May’s home sales made a slight bounce from April but continue to be gripped by the coronavirus economic fallout. There were 569 closings in May, up 4.7 percent from April, but down 21.7 percent from May last year, according to the Northeast Tennessee Association of REALTORS (NETAR). May’s average sales price was $184,593, up 3.9 percent from May last year.
“Market activity is picking up,” NETAR President Kristi Bailey said. “Sellers accepted almost 900 new contracts that are moving toward closing in June and July. And there were 220 more new listings than there were in April, but it wasn’t enough to keep up with demand.”
The Mortgage Bankers Association (MBA) is reporting that applications for home purchases have increased for five consecutive weeks. Government purchase applications (FHA, VA, and USDA loans) are now 5 percent higher than a year ago, according to the MBA.
“The local market continues to struggle with the lowest inventory real estate professionals can remember,” Bailey added. “Area-wide there were barely three months of inventory on the market in May. And in some city markets, it was closer to two months. Six months of inventory is considered balanced housing market conditions.”
Single-family resales accounted for 533 of May’s residential closing, an increase of 32 from April but 131 fewer than May last year. The average sales price of $188,265, was up $5,887 from last year.
Thirty-six townhome/condominium sales closed in May – six fewer than during April and 27 fewer than last year. The average sales price was $130,229, an improvement of $1,938 from last year.
The average single-family sale that closed in May spent 111 days on the market. The average townhome/condo resale was on the market for 74 days.
The six-month trend shows closings are lagging the first half of last year by 9 percent while the average sales price has increased by 5.8 percent.
Looking ahead, as new pending sales for the local market rose in May, experts anticipate more significant growth in June and July. There were 881 new contracts at the end of the month – an upturn from 663 at the end of April and 12.3 percent higher than May 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) Trends 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.
“By mid-June, REALTORS were seeing increases in consumer traffic and closings were also picking up,” according to NETAR President Kristi Bailey. “The most substantial problem holding the local market back is lack of inventory. Prices are up, interest rates are at record lows, and buyers are ready to buy,” she added.
Active listings at the end of May were up 430 compared to a year ago, and the region had three months of inventory. There were 821 new listings – a decline of 346 from last year’s total. May’s median listing price ($209,900) was up 14.7% from last year, while the median sales price ($159,450) was up 2.9 percent.
NETAR’s Trends Report reflects housing market conditions in Carter, Greene, Hawkins, Johnson, Sullivan, Unicoi, and Washington counties in NE Tenn. and Scott, Lee, Wise, and Washington counties in SW Virginia. It also includes market data from the region’s major city markets.