December home sales down 38 percent
Published 8:19 am Wednesday, January 11, 2023
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Tri-Cities area home sales continued a six-month decline in December while prices remained plateaued near record highs. December’s report mirrors the annual market picture. Rapid mortgage rate increases that drove payments up by as much as 50 percent pushed sales slightly below pre-pandemic levels. At the same time, prices posted their third straight double-digit annual increase.
“Real estate professionals are girding for a turbulent prime home buying and selling season,” said President Jan Stapleton, Northeast Tennessee Association of Realtors (NETAR). The last half of the year saw rapid increases in mortgage rates curb housing affordability and put many buyers and new listings on pause. Last month’s new listings were down 26.8 percent. However, fewer sales have let active inventory make some small gains, so buyers are finding a little better selection of homes on the market. That should pick up as we near the peak home buying and selling season.
She added that the outlook is for a complex year with a lot of disconnect between buyers and sellers because the local market remains robust despite some negative numbers.
December closings were down 38.2 percent from last year, and the annual total was down 12.3 percent from 2021. Last month’s median price was $230,000, up 4.6 percent from December last year. The 2022 annual median price was also $230,000. It is up 15.1% from 2021.
At the end of the month, there were 1,304 active listings on the market. That’s 210 more than last year and equals 1.7 months of inventory at the current sales pace. Balanced market conditions are five to six months of inventory.
The average home that closed in December was on the market for 50 days. That has been increasing by one-day-a-month increments since April. The more time a home is on the market before closing is an indicator that demand is decreasing. However, when compared to December last year, when the average was 56 days, the demand decrease doesn’t look as significant, Stapleton said.
December sales were down in 13 of the region’s city and community markets. Prices declined in all but five markets.