Southeast Tennessee and the Northwest Georgia area in January saw the sale of 297 residential units, a 37.3% decrease compared to the previous month’s sales, but a small gain over the same period of 2009, according to data released by the Multiple Listing Service (MLS) of the Chattanooga Association of Realtors.

CAR President Randy Durham said, “In looking at our historical performance, January has been one of the weakest months of any year, with the sole exception of those years in the mid-decade that were, I believe, untypical of what this market should expect.”

He added, “Of course, I’d like to see better sales as we continue our climb out of the market bottom, but I see this as a process, not an event.”

Lawrence Yun, NAR chief economist, said, “The expected boost to existing home sales by more than 20 percent in the first half of 2010 from comparable period one year before will sufficiently trim away inventory such that home values will begin to show increases by the middle of 2010 in many parts of the country. The median existing home price could rise by 2 to 4 percent in 2010. New home sales could jump by nearly 50 percent, though from very depressed levels to figures that would be less than half the pace as during the peak sales year in 2005.

Chattanooga Area MLS President Bobby Teems said, “A major reason for our association to provide sales reports to our members and the public is to give a full context of what they mean.

“The Greater Chattanooga-North Georgia area is, at the moment, slowly easing its way out of the trough in economic activity and home sales. But being the optimist that I am, I believe that we’ll see that pace pick up somewhat later in 2010 with an increase of activity regarding Volkswagen.”

Both CAR officers maintain their disappointment in the region’s jobs picture. Mr. Durham said he particularly sees it as a stumbling block to a normalized recovery as long as the situation remains static. “I’d like to see the needle move much quicker than it has,” he said. “There was a slight uptick in unemployment from December of 2009 into January’s figure of 9.1%. But thankfully, it’s still better than the national average.”

For the month of September, the local median home price was $119,900. That represents a decrease of 6.9% from the same period one year earlier, but a decrease of 11.4% from the median price reported in December.

Car officials said, "However, it continues to favor buyers in terms of real affordability and remains one of the more attractive cost models for U.S. regions of this size."

“Current interest rates still favor buyers,” Mr. Teems said. “But I’m telling my customers to watch for a rise as the year progresses, and I think that trend is one that is being recognized everywhere.”

A recent report from the National Association of Realtors says that more than a year after the global financial meltdown, Fannie Mae and Freddy Mac remain at the center of the U.S. government’s efforts to keep real estate afloat. The practice of purchasing mortgages aids in stabilizing interest rates and allows lenders the ability to continue lending with less pressure. So far, the government has given the two companies a total of nearly $111 billion to buy mortgages originated by others, keeping some as investments and repackaging others for sale to investors as securities, CAR officials noted.

Together, Fannie and Freddie fund 90 percent of U.S. mortgages. They also have reignited lending by state and local housing-finance agencies by guaranteeing $24 billion in debt. And they are supporting the apartment sector by lending to builders and buyers. The situation is not likely to change soon because by relying on Fannie and Freddie, President Obama can bypass Congress, it was stated.

A just-released annual report prepared by the Center for Business and Economic Research at UT-Knoxville says that Tennessee, as a whole, is slowly on the mend. CBER Associate Director, Matt Murray believes that state unemployment will average up to 10.4% this year, and stay above 10% through 2011. He also said that Federal stimulus spending helped to stabilize the economy, and add 1.3 percentage points to the gross domestic product in 2010.

"The recession that began in December 2007 has now had more than two years to wreak havoc on the state economy," Mr. Murray said. But the author also concluded that “It will take well over two years for the economy to fully rebound."

In terms of the number of average days on the local market, January 2010 saw a small increase over figures from the same month in 2009, and added slightly over a month from December 2009. Many economists attribute this pattern to a tightening of pressures in the financial markets, officials said.