With the arrival of spring comes the unofficial start to the homebuying season. However, as you might have noticed over the past few months – and years – residential real estate sales are have become a year-round process.
As I’ve mentioned in previous installments of this column, Chattanooga is a very desirable midsize city to buyers from all over the country. This increase in relocations has shifted our market to the point that any day that ends with a “y” is a good day to list a home.
However, the Chattanooga market is still suffering from an inventory shortage and the limited number of active listings is driving up costs in most – if not in all – price points. We can see this trend through the early part of the year as February’s sales number continued the upward climb.
Across the country, real estate markets remain hot ahead of the spring selling season with existing home sales up 6.7% as of the latest reports, the National Association of Realtors reports.
Experts attribute the growth in sales to an uptick in mortgage interest rates as buyers rushed to lock their home purchases before rates move higher. Mortgage rates have increased almost a full percentage point since December, with the average 30-year fixed-rate mortgage briefly exceeding 4% in February – the highest level since May 2019.
Nationally, inventory was at an all-time low of 860,000 as February began. This was down 17% from a year ago, which equates to only about six weeks worth of inventory.
Lawrence Yun, NAR’s chief economist, says much of the housing supply is concentrated at the upper end of the market. We’re also seeing this increase in higher-priced inventory in our local market, while homes priced at the lower end of the market are quickly disappearing, leaving many first-time buyers unable to find homes in their budget.
The shortage of homes is boosting demand even further, and with bidding wars common in many markets, it’s no surprise sales prices continue to soar. Until housing inventory increases, multiple-offer situations and frustrated homebuyers will be ever present in real estate transactions.
Locally, new listings in the Chattanooga region increased 3.6% to 1,055, pending sales increased 3.9% to 1,023 and inventory levels shrank 32.7% to 759 units on the year.
In our five-county footprint (Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in northwest Georgia), there were fewer homes available in the month February than we have ever seen.
There is a silver lining to these numbers: Many people who have staved off the winter months are preparing for the better weather of spring and are looking to take advantage of their increased equity in these super-hot markets.
The coming months will be telling in regard to what exactly all the pent-up demand will result in for homes coming onto the market. Chattanooga’s home prices continued to gain traction in the early part of the year and sellers are keenly aware that spring is the perfect time to present their homes to the market and to the large pool of prospective buyers.
Here are the numbers that sellers will be looking at in moving forward over the next few months:
The median sales price increased 22.4% to $290,000 from where we were last year at this time. Days on market was down 44.7% to 21 days, which is very telling as it was 38 days just a year ago. Sellers should also be encouraged as months supply of inventory continued to decrease by 36.4% to 0.7 months.
No matter what your needs are, consulting a Realtor is crucial in this market. A Realtor will work with you to make sure your housing needs are taken care of. 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 board 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 MLS users