The beginning of the year marks a new opportunity for many hopeful buyers to make their home purchase dreams a reality. While those efforts won’t be without challenges – including a shrinking inventory – Realtors continue to advocate for access to affordable housing.
The National Association of Realtors reports 2022 began with an existing home inventory of 910,000 – the lowest level recorded since 1999. Thus, competition in the real estate market remains fierce.
In addition, the affordability rate continues to decline as inflation, soaring sales prices and rising mortgage interest rates reduce purchasing power.
The sudden increase in home prices and interest rates has buyers paying significantly more per month compared to this time last year, which might cause sales to slow as more buyers are priced out of the market.
With 2022 beginning where 2021 left off, existing home sales reached their highest level nationally since 2006. NAR reported that sales were up 8.5% compared to the previous year as homebuyers rushed to take advantage of historically low mortgage rates.
Yet many buyers were forced to temporarily put their purchase plans on hold due to higher sales prices and a shortage of supply.
Locally, new listings in the Chattanooga area decreased 2.5% to 874 in January. The result naturally affected pending sales, which were also down 1.9% to 961.
There was a significant decrease in active inventory levels, which shrank 35.2% to 775 units from last year at this same time. As a comparison there were 1,196 available properties in January 2021. List prices and closed sales prices in January continued to gain traction in our local market.
The median sales price in Chattanooga has increased 23.4% to $290,000 over the past 12 months. In January 2021, the median sales price was $235,000.
Days on market showed a decrease of 43.2% to 21 days, compared to 37 days in January 2021. This caused the absorption rate (supply of inventory) to tick down 41.7% to only 0.7 months from just a year ago.
A desire for more consumers – especially first-time buyers – to have the means for entering the market keeps Realtors working with elected officials to increase inventory and stabilize prices.
To address these and other concerns, Greater Chattanooga Realtors traveled to Nashville in early February to meet with our elected officials. The purpose of our conversations was to advocate for homeownership, property rights and access to affordable housing.
I feel like our visit was productive for the membership as well as for our voice as Realtors in Nashville and hope to share more about those meetings in the coming weeks. In the meantime, I assure you that while the cold weather has not translated to a cooling of the housing market, Realtors are very much aware of these challenges and are working to address them.
Spring is just around the corner, so we hope to see more homes “bouncing” onto the market in the coming months.
Given the limited inventory and properties selling quickly, it’s crucial to work with a Realtor who knows the ins and outs of this market. Realtors help their clients work fast to get the home they desire, or to list a home and navigate the increasing number of offers a seller might expect given the high demand from the many buyers in our market. That’s Who We R.
Founded in 1912, Greater Chattanooga Realtors is a regional organization with more than 2,500 members servicing Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in northwest Georgia. The Association is one of approximately 1,100 local associations and boards of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors owns and operates a Multiple Listing Service that is one of approximately 600 MLSs in the country and services more than 2,700 users.