Knox County Market Report Sept. 2019
The most common question we get asked is “how is the market?” The next most common statement we hear is “I hear there is no inventory.” Back in 2008 it was “I hear nothing is selling.” There is and was truth to both statements, just not the whole truth. Fact, the real estate market is not black and white.
My hope is to provide you with the most up to date information on the Knoxville real estate market so you can cut through the noise and make decisions with confidence. Please follow these posts and I promise you will be ahead of any late night news source.
Let’s get started. What closed in September shows us the results of what was happening in July and August. Not really helpful for planning ahead. We need to look at the Leading Indicators, the current actions that lead us into the next two months (the average sale takes 30-60 to close with the majority of closings taking place near 30).
The first leading indicator we want to look at it is the number of new listings to hit the market. In Knox County we had 18% fewer new listings hit the market then in August. So less new inventory.
The second indicator we need to look at is the number of pending listings, or homes going under contract. This number is also down but only by 8.3%. I feel this drop is due in part to the drop in new listings. We can’t sell them if they don’t come to market.
Some other numbers to look at are the Days on Market (DOM) and the absorption rate. DOM shows us the average length of time it takes for a home to go under contract. In September the DOM for Knox County was 32. Now this is an average, some homes sold in hours and some took a year.
The absorption rate leads to months of supply, this is a helpful indicator to determine is we are in a buyer’s market or seller’s market.
Less than 5- 6 months of supply = seller’s market.
More than 6 months of supply = buyer’s market.
Knox county is currently around 2.3 months of supply and has been below 3 months for the last year. We are definitely in a seller’s market.
Lastly, we are seeing interest rates in the threes. This is good news for those looking to buy or refinance.
While the numbers point to now is the time to sell, sell, sell, that would not be the whole truth. If you look at the report above it shows a slightly different picture depending on where you are at in “the market.” In other words it all depends on price point and location.
The lower price points are where we are seeing the market be the most aggressive and where the prices are being bid up quickly. Homes are not coming on the market fast enough. The upper price brackets are seeing a different situation. There is just more to choose from plus a large chunk of new construction homes are in the 300s and up range adding to the inventory.
So why buy now? Well if you wait you will most likely pay more for the same home. This bottom up pressure does not look like it will be going away soon and builders are not building homes in these price ranges to help offer relief. So if you buy now you get to lock in the current price and a low interest rate. Then sit back and watch your home appreciate. The one who really wins in this scenario is the move up buyer. They get to sell their more affordable home in a highly competitive market and then potentially have more to choose from on their purchase side. Plus they get rates in the 3s.