As the outside temperatures start to dip and we look towards the fall, we usually see housing activity begin to slow a bit. But as we all know, this year has been far from normal. While there’s still uncertainty on what effects any seasonal resurgence of COVID-19 may have, the healthy housing demand we see today will create significant tailwinds in the near term. It remains a great time to get into the housing market, especially for sellers. As the numbers show, it’s a seller’s market.
In September, showings and pending sales remained at healthy levels, while housing inventory remained limited and the competitive bidding market continued.
Multiple offer situations remain a frequent experience in many markets, including ours. With the inventory of homes for sale still lower, a fast and competitive market for buyers doesn’t show signs of slowing down. With the stock indexes at or near record highs as mortgage rates remain near record lows, signs point to a busy fall housing market.
New Listings in the Chattanooga region increased 1.8 percent to 1,152, which hovers just higher than the 12-month average of 1,102. While Pending Sales were down slightly from August, compared to 2019, they are up 33.3 percent to 1,134. Closed Sales were up 27.9 percent to 1,152.
As we’ve seen each month in 2020, Inventory levels shrank again in September by 52.3 percent to 1,468 units. Thus, it’s no surprise that Days on Market also was down 20.4 percent to 39 days. Sellers were encouraged as Months Supply of Inventory was down 57.1 percent to 1.5 months. For perspective, I quote Dr. Lawrence Yun, Chief Economist for the National Association of Realtors who says, “To have a balanced market where there are enough homes for sale to meet buyer demand, the market needs inventory for six months.”
Considering the inventory situation, it’s no surprise that Prices continued to gain traction in September. The Median Sales Price increased 14.5 percent to $239,450. The Average Sales Price increased 12 percent to $274,319. Some bit of comfort in rising home prices is that the Housing Affordability Index for Greater Chattanooga is up slightly from August to 135. This index measures the median household income necessary to qualify for the median-priced home under prevailing interest rates. The higher the number, the greater affordability.
While mortgage rates remain near record lows, The Mortgage Bankers Association reports that lending standards are tightening, which makes it a bit more difficult for some buyers to qualify. At the same time, unemployment remains substantially higher than a year ago due to COVID-19. Despite all this, buyers are out in full force this fall, showing amazing resilience in the middle of a pandemic.
Using a realtor is your best bet for navigating the current housing market. We have the latest tools and access to market data to serve the homebuying needs of our community. That’s Who We R.