Local real estate sales in the fourth quarter were expectedly soft according to figures from the Multiple Listing Service (MLS) of the Chattanooga Association of Realtors.

With 1,302 units sold, fourth quarter statistics were down 16.5 percent from 2007’s fourth quarter and 25.5 percent from the third quarter in 2008. It represented the year’s lowest quarter in terms of sales.

In all, 2008 statistically tied with 2003 in terms of sales making it the fifth best year for total units sold for the local market.

Historically, the October through December fourth quarter months represent some of the slowest months in real estate and are outpaced during the peak spring and summer months. Current economic troubles and weak consumer confidence only emphasized stresses in the residential real estate market, officials said.

“Troubles in the economy continue to keep buyers on the sidelines, but opportunity is high all across the region,” said Nickie Schwartzkopf, President of the Chattanooga Association of Realtors. “While realtors see first-hand how soured consumer confidence is keeping sales volumes down, they also know about attractive deals out there everyday for individuals and families looking to become first-time homebuyers, movers up and investors.”

“We’re all aware of the financial strains and the impact rising costs and job losses have had on personal budgets, yet for those ready to make that move, the local market presents a unique chance for buyers and sellers,” added MLS President Kathy Tucker. “Homeownership still remains the cornerstone of the American dream and one of the safest investments you can make for your future, especially when looked at over the long term.”

The latest numbers come out against the backdrop of efforts in Washington, D.C., to pass an economic stimulus package. Realtors across the country have been advocating for a key part to focus on housing to get buyers back into the market, it was stated. Though there is the first-time homebuyer tax credit currently available, it has not been the incentive many hoped for it to be, officials said. The idea, passed in the Senate, and championed by Senators Johnny Isakson (R-GA) and Joe Lieberman (ID-CT), would have created a tax credit for up to 10 percent of the cost of a home to a maximum of $15,000 for all buyers of principal residences. If Congress and President Barack Obama could have agreed to a final version, the tax credit could have provided a healthy shot to housing markets throughout the nation and help get the economy back on track, CAR officials said.

Ms. Schwartzkopf said, “The first-time homebuyer tax credit passed last year can really be seen as an interest free loan and it never provided the motivation we had hoped. A new, broader true tax credit, one without repayment requirements, would be much more attractive to strengthen the housing market by appealing to more prospective buyers.”

Ms. Tucker added, “A tax credit would’ve helped turn some of those kicking the tires into true buyers. But still credit markets remain locked up and we’ve got to see definitive solutions that would get banks back in the business of lending money. We’ve been telling our clients and the public that things are more favorable here for the qualified buyer, but that doesn’t stop the national negative perception permeating consumer minds. It continues to weigh down on the real estate market causing it to perform below where it could.”

CAR officials said, "If and when a stimulus happens with or without a homebuyer tax credit, it does not take away from the critical role real estate plays in the economy. Each home sale also results in economic gains with any remodeling as well as direct purchases of appliances, furniture and household services supported by the homeowner.

"One of the favorable factors in the local real estate market is affordability. As noted by the fourth quarter median home price of $135,000. Median home price represents the middle ground of units sold, with half going for more and half going for less; it is a stronger indicator than average price points because the median is not skewed by extreme highs and lows.

"When compared to the median price in the previous year, the 2008 figure is identical to the 2007 fourth quarter price and 3.4 percent off from the year’s third quarter. The median price has been slightly lower in recent months due to higher numbers of short sale and foreclosure properties being sold. Such sales are also reflected in the aggregate median home price, as released by the National Association of Realtors. For the fourth quarter that price was $180,000, showing how the local market can remain more attractive to buyers. Sellers too can take advantage of the affordability issue by making up any downward price push on the buy side. Plus, with interest rates remaining low, more people can maintain their mortgage payments."

“Current conditions and weak consumer confidence makes forecasting difficult to do but we can be hopeful for some sort of job creation measures, which in turn would be another type of housing stimulus because more jobs can translate into more homeowners,” said Ms. Schwartzkopf. “The local outlook down the road is brighter and as more companies and innovated entrepreneurs get drawn into our region, we can be a leading community in economic growth.”

“Hardships and uncertainty are out there but I’d take this market over the high priced, hardest hit communities any day,” said Ms. Tucker.

Previous Year Statistical Comparison
2008 Fourth Quarter Units Sold: 1,302
2008 Fourth Quarter Median Price: $135,000
2008 Fourth Quarter Average Days on Market: 118 Days

2007 Fourth Quarter Units Sold: 1,560
2007 Fourth Quarter Median Price: $135,000
2007 Fourth Quarter Average Days on Market: 113 Days

Previous Quarter Statistical Comparison
2008 Fourth Quarter Units Sold: 1,302
2008 Fourth Quarter Median Price: $135,000
2008 Fourth Quarter Average Days on Market: 118 Days

2008 Third Quarter Units Sold: 1,748
2008 Third Quarter Median Price: $139,742
2008 Third Quarter Average Days on Market: 121 Days