The local real estate market witnessed a slight, seasonally related drop in November in the number of homes sold, according to data released by the Multiple Listing Service (MLS) of the Chattanooga Association of Realtors.

In November of this year, Southeast Tennessee and the Northwest Georgia area saw the sale of 499 residential units, a 7.1% decrease compared to the previous month’s sales, but a marked improvement over both 2007 and 2008, showing a 43% growth over the same monthly period of a year ago.

The month-to-month slowdown accompanied the continuing weak jobs picture as well as a persistently tight lending market, CAR officials said.

In an optimistic note, economists from the National Association of Realtors have estimated that, in all, 4.4 million Americans will look to take advantage of the homebuyer tax credit before it expires by the middle of next year. From the enactment in February of 2009 through October, NAR estimates 1.8 million households would have qualified to claim the first-time home buyer tax credit. Now with the tax credit deadline extended till the end of June 2010 (for closings, with contracts signed by the end of April, 2010) and also available to many move-up buyers, an additional 2.6 million families would likely claim the home buyer tax credit.

Local Realtors Association President, Nickie Schwartzkopf said, “Preliminary figures recently released by the Department of Labor show that Tennessee, with an unemployment rate of 8.9% has fared somewhat better than many of our neighbors. However, we won’t see a move towards a more permanent level of prosperity for our market until this issue of joblessness clears up significantly.”

Chattanooga Area MLS President Kathy Tucker said interest rates will continue to be another key factor in the recovery. “They are very low at the moment and I don’t see them going any lower during 2010 as we continue this slow momentum of economic resurgence. However, I continue to be concerned about the astonishing deficit level we’re seeing nationally. It’s hard to imagine that it will not affect our market – and many others – if we cannot get spending, and the burgeoning multi-trillion dollar debt under control and see a strengthening of our currency.”

CAR officials said, "The general consensus among market economists seems to be that interest rates will start to rise, but not until next year. So, long-term mortgage rates are likely to remain low and near 5 percent for at least the next month."

For the month of November, the local median home price was $129,000. That represents an increase of 6.6% from the same period one year earlier and a small increase of 1.6% from the median price reported the previous month.

The average number of days on the market decreased. From recent highs (above 130 days), the average is now showing 115 days, indicating a trend of buyers wishing to take advantage of both the tax credit and attractive deals on residential properties that have become available, officials said.