Greater Chattanooga-area home sales declined for the third consecutive month in June compared to 2016.
While no one likes to see sales decline for consecutive months, the Chattanooga real estate outlook is not one of doom and gloom. The year-to-date numbers reflect a positive .8 percent increase, and the trailing 12 months show a 4.9 percent increase when compared to previous year.
The other factor to keep in mind is that the sales we’re up against are records for real estate sales in our community. There were 950 closed residential units in June, compared to 980 in 2016 and 912 in 2015.
At the root of the softening sales trend is reduced inventory. In June, there were an average of 3,087 homes available for sale, which is in stark comparison to 2016 (4,020) and 2015 (4,651). While there’s still ample inventory for home buyers to choose from, the supply is diminished compared to recent years.
Homes sold quickly, as the average days on the market dipped to 60 days in June. The average this year is 63 days compared to 70 days last year at this time.
Home buyers continued to pay closer to the asking price, with average sale only 3.7 percent off the original list price. This indicates continued buyer confidence, as YTD, the percent of negotiation stands at -4.4 percent vs. last year’s -5.0 percent.
Home buyers continued to pay more for the homes they chose. The median price increased 5.9 percent and the average home price increased by 8.4 percent to $228,402. To give this some perspective, the average home price in June 2015 was $192,159. This represents an increase of 18.8 percent in just two years.
As we reflect on this price growth, we must keep in mind that wages are not growing at this rate, so at some point, affordability will begin to put a strain on home sales. Low interest rates continue to facilitate affordability across the board, so this is a key metric to track in coming months.
The second half of 2017 continues to be a great time to buy or sell real estate in the Greater Chattanooga area. Realtors need homes to sell, so now is an excellent time to find out what your home might be worth and how long homes are on the market in your neighborhood. The overall economy remains positive, and while interest rates have crept up, it has not been a significant change, so affordability is still good.
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.