The Northeast Tennessee Association of Realtors (NETAR) reported on Thursday that the average home sales price increased for the ninth straight month in May.
NETAR said sales were brisk and the five-month market trend looks solid going toward the mid-year point.
“Prices were 4.3 percent higher during the first five months of this year than last year. That is an average increase of $6,634,” NETAR President Eric Kistner said in a release.
In contrast, NETAR said last year’s annual price increase was 2.3 percent.
NETAR said there were 613 closings on single-family home sales last month, 21 fewer than in May last year. The average sales price was $167,468, up $2,713 from last year. Sales of 55 townhomes or condominiums closed with an average sales price of $120,539. Townhome and condo sales were up 26.1 percent during the first five months of the year, and the average sales price was 7.9 percent higher.
Kistner noted: “The sales trend is tracking what we saw last year. Year-over-year closings are showing some intermittent volatility, but that is more of an issue with closing rates than actual market performance.”
Some of the slowing, according to NETAR, is due to more pending sales with contingencies. A contingency is a provision in a real estate contract that specifies the contract would cease to exist upon the occurrence of a certain event, like upon a buyer successfully obtaining a mortgage loan at an interest rate of 4.5 percent or lower. Should rates rise quickly and this rate not be available, the contract would end.
NETAR pointed out mortgage rates remain competitive, and lenders are eager to lend to qualified buyers.
“The pending sales inventory is higher than last year, but the rate those accepted offers move to closing has slowed,” Kistner added. Pending sales typically move to closing in a month to six weeks, and it is not uncommon to see four percent of them fall through. During the past two-and-a-half years, an average of 65 percent of active pending sales moved to closing each month. During the past two months, that has dropped to 50 percent, Kistner stressed.
NETAR said the average listing price has increased 8.7 percent. The average single-family home sale that closed in May was on the market for 133 days. “It was the lowest time on the market we have seen since before the recession,” Kistner said. “And that is just the average. Aggressively priced homes are selling much faster.” The average townhome sold in May was on the market for 161 days.
For more go to www.netar.us.