Even before Chattanooga Realtor Brandi Pearl Thompson was installed as the 2020 president of Greater Chattanooga Realtors last week, agents were asking for her predictions for the upcoming year.
Her short response was simple: Real estate is still going to be a great investment.
Thompson expanded on her opinion during a talk with the local chapter of the Women’s Council of Realtors during the organization’s monthly luncheon, held Jan. 8 at the Walden Club.
To support her positive outlook for the coming year, Thompson turned her gaze back to 2010 and compared the Chattanooga housing market at the beginning of the decade to the end of last year.
Using data culled from the local MLS, Thompson said closed sales experienced a dramatic increase from 5,778 in 2010 to 10,702 in 2019.
In addition, the average sales price jumped from $156,503 in 2010 to $237,765 last year.
“When I started in this business 15 years ago, the average sales price was $125,000,” Thompson added. “To climb to $237,000 in 15 years is a significant appreciation, so housing still provides a good return on your investment.”
Despite Thompson’s optimism, she is still asked how global events and the upcoming election might affect housing. Specifically, will real estate continue to be a solid investment.
“In 2017 and 2018, some areas experienced between 5% and 10% appreciation,” Thompson said, citing a conversation she had with Hamilton County Assessor of Property Marty Hanes.
“In 2019, we saw that slowdown to 3.5%. The appreciation won’t stop this year, but it will slow down to 1% to 3% in some areas, although some areas will still get 3% to 5%.”
Thompson said many people also have asked her if the housing market is about to dip. She says no, basing her argument on inventory levels,.
“At the beginning of the recession in 2010, the months supply of inventory was 11.1,” she noted. “We haven’t seen over seven months in four years. We ended 2019 with 3.2.”
Thompson noted the expansive inventory in 2010 held prices down, but diminished inventory going into 2020 will also keep prices stable and buyers actively looking for new homes.
“Buyers are saying we don’t want to pay the appreciation we’ve seen,” she continued.
The challenge for Realtors will be competing in a market that’s bursting with agents.
“In 2010, the association had between 1,000 and 1,200 agents. In 2019, we topped 2,000 agents,” she said. “This is where things get tricky. In 2010, there were 5,592 houses for sale. As of this morning, there were 2,200 houses for sale.”
Thompson advised searching out areas of growth. “The average sales price in Red Bank in 2019 was $220,000. Five years ago, it was significantly less,” she pointed out. “And there’s a lot of investment taking place in East Ridge. We’ve already seen all the commercial investment that’s going on there, but there’s also been growth in the rental market.”
As president of Greater Chattanooga Realtors in 2020, Thompson said she’s ready to answer these and other questions her fellow agents have about the Chattanooga housing market.
“I sell real estate to change other people’s family financial tree. That’s what we give to the community,” she said. “I want to lead all of you toward making a better community and being forward thinking.”