Tuesday, January 12, 2021 - by Robert Backer, president, Greater Chattanooga Realtors
Typically, December is one of the slowest months of the year for real estate, but we saw strong buyer demand across most market segments. Near record-low interest rates spurred the demand and swift pace in the face of a new wave of COVID infections and a softening jobs market.
These low mortgage rates and the strong buyer demand in most market segments show that the housing market of early 2021 looks to continue the trends we saw in the second half of 2020. Low inventory and multiple offers on in-demand properties and market segments are likely to remain common. At the same time, the market waits and hopes for a boost in new construction and a surge in home sellers to help provide more balance.
The current climate further demonstrates the importance of utilizing a realtor and their services. In such a competitive market where multiple offers are commonplace, realtors have the knowledge to help guide their clients.
New Listings in the Chattanooga region increased 5.1 percent to 748. Pending Sales were up 25.8 percent to 835, which is a huge amount compared to 664 last December. Inventory levels continued to shrink by 53.1 percent to 1,197 units. For comparison, in December 2019 there were 2,552 homes for sale. This really puts the inventory crunch in perspective.
Prices continued to gain traction as the Median Sales Price increased 11.3 percent to $239,250, compared to $215,000 last December. Days on Market was down 38.0 percent to 31 days. As a reference point, in December 2019, the average Days on Market was 50. This statistic shows how the low inventory and the fast market is helping drive prices upward.
Sellers were encouraged as Months Supply of Inventory was down 57.1 percent to 1.2 months. This smaller inventory is what is leading to the multiple offer situation we currently have in the market. Another interesting statistic is the Average Percent of Original List Price Received. Put simply, this is the percentage of the original listing price that a home ultimately sells for, before any price reductions. This past December, homes sold (on average) for 98 percent of their original listing. Just a year ago that percentage was 95.8. Clearly working with a realtor is helping sellers get the most competitive offers, which helps clients get the most for their property.
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.