Knoxville Tennessee Real Estate Blog

Another week has passed and it’s time to check the scorecard to see how Knoxville real estate sales have been doing in the past week and year to date.

The National Association of Realtors says: “For the first time in five years, existing-home sales have increased for four months in a row.”

In counting the weekly real estate transfers in today’s Knoxville News Sentinel I see178 total transfers recorded. As usual the low to mid price points are way ahead of the higher price ranges. There were no sales reported over one million dollars and only 1 between $500,000 to $1,000,000.

Knox County real estate transfers for the week of August 23rd.

Tracking Knox County real estate transactions recorded at the Register of Deeds office there is a very slight upturn in numbers of closings. In past weeks this year we’ve averaged around 150 transactions per week so this week’s 178 is a modest improvement. However I’m still not ready to call it an improvement even through the numbers are up. I think it’s more of a seasonal adjustment than anything else.

In additional to being very localized, real estate sales are also very seasonal and very much tied to local economies. Historically December, January, and February are the slowest 3 months of the year with a rise usually beginning in the March-April timeframe, peaking around May-June, and then tapering off towards fall and back to the slowest months of Dec, Jan, & Feb again.

Take a look at Knoxville area sales over the past 4 years below compared to what’s happened so far in 2009.

Comparison of past 4 years to year to date in 2009

The rising red line on the bottom is where the Knoxville area is at the end of July. All the other lines represent previous years sales back to 2005. Notice how they usually bottom out around December and then start a gradual rise in January towards a peak around mid summer and then slow back down in the fall.

So why do more people buy and sell houses in the spring and summer than in the fall and winter? There are lots of reasons but some of the more common are these:

• Parents like to buy and/or sell in the spring/summer timeframe because the kids are typically out of school and don’t have to be moved from one school district to another in mid-term.
• Lots of homebuyers prefer shopping for a home in the warmer months because there is usually a larger selection of houses to choose from, the weather is more pleasant to get out and look, and since the days are also longer, there is more time to look around both after work during the week and on weekends.
• Companies that transfer employees also try to do more of their job shifting in the summer months for the same reasons.

Bottom line; sales are up compared to previous months in 2009 but still way down compared to the same months in previous years.

I’m predicting we’ll see the start of the seasonal downturn in the greater Knoxville area when the August 2009 sales figures come out and a steady decline as in previous years to a bottom in December.

One huge unknown factor that will bring a new twist to this year is the expiration of the $8,000 tax credit at the end of November, 2009. I think that’ s been driving a large portion of our market this year and I’m very curious to see how that plays out when it ends. I think it will cause a bigger drop in sales than usual because of the economic uncertainty the country as a whole is still experiencing.

Have a real estate question? Comment below here or email me for a confidential answer.

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