Tuesday, June 15, 2021 - by Robert Backer, president, Greater Chattanooga Realtors
As the weather warms and COVID restrictions ease across much of the country, the U.S. housing market shows little sign of cooling. You might think I’m starting to sound like a broken record, but robust buyer demand, fueled by low mortgage rates, continues to outpace supply, which remains near historic lows. Nationwide, inventory remains much lower than it was at this time last year, and sales prices are surging as a result.
With such a limited supply of existing homes to purchase, all eyes are on home builders to provide a much-needed boost of inventory to the market to help meet buyer demand.
However, increasing material and labor costs, along with supply chain challenges, have contributed to significantly higher construction costs, with builders passing these costs on to homebuyers. And while the warmer temperatures, rising sales prices and the reopening of the economy may draw more sellers to the market, historically low levels of homes for sale are likely to continue for some time.
For May, New Listings in the Chattanooga region increased 3.0 percent to 1,280. Pending Sales were down 4.8 percent to 1,143. Inventory levels shrank 58.4 percent to 934 units. For comparison, May 2020 saw 2,245 properties for sale.
Prices continued to gain traction. The Median Sales Price increased 17.6 percent to $260,000. Again, in May 2020, the Median Sales Price was $221,000. That’s an increase of $39,000. Days on Market was down 47.6 percent to 22 days. This data point calculates the average number of days a property is on sale before it is under contract. In May 2020, 42 days, a full 20 days longer than last year. Sellers were encouraged as Months Supply of Inventory was down 64.0 percent to 0.9 months.
I’ve said it before, but this hot market shows little signs of cooling off anytime soon. When properties are being sold so quickly, it is absolutely crucial to work with a realtor who knows the ins and outs of this market. Realtors help their clients work fast to get the home they desire. That’s Who We R.