By Mark Hite
President, Greater Chattanooga Association of REALTORS®
Area REALTORS® closed 566 residential units compared to 596 in the previous year for a 5% decline in sales. This decline in month over month sales follows a record setting year when area home sales increased by 9.9 percent. Area leaders are closely monitoring the “pending sale” category (i.e., number of units under contract but not yet closed) to see whether this is a one-time blip or the beginning of an overall shift.
The root of the decline in home sales can be found in continuing low available inventory. For the month of January, the number of for sale units declined by 21.4% when compared to last year. There were 3,072 homes for sale in 2017 compared to 3,906 for the same period in 2016.
One other indicator of supply and demand is Months of Supply (MOS). The area saw a decrease in this category, which would be expected given steep decline in available units, paired with modest decline in sales. For the month, this shrank to 3.7 Months, a 28% decrease to January 2016.
Prices continued to march upward, despite the decline in sales and inventory. The market hit a new high with an average sales price of $202,894, which reflects a 11.2 percent increase over the previous year. This increase in price along with slightly higher interest rates contributed to a 13 percent decline in overall affordability in the region.
It took the average home 63 days to sell in January, down from 69 days in 2017, which is an 8.7 percent decline. Buyers were quickly reacting to homes which came to market and were priced accurately for the condition.
Given the lack of available inventory, if you are considering selling at any time in the future, now would be a great time to talk to a REALTOR®. They can offer insight into the value of your property to take advantage of this sellers’ market.