Home sales rebounded in February after starting the year with a January decline.
The Greater Chattanooga market closed 642 residential units in the month of February, which represents an 8.6 percent increase when compared to February 2016. This positive result followed a 5 percent decline in year over year sales in January and brings the YTD total into the positive column at 2.4 percent.
There are many factors that contribute to the housing market, yet at the end of the day it’s a story of supply and demand. In the current market, the demand has continued to be strong, despite declines in the available inventory. There were 2,967 homes for sale in February compared to 3,873 in 2016, thus a 23.4 percent decrease.
Contributing to the inventory decline, the number of new units coming to market was down by 15.1 percent for the month. There was nowhere for inventory levels to go when this decrease is paired with increased sales. If this category continues to decline in coming months, it will eventually become a drag on sales.
The numbers are not all negative; the average price of a home sold in February was up 9.1 percent and came in at $194,646. When paired with the January increase, the average price has risen 10 percent for the first two months of 2017. If you’re a home owner who’s considering selling or refinancing, this is great news!
Increased prices and increasing interest rates related to a decline in the housing affordability index. This measure declined by 10.7 percent when compared to the same month last year.
How you interpret these numbers and their importance to you depends on which side of the process you are in. If you’re a home owner who’s thinking about selling in the next two to three years, then now is the time to move. We have experienced strong price appreciation and inventory (competition) is very low. You’ll have the best shot at selling your house for the most favorable terms this year.
If you’re a buyer waiting for the selection to improve and give you more choices, that simply is not going to happen. For the near-term, prices will remain strong and interest rates will only go up from here, thus eroding affordability and reducing the amount of home you can buy. So narrow your list of “must haves” and find your next home with the help of an experienced Realtor!
The Greater Chattanooga Association of REALTORS is The Voice of Real Estate in Greater Chattanooga. The Association is a regional organization with more than 1,700 members and is one of more than 1,400 local boards and associations of Realtors nationwide that comprise the National Association of Realtors.
GCAR services Hamilton and Sequatchie counties in southeast Tennessee, and Catoosa, Dade and Walker counties in northwest Georgia. Go to www.GCAR.net for more information.