August’s Home Sales Report made an on-the-surface glaring contradiction. It said there were signs that the market was beginning to come off the sizzling pace it has been on since June last year. But it also said August’s prices were at an all-time high and that closings were just shy of breaking the record high set September last year.
Do we need to take a breath and relax, or buckle up for more wild housing market rides?
Like many markets across the nation, the local market is slowly shifting toward more balanced conditions. But it’s happening at a snail’s pace. In fact, unless you’re closely tracking monthly data, you may not notice a lot of difference for now.
If things continue as they have been going for the past few months, inventory will improve enough to further mute some of the market frenzy. Here’s how that’s measured. New listings will outnumber pending sales as they have for the past three months. And the time a listing stays on the market will continue slowly increasing. That will lift the number of months of inventory off rock bottom. Since May, it has increased to 1.6 months from 1.3 months. During the same period, the time a listing stays on the market increased to 49 days from 47 days. When the number of days increases is means demand is softening. When they decline, it means demand is picking up.
Another way to look at it is by tracking what the hundreds of economists and real estate professionals participating in the Home Price Expectation Survey think will happen in the long term.
The current outlook is for home prices is to appreciate 6 percent this year. The local market is on track to do better.
Here’s the outlook appreciation beyond this year: 2022 – 4.5 percent; 2023 – 4 percent; 2024 – 3.6 percent; and 2025 – 3.5 percent.
The local market will see better annual appreciation this year because the average price trend is already up 21.7 percent for the first eight months of the year. A surge of expensive homes has skewed that average. No one knows how long the top end of the market will be in the limelight, but one thing is certain. The market has moved the local historic home sales sweet spot from $200,000 into the $250,000 to $350,000 price range.
The best way buyers, sellers, and investors can track what’s happening in the local market instead of what they hear and read in mass media is to go local trusted sources. That means developing a good working relationship with a local professional REALTOR® and keeping up with NETAR’s local market reports. The monthly reports include the Home Sales Report, The Commercial Real Estate Report, and the Pending Sales Report. And every week there’s a brief Market Pulse feature that zooms in on a specific local issue. All the reports can be found on the NETAR website at www.netar.us
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 1,500 members and 100 affiliates. Pending sales, Trends Reports, and the regional market analytics can be found on the NETAR websites at https://netar.us/voice-real-estate-northeast-tennessee