School’s out, and vaccination rates are rising as America enters a new normal. Thus, the U.S. housing market continues at a fast and frenzied pace, with low interest rates and limited inventory fueling record high sales prices. May saw the national median existing-home sales price exceed $350,000, which is a whopping 24% increase. The National Association of Realtors reports this change as the largest year-over-year increase since 1999. Eager buyers are making multiple offers, some for well over the asking price, while others are making offers on homes sight unseen.
From the local perspective, we saw New Listings in the Chattanooga region increase 4.3% to 1,322. Pending Sales were down slightly (6.5%) from June 2020 (1,282) to 1,199. Inventory levels shrank 50.7% from their June 2020 levels (2033) to 1,003 units available for sale.
Prices continued to gain traction. The Median Sales Price increased 22.2% to $275,000, reflecting a $50,000 increase in one year. Days on Market was down 59.5% from June of 2020 (42 days) to only 17 days. Sellers were encouraged as Months Supply of Inventory was down 59.1% to 0.9 months. In June of 2020, there was 2.2 Months Supply of Inventory.
The increase in sales prices comes with a slight decline in existing home sales nationwide, as homebuyers struggle with declining affordability amid a lack of inventory. Some buyers are being forced to wait it out in hopes of more inventory and less competition. Meanwhile, home builders are trying to meet the increased market demand, with housing starts up 3.6% in May from April, according to the Commerce Department. As we ease into new routines and look forward to a post-pandemic future, one thing remains certain: Across America, we all desperately need more homes.
This market shows little signs of cooling off anytime soon. With properties selling 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®.