Steady home sales and an increase in housing permits are proof the state’s overall housing market is recovering, newly released data shows.
Sales in Rutherford County dipped slightly in November, as compared to October, according to The Red Report. However, the real progress is shown in the year-over-year comparison. A total of 308 homes were sold last month, as compared to 231 in November 2011.
“We predicted to see a steady decrease for the last quarter of the year but we didn’t expect the October increases we had. Now it appears November has put us back on the seasonal track everyone expects,” says Steven Dotson, president of Rutherford County-based Red Realty, which publishes The Red Report.
“The spread between this year and last year keeps getting larger, which means we are steadily improving. Looking back over this year, it has been a huge turn around year for the real-estate industry: new jobs are increasing, interest rates are at record lows, home prices are increasing, new housing starts are increasing, and confidence is improving. I hope we take all of this year’s positive momentum into 2013.
Home sales in Middle Tennessee show consistent growth, as well. There were 2,198 home closings reported for the month of November, show figures provided by the Greater Nashville Association of Realtors. This figure, which includes sales in Rutherford County, is up 38 percent from the 1,592 closings reported for the same period last year.
Year-to-date closings through November are 23,950, a 27 percent increase from the 18,851 closings reported through November 2011. The total number of closings through November in 2012 already exceeds the 20,624 total closing for all of last year, with one full month remaining.
“2012 has been a year of meaningful improvement for home sales. These numbers are evidence that the market in this region is improving on a more consistent basis,” said GNAR President Kendra Cooke. “The Greater Nashville area is well on its way to having more than 25,000 closings for the first time since 2007. These signs are welcome as we near the end of the year and begin to look toward 2013.”
“November home sales show the largest year-over-year increase this year. Closings are up in every category. The median price for single-family homes is up significantly, though down slightly for condominiums. The fact that pending sales are also substantial means that the year should finish well.”
Inventory in the Greater Nashville area has decreased, which Cooke attributes to both active sales and a seasonal trend. It is currently under 17,000 units, the lowest it’s been since 2006
“There is a total inventory supply of only eight months, with less than a six month supply for single-family homes,” she said. “It is likely that inventory will increase early in the new year, but there are good options available now for those considering a home purchase this year.”
Permits issued for new single-family homes climbed to an annual rate of 13,200 during the third quarter, the highest level since the tax-incentive–fueled fourth quarter of 2009, according to 3rd quarter review of Tennessee’s housing market published by MTSU’s Business and Economic Research Center. Single-family home permits are 15.5 percent higher over the year, with 5.5 points of this gain occurring in the third quarter, meaning the rate of growth is accelerating.
The third quarter was even stronger for the South and the United States, however, with these areas experiencing over-the-year gains of 18.6 percent and 23.4 percent, respectively.
Additionally, taxes collected on both mortgages and real estate transfers rose in the third quarter, reflecting increased refinancing activity and a modest gain in the value of real estate transactions. Mortgage tax collections are up 13.9 percent from the previous quarter and 40.3 percent over the year, while taxes collection on real estate transfers are 1.2 percent higher from the second quarter and up 16.1 percent over the year.
In Tennessee, sales of new and existing homes gained steam during the third quarter for the Nashville and Memphis areas but declined slightly in the Knoxville area. Both Nashville and Memphis have experienced rising sales fairly steadily since the third quarter of 2010, with Nashville sales rising 23.4 percent annually during the past two years and Memphis growing 16.5 percent annually, BERC’s report shows.
“The explanation for higher sales can be found in low mortgage rates, modest employment gains, improved consumer confidence, and increasingly stable home prices,” the housing report states.
Inventories of unsold homes plunged in the Nashville area, with more modest declines in the Memphis and Knoxville areas. The inventory-to-sales ratio, a measure of the supply of homes relative to demand, has dropped to just 5.9 months for the Nashville area, the lowest in five years.
Local and statewide housing market recovery is also reflected on a national level, as reported by the National Association of Realtors.
Housing starts are up 42 percent from one year ago, median sale prices has increased 11.1 percent nationally, and markets are experiencing the lowest housing supply since February 2006, which was a few months before the peak.
First-time homebuyers comprised 31 percent of all homes purchased, down slightly from 34 percent in 2011, while cash buyers comprise 29 percent, which held steady from last year. Additionally, the national average interest rate for a 30-year fixed rate mortgage is at a record low of 3.38 percent.