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Editorial


Front Page - Friday, January 31, 2020

A look at national housing markets




In real estate, we hear and often repeat the familiar phrase, “Location is everything.” We all eat, live and think locally.

As a Realtor, I tend to focus on our immediate area. However, to get some perspective, I believe we sometimes need to step back and take a look at housing from a national perspective.

The National Association of Realtors reported this month that existing-home sales – which includes completed transactions for single-family homes, townhomes, condos and co-ops – rose 3.6% in December compared to the previous month.

Nationally, existing-home sales ended 2019 with an increase in December, as the selling market remained strong and housing shortages continued at the start of 2020. Sales are up nearly 11% from a year ago.

Lawrence Yun, NAR’s chief economist, expects homebuyer demand to remain strong in the new year.

“We saw [2019] come to a close with the economy churning out 2.3 million jobs, mortgage rates below 4% and housing starts ramp up to 1.6 million on an annual basis,” Yun says. “If these factors are sustained in 2020, we’ll see a notable pick up in home sales in 2020.”

Yun believes home sellers are positioned well, but prospective buyers are less fortunate. Low inventory remains a problem, he says, with first-time buyers affected most.

Here’s a closer look at other key indicators from NAR’s latest national home sales report:

Home prices

Existing-home prices for all housing types was $274,500 in December, up 7.8% compared to a year ago.

“Price appreciation has rapidly accelerated, and areas that are relatively unaffordable or declining in affordability are starting to experience slower job growth,” says Yun. “The hope is for price appreciation to slow in line with wage growth, which is about 3%.”

Inventories

Unsold inventory is at a three-month supply at the current sales pace. Unsold inventory has dropped for seven consecutive months annually. At the end of December, total housing inventory was at 1.4 million units, down 8.5% from a year ago.

Days on market

Forty-three percent of homes sold in December 2019 were on the market for less than a month. On average, properties remained on the market for 41 days in December, down from 46 days a year ago.

First-time buyers

First-time buyers comprised 31% of sales in December, down slightly from 32% a year ago.

Investors

Individual investors and buyers of second homes accounted for 17% of sales in December, up from 15% a year ago. Investors make up the biggest bulk of cash sales, which comprised 20% of transactions in December.

Distressed sales

Foreclosures and short sales represented just 2% of sales in December, unchanged from a year ago.

So what does all this data mean for us locally? It shows that as other markets experience appreciation and gains, Chattanooga continues to be known for job growth and affordability. Our housing market looks to remain strong and, in some cases, perform better than similar metro markets.

As Realtors, we love serving our community. We help our clients and our community navigate a market that’s ever-changing. That’s Who We R.

Greater Chattanooga Realtors is The Voice of Real Estate in Greater Chattanooga. A regional organization with more than 2,000 members, Greater Chattanooga Realtors is one of some 1,300 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.