysis, a record number of young people—a jaw-dropping 52%—are now living with their parents, even beating out figures recorded during The Great Depression. That has made many people look at their homes and acknowledge that it no longer meets their needs.
6 – The sales pace has picked up
The time it takes to sell a house and declined. Currently, the median number of continuous days a home is on the market before selling is 57. That means half of the sales are made faster, and half take more than 57 days. That’s the best time- on-market number for the Tri-Cities region since NETAR began tracking it for its Homes Sales Report.
What we are experiencing now is the best seller’s market local real estate professionals can remember. Given current conditions, it will continue into next year. Whether or not the price appreciation will continue in the 7 to 8% range is anyone’s guess. Sooner or later, buyer fatigue and tightening loan standards will likely cool things down. But before that happens, a professional local REALTOR® knows how to track the best opportunities the market is offering and how to help their sellers take advantage of them.
NETAR is the voice for real estate in Northeast Tennessee. It’s 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.