The hot local housing market continued through April. This busy spring market continues to see many multiple-offer situations driving sales prices exceeding asking price. By the time a sale closes, the market might already have moved higher than that sold price suggests.
This type of market can create stress and frustration for prospective homebuyers who are frequently having to submit offers on multiple properties before they are able to secure a purchase. While housing affordability remains an area to watch as prices continue to rise, strong buyer demand and limited housing supply show no signs of easing soon, pointing to a continuation of this market trend through spring and into summer.
Dr. Lawrence Yun, chief economist of the National Association of Realtors, recently said that while the housing inventory shortage has been pushing up prices, it’s also holding back home sales. In nearly every market, 20% more inventory would mean 20% more home sales.
Nationally, there were 1.74 million housing starts in March, the most in 14 years and very welcome news in light of the persistent inventory shortage.
Yun also mentioned that a new home construction surge is highly needed, especially in light of major challenges on material costs and soaring lumber prices. As I mentioned last week, the National Home Builders Association, on behalf of 35 organizations, including the National Association of Realtors, wrote to Commerce Secretary Gina Raimondo urging the Biden administration to “undertake a thorough examination of the lumber supply chain and seek remedies that will increase production.”
New April listings increased 27.3% to 1,245 locally. In April 2020 (at the beginning of COVID), there were 978 newly listed properties.
Pending sales increased 60.1% to 1,250. Inventory levels shrank 66.0% to 820 units, compared to 2,409 in April 2020.
Prices continued to rise, with the median sale price increasing 16.9% to $252,500. Days on market dropped 54% to 23 days. Sellers were encouraged as months supply of inventory declined 70.4% to 0.8 months, compared to the 2.7-month supply a year ago.
In short, there’s not much inventory, and what inventory is available is moving very fast. For perspective, a normal or balanced real estate market has a four- to six-month supply (or 120-180 days), and Greater Chattanooga hasn’t seen that scenario since 2011.
As I often say, the current conditions only reinforce the need for buyers and sellers to utilize the knowledge and expertise of a Realtor. No matter the market, and no matter the circumstances, Realtors go above and beyond to serve our community. This market is competitive, and Realtors work tirelessly for their clients, day in and day out. That’s Who We R.
Greater Chattanooga Realtors is The Voice of Real Estate in Greater Chattanooga. A regional organization with more than 2,400 members, Greater Chattanooga Realtors is one of 300 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors services Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in northwest Georgia. For more information, visit www.gcar.net or call 423 698-8001.