It’s no secret that the real estate market is experiencing a much-needed and expected correcting shift. While this “shift” needed to occur to help maintain a healthy real estate market, I believe it’s important to look at some national housing data to see where we are in the big picture. For instance, existing home sales declined nationwide for the eighth consecutive month, falling 1.5% as of last measure, according to the National Association of Realtors, with sales down nearly 24% from the same period in 2022.
Pending home sales also declined, dropping 10.9% month-to-month, exceeding economists’ expectations. Stubbornly high inflation and soaring borrowing costs have eroded buyer purchasing power and have caused the market to cool rapidly this year.
But there might be some good news concerning inflation. A recent report showing that the rate of inflation declined in October is good news for the real estate industry and possibly a bellwether of declining mortgage rates in coming months. Experts will be keeping a close eye on these rates in the following weeks.
While inflation shows some hopeful signs of stabilizing, affordability continues to be an obstacle for buyers and sellers. Mortgage rates have doubled since March, and home prices remain elevated due to a limited supply of homes, although price gains are beginning to slow down. As a result, many homeowners are waiting until market conditions improve to sell, while other sellers are increasingly cutting prices and offering concessions to attract a greater number of buyers.
So how does this national housing data fit in with us locally? In October, New Listings in the Chattanooga region decreased 9.0% to 1,058. Pending Sales were down 30.9% to 808. Inventory levels grew 55.0% to 2,049 units.
Prices continued to gain traction. The Median Sales Price increased 10.9% to $305,000. Days on Market was up 47.1% to 25 days. Buyers felt empowered as Months Supply of Inventory was up 75.0% to 2.1 months. These numbers are refreshing and in fact just show signs of normalcy and stability coming back after the wild ride and frantic growth to our local markets over the past two years.
I had conversations last week with a number of industry professionals while attending the National Association of Realtors NXT conference and will be providing a more detailed account of our time there in next week's article. In short and to not say too much too soon, the common theme in our industry is to get to work and to set our projections to where we were in 2020. The market was good then and the market is good now. The past two years have created an unrealistic expectation to the reality of what we are seeing in today’s market and the buzz in the news is just that, only a buzz. News outlets are continuing to talk of the up and the downs because the real estate market has become as popular to comment on and is monitored by consumers almost as much as the sports and the weather.
The housing market continues to shift every day, which is why it is so crucial to utilize the expertise of a realtor. Whether you’re buying or selling, or moving locally or across the country, realtors have the knowledge and tools needed to make sure you are getting the most out of your investment.