January certainly had a strong start for the housing market with significantly increased buyer demand. This beginning is a sure sign of things to come when the traditional homebuying season starts in the spring. Thanks to December’s sizeable uptick in housing starts, signs point towards an active year for new construction, which would give some relief to current inventory concerns. However, higher material costs, especially lumber, and a limited supply of buildable lots might temper the number of new units.
The Mortgage Bankers Association’s January research estimates approximately 2.7 million homeowners with mortgages are currently in forbearance plans. This development is one we should all keep an eye on. Some of these homes in forbearance might eventually come to market. Still, given the strong appreciation in most market segments in recent years, these eventual home sales are likely to be mostly traditional sellers. However, a modest increase in short sales and foreclosures at some point this year would not be surprising.
Locally, New Listings in the Chattanooga region decreased 13.1% to 893. Pending Sales were up 24.8% over January 2020 to 1,057. Inventory levels shrank 61.6% to 956 units. As a reference point, in January 2020 there were 2,489 units.
Prices continued to gain traction. The Median Sales Price increased 14.6% to $235,000, which is $30,000 more than just one year ago.
Days on Market was down 33.3% to 38 days. Sellers continued to be encouraged as Months Supply of Inventory was down 66.7% to 0.9 months.
One statistic that I find particularly interesting is the Percent of Original List Price Received. For January, it was 97.8%, meaning that sellers received 97.8% of the amount for which they originally listed their property. This statistic demonstrates how crucial it is for sellers to have a Realtor helping navigate likely multiple offers and making sure sellers get the most for their property.
All this to say, the low housing inventory indicates this spring could be hot for potential sellers. Make sure to utilize the expertise of a Realtor who will work tirelessly on your behalf. Realtors work with clients all throughout the year to help with their client’s homebuying and selling needs. That’s Who We R®.