Tennessee Realtors Look Forward To Tackling Housing Challenges In 2014

Thursday, January 30, 2014

After several years of slow recovery, the U.S. housing market began to show signs of improvement in 2013. Some homeowners saw their home equity grow as home prices rose and single-family home sales increased. However, the market still has its challenges and realtors remain committed to helping build a responsible, sustainable housing market in 2014.

According to National Association of Realtors Chief Economist Lawrence Yun, 2013 was a recovery year, as annual existing-home sales are expected to increase 10 percent over a year ago, totaling just above 5.1 million, and national median existing-home prices are projected to be 11 percent above last year. The 2013 market also experienced a shortage of housing inventory. NAR data showed inventory levels swung from a record high of 11.9 months in July 2010 to a recent low of 4.3 months in January 2013. Recently however, inventories have started to increase—current unsold inventory shows a 5.1-month supply of homes.

“Tight inventory typically means rising home prices,” said Neal Clayton, 2014 president of the Tennessee Association of Realtors (TAR). “This is what we’re experiencing now. Prices have gained 11.5 percent nationwide over the past year, and 5.3 percent in Tennessee, according to the most recent CoreLogic report. An increase in prices has helped lift many homeowners into positive equity again, and foreclosures and short sales have declined. When homeowners benefit from price appreciation and housing equity increases, this helps the economy through greater consumer confidence and spending.”

Despite these positives, housing affordability for some buyers declined in 2013. Mr. Yun predicts affordability will continue to decline in 2014 if mortgage rates continue to rise and particularly if qualifying for a mortgage remains difficult. Tight credit restrictions are preventing some qualified buyers from becoming homeowners and making it more difficult for some homeowners to sell their homes. TAR thinks mortgage availability will only be worsened by regulatory reforms stemming from the Dodd-Frank Act Wall Street Reform and Consumer Protection Act that have gone into effect in January 2014.

“While these new rules reduce risky loan products and establish critical lending protections for consumers, they could also preclude many potential home buyers from entering the housing market,” Mr. Clayton said. “Qualified buyers with good jobs and strong credit histories cannot continue to be turned down for loans. Lenders need to return to sensible lending standards this year.” 

Mr. Yun predicts we’ll continue to see healthy gains in existing-home sales this year, and prices will continue to rise. However, he also projects mortgage rates to rise and inventory shortages to continue.  

Realtors will remain actively involved with lawmakers to ensure housing and homeownership issues are first on the nation’s public policy agenda this year. Several critical issues affecting housing will continue to take precedence this year—such as delaying further flood-insurance rate increases. Also, as debates surrounding federal tax reform likely heat up again this year, realtors will continue to urge the preservation of property and homeownership tax policies.

Realtors also support legislation and regulations to create healthier housing and mortgage markets, something Mr. Clayton says is vital to the recovery.

“Despite the challenges we face in the coming year, I believe realtors are feeling confident and optimistic about the future of the U.S. housing market, and especially the market in Tennessee,” he said. “Homeownership is an investment in our future, and I believe 2014 will present tremendous opportunities for buyers, sellers and investors.”


Commissioners Chide Augusta Developer For Not Talking With Lincoln Park Residents

Some Planning Commission members on Monday chided an Augusta, Ga., developer for not talking with Lincoln Park residents about a proposal to construct 387 multi-family residential units on a 17.7-acre former manufacturing site on Riverside Drive. The location is across from the Boathouse Restaurant. However, Commissioner Don Moon said he might have done the same thing. He said ... (click for more)

Collier Casts Deciding Vote In Denial On 7 Lakes Subdivision Lots Request

New Planning Commission Chairman Ethan Collier does not have to vote often, but he was called on to break a 7-7 tie on Monday afternoon. The issue was a request from developer Emerson Russell that would have allowed the development of three "estate size" lots involving the approval of 10-foot flag lots. Chairman Collier voted to deny the request. Linda Woodall said she ... (click for more)

EPB Says It Did Not Overbill The City; Says City Got $685,877 Break

EPB officials said Tuesday that an exhaustive audit of its street light contract with the city showed that it did not overbill the city. Instead, it said it found that the city was underbilled $685,877. EPB said it only goes back one year on errors so the amount owed by the city would be $178,314. Officials said that would be discussed with the city. Stan Sewell, the city's ... (click for more)

History Center Gets $400,000 Grant From National Endowment For The Humanities

The National Endowment for the Humanities has awarded grants totaling more than $800,000 to three Tennessee projects that aim to display and preserve historical materials. Winning grants Monday included the Chattanooga History Center, which will get $400,000 to install a permanent, multimedia exhibit on the history of Chattanooga. The University of Tennessee-Knoxville will ... (click for more)

I'm Number One In A Round About Way

Roundabouts have been popping up all over Chattanooga over the past few years and for the most part have been successful.  Unfortunately there are some who just don’t get it as I have found out the hard way.    My latest instance was last week when a young woman on her cell phone almost t-boned me as she flew into the roundabout without yielding.  A near miss ... (click for more)

Roy Exum: Judge Philyaw Is The Best

Tomorrow morning there will be a special gathering at the Hamilton County Juvenile Court that will prove to our community that we have perhaps the most innovative juvenile judge in America. Shortly after Rob Philyaw was hand-picked by our Hamilton County Commissioners to fill the remainder of Suzanne Bailey’s term 15 months ago, he found that truancy was a big problem in our schools. ... (click for more)