The National Association of Realtors® (NAR) just released some interesting numbers. Nationally, the average number of Pending home sales (homes that are in the process of being sold) fell slightly in October. However, there was one area of the country that saw increased sales; the South.
For the Southern U.S., pending home sales increased slightly 0.1% to an index of 151.1 in October. While only a tiny increase from September, that number is up 21.0% from October 2019 and the highest increase across the country. Compared to other parts of the country, the South saw the greatest year-to-date increase compared to other regions. The West remained the same in October, at 116.8, which is up 20.8% from a year ago. The Northeast slid 5.9% to 112.3 in October, a 18.5% increase. And the Midwest fell 0.7% to 119.6, up 19.6%.
Lawrence Yun, Chief Economist for NAR has said that both the inventory of homes for sale and mortgage rates are now at historic lows, which means that while there are fewer properties available, which is causing prices to increase. However, the low mortgage rates are helping homeownership stay within reach for many in our country.
So more people moved south in October than any other part of the country. But why? I want to explore some of the factors that I believe have contributed to the influx of people to our area.
Working remotely. One effect of this COVID period is the emergence of working remotely. If you are fortunate enough to have an occupation that allows the opportunity to work remotely, then that provides an opportunity to live and work wherever you might like. Once individuals are untethered from the need of a physical workplace, then they start to look at their options for where they wish to reside.
Lower Cost of Living. Though there are some minor discrepancies, most seem to agree that Tennessee and Georgia are among the states with the lowest cost of living in the United States. Cost of Living is calculated by factors including housing, transportation, utilities, healthcare, insurance, and other goods and services.
If the Cost of Living in an area, that means that a person’s money goes a bit further than it would normally. This means that someone can purchase property at a lower price than they would in an area where the Cost of Living is higher. Simply put, you get more house for your money!
No state income tax. Tennessee doesn’t have a state income tax. For those who are retired, that means no tax on your Social Security benefits, withdrawals from your IRA or 401(k) plan. The property taxes for Tennessee are also below the national average, which means that fewer taxes are paid on purchased property. As Realtors, we advocate for low property taxes so that those who own a home aren’t overburdened for pursuing the American Dream of homeownership.
Of course we’re all a bit biased towards our home, but it’s clear that lots of people are moving to our area. If you’re looking to enter the housing market, either as a seller or buyer, working with a Realtor will help you through every step of the process. We work for our community and clients. That’s Who We R®.