While 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.
For the month of August, residential home sales were flat to last year, with a .2 percent 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 percent to last year, which falls in line with early predictions.
Taking a closer look at this sales data, it’s particularly important to note that the region had a 23.5 percent 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 percent reduction to last year’s figure and is consistent with the MOS for the last seven months.
Less inventory and consistent sales sent the days on market plunging to 50 for August, which is a 13.8 percent reduction to last year’s 58 days. The year-to-date DOM stands at 60 versus 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. For the month of August, the Median Sales Price increased to $178,450, which is 7.5 percent bump over last year, and the Average Sales Price increased to $212,324, which represents a 6.3 percent increase. Year to date, the average price of a home in the Chattanooga region stands at $209,432.
Several factors offer clues regarding what the upcoming months of home sales might 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 to last year, coming in at minus one percent.
This is in line with the year-to-date number of contracts written, which is up 1.3 percent over the first eight months of 2016. This is a 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 offers a clue about future sales results are the number of new listings coming to market. In this category, we saw a decrease of 9.4 percent compared to 2016, which is slightly weaker than the year-to-date trend of minus 7.4 percent.
At some point 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 year-to-date trends.