April continued the hot-housing streak for local home sales another month. This busy spring market continues to see many multiple offer situations driving sales prices above asking price. By the time a sale closes, the market may have already moved higher than that sold price suggests.
This type of market can create stress and frustration for prospective homebuyers, who are frequently having to submit offers on multiple properties before they are able to secure a purchase. While housing affordability remains an area to watch as prices continue to rise, strong buyer demand and limited housing supply show no signs of easing soon, pointing to a continuation of this market trend through spring and into summer.
Recently, Dr.
Lawrence Yun, chief economist of the National Association of Realtors observed that while the housing inventory shortage has been pushing up prices, it’s also holding back home sales. In nearly every market, 20 percent more inventory would mean 20 percent more home sales. Nationally in March, there were 1.74 million housing starts, which is the highest in 14 years and very welcome news in light of the persistent inventory shortage.
Dr. Yun also mentioned that a new home construction surge is highly needed, especially in light of major challenges on material costs and soaring lumber prices. As I mentioned last week, the National Home Builders Association on behalf of 35 organizations, including the National Association of Realtors®, wrote to Commerce Secretary Gina Raimondo urging the Biden administration to “undertake a thorough examination of the lumber supply chain and seek remedies that will increase production.”
Locally for April, New Listings increased 27.3 percent to 1,245. For reference, in April 2020 (at the beginning of COVID), there were only 978 newly listed properties. Pending Sales were up 60.1 percent to 1,250. Inventory levels shrank 66.0 percent to 820 units, compared to 2,409 in April 2020.
Prices continued to gain traction. The Median Sales Price increased 16.9 percent to $252,500. Days on Market was down 54.0 percent to 23 days. Sellers were encouraged as Months Supply of Inventory was down 70.4 percent to just 0.8 months, compared to the 2.7-month supply a year ago.
In short, there’s not much inventory, and what inventory is available is moving very fast. For perspective, a normal or balanced real estate market is one with a four- to six-month supply (or 120-180 days), and Greater Chattanooga hasn’t seen that scenario since 2011.
As I often say, the current market conditions only reinforce the need for buyers and sellers to utilize the knowledge and expertise of a Realtor. No matter the market, and no matter the circumstances, Realtors go above and beyond to serve our community. This market is competitive, and Realtors work tirelessly for their clients, day in and day out. That’s Who We R.