December was one of the best-ever months for the local housing market, and it closed the books on one of the best-ever years for sales and price heights.
“It was a year that careened from fears over a world-wide pandemic and the worst economic crash since the Great Depression to the busiest, most productive year local real estate professionals can remember. Brokerages and lenders added staff and scrambled to keep up with demand. At the same time, the Northeast Tennessee Association of REALTORS® (NETAR) membership rose to a new high,” said Kristi Bailey, 2021 NETAR President. “Much of the economy is still struggling, but the housing numbers are eye-popping.”
Home sales and prices posted double-digit gains last month. Annual closings were knocking at the door of the 9,000 sales level, and the total resales volume broke the $2 billion mark for the first time. Those are just a few examples of 2020’s housing legacy. There were 796 closings in December. That’s 34.2% better than last year. The average sales price of $210,197 is up 19.5% ($34,258). There were 8,994 sales during 2020, up 8.4% from 2019. The annual average sales price of $202,068 was up $23,257 (13.01%) from 2019.
The market began last year on the heels of a record-setting year in 2019 with a firm footing. Sales were up a little over 17%, and prices were up almost 4%. The market experienced some typical seasonal softening in February. By mid-March, the first wave of COVID-19 awareness began taking hold. Sales waffled then slid into a sharp two-month decline when the economy shut down. Unlike other parts of the economy, home sales make a sharp V-shaped recovery in June with a 12.2% increase. During July and August, housing sales were on the rise. By September, the market gains rocketed into double-digit percentages for price and sales and stayed there. During those final months of the year, the market recouped then surpassed all other sales and price-performance benchmarks on record.
Record lows were also set in 2020. The median time on the market for 2020 was 63 days compared to 73 in 2019. The median is the point where half of the homes sold in less time and half sold more. The time homes spend on the market before selling. Inventory was a challenge for both buyers and their agents all year long. In December, the region had a 1.9-month supply of homes on the market – half of the previous last year. The annual inventory was 2.8 months, down a third from the prior year. December’s active listings were down 48.3% from last year, and the annual listings total was 9.4% less than it was in 2019.
Outlooks are for similar market conditions this year, but at a slower pace as buyers contend with mortgage rates and price increased, creating affordability challenges.