By Mark Hite
President, Greater Chattanooga REALTORS®
The Greater Chattanooga Region fell in line with the national trend of declining home sales in September with a 10.8% decrease.
For the month of September there were 784 closed units compared to 879 for the same period in 2016. This decrease continues the developing trend of up and down-home sales this year. Over the past 6 months, sales have been up 3 months and down 3 months. Year to date the region stands at .1% increase over the first 9 months of 2016.
This sales decrease comes as no surprise to experienced students of the market. The number of homes available for sale stood at 3,067, which is a 20.5% decrease to last year. The number of new listings coming to market also declined by 1.6%. This shrinking inventory has been putting pressure on sales all year and September was an example of low supply suppressing sales.
Of those homes that did sell, they sold quickly. The average days on the market (time from listing until an acceptable contract is received) decreased to a short 56 days in September. This is in comparison to 60 days on the market for the year to date average.
The suppressed sales results did not have a negative impact on prices, in fact home prices continued the march upward. The median price of a home in September reached $180,000 which is a 6.6% increase over 2016 and the average price came in at $216,165 for a 11.4% increase. While not an exact measure of appreciation, the average price YTD stands at $210,093 which is a 8.9% increase. This increase in prices, paired with relatively stable interest rates have resulted in the affordability index declining by 10.6% for the year.
While no one has a crystal ball to predict the future of home sales in the Greater Chattanooga Region, we do have 1 indicator that gives us clues. Through the multiple listing service of the Greater Chattanooga Realtors, one can measure the number of “pending” contracts. These are properties which have a contract to sale but have not yet closed. For the month of September, we experienced a 2.8% decrease in pending sales which follows a 4.2% decrease in August. This would indicate that sales for the following 60 days should be flat or decrease to the previous year. To underscore the accuracy of this tool, for the year pending sales are up .3% and actual closed sales are up .1%.
Interest rates are low, unemployment is low and the overall economic outlook is healthy. Do not be deterred, this is a GREAT time to buy or sell real estate with the assistance of a professional member of the Great Chattanooga Realtors.