By Mark Hite, President
Greater Chattanooga Association of REALTORS®
August is generally thought of as the end of the Summer selling season, as children return to school and fall arrives, the Greater Chattanooga housing market is showing no signs of “cooling” down.
This August, residential home sales were flat to last year, with a +0.2% increase. Keep in mind that this same month last year was the largest August sales month Chattanooga had experienced--so to be flat is an accomplishment. Year-to-date the market is standing at +1.1% to last year, which falls in line with early predictions.
Taking a closer look at sales data, it is particularly important to note that the region had a -23.5% decrease in the amount of residential units that were available for sale in August 2017 versus the same time last year. Area REALTORS® produced the same sales result with significantly less product to work with.
These strong sales, paired with decreased inventory, pushed the Months’ Supply of Inventory (MOS) down to 3.8 months. This represents a -24% reduction to last year’s figure and is consistent with last 7 months MOS.
Less inventory and consistent sales sent the Days on Market (DOM) plunging to 50 for August, which is a -13.8% reduction to last year’s 58 days and the year to date DOM stands at 60 vs. 67 for the first eight months of 2016.
It’s not hard to understand why prices continued their march upward as sales remained strong on less inventory. This August, the Median Sales Price increased to $178,450 which is +7.5% over last year and the Average Sales Price increased to $212,324 which is a +6.3% increase. Year to date, the average price of a home in the Chattanooga region stands at $209,432.
There are several factors which give clues to what future months of home sales may look like. The first category to consider are pending sales. These are sales contracts which have been written but have not yet closed. The number of pending contracts from August were down slightly from 2016, coming in at -1.0%. This is in line with the year-to-date number of contracts written, which is up +1.3% over the first eight months of 2016. This is a good sign that home sales should continue at near record levels and remain flat to last year over the next few months.
The other item that gives a clue to future sales results are the number of new listings coming to market. In this category, we saw a decrease of -9.4% compared to 2016, which is slightly weaker than the YTD trend of -7.4%. In the future, the reduced levels of inventory will push sales downward, but it does not look to be in the next few months--based on the year-to-date trends.