The local real estate market continued to gain ground in the new, emerging economy in Chattanooga, according to statistics released Thursday, in both number of homes sold and median price, according to data released by the Multiple Listing Service (MLS) of the Chattanooga Association of REALTORS.
In March of this year, Southeast Tennessee and the Northwest Georgia area saw the sale of 577 residential units, a 42.1% increase compared to the previous month’s sales, and a 29.1% increase over the same period one year ago.
For the month of March, the local median home price was $120,000. That represents a slight increase of .4% from February and a decrease of 7.6% from the same month last year.
The Realtors Association reported that, in terms of the number of average days on the local market, March 2010 crept up by a few days over figures from the previous month this year, and somewhat more from the same time in 2009.
“The new 'normal' looks a lot like the old 'normal' to me”, said Randy Durham, president of the Chattanooga Association of Realtors. “By that, I feel strongly that while our March sales are very impressive, it’s not greatly above my expectations of what our market should be doing in terms of its capabilities.
"Time will tell how much we’ve been aided by the homebuyer’s tax credit for both new buyers and the existing buyers credit that was added last fall by Congress. Anecdotal evidence suggests that it was a strong component in our marketplace that moved potential buyers off of the fence, and got them into their new homes. Since that credit expires at the end of April, when new purchases must be under contract, I’ll be anxious to see how continued sales play out in the coming months.”
Lawrence Yun, NAR chief economist, said the improvement (nationally) is another hopeful sign. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten,” he said. “We need a second surge to meaningfully draw down inventory and definitively stabilize home values.”
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 across the U.S. from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.
Chattanooga Area MLS President Bobby Teems said, “It was gratifying to see the employment picture improve, as well. The drop from 10% to 9.8% in the most recent reporting period might not seem like much, but it’s definitely going in the right direction. When people aren’t working, they’re not able to participate in an improving economy and every segment of the economic picture suffers, none more so than those seeking jobs themselves.”
Mr. Teems continued, “Employment is always a lagging indicator, so I feel that the decrease might indicate that the local recovery could have actually gotten underway earlier this year, despite the terrible weather for sales in our industry this past January.
“Mortgage rates will also continue to define the market for sales, and we’re waiting for the expected spike, later this year.”
Mr. Durham also said foreclosures continue to be a problem across the U.S., and to some extent in the Greater Chattanooga Area. “I will not believe that we’re completely ‘out of the woods’ until we see a significant reduction in local foreclosures. I hope that more people in our area who find themselves facing this type of financial distress will avail themselves of the wide variety of programs and information accessible from all sources, including REALTORS and their lenders. This has grown from a sporadic problem to a national tragedy, and more so since help and solutions are readily obtainable.”
In a recent report from Raymond James and Associates, Dr. Scott Brown said there is good evidence that the economy is growing again. Recent data reports have been consistent with a gradual recovery. While the advance estimate of 1Q10 GDP growth won’t be released until later this month (and most March data have yet to arrive), it appears likely that real GDP growth may have been close to a 4% annual rate. As with fourth quarter 2009 GDP growth, much of that is expected to be inventories (shifting from a moderate decline to a moderate increase). Underlying demand still appears relatively lackluster at this point in the recovery, but it is increasing, CAR officials said.
HAMILTON COUNTY
SALES/MEDIAN PRICE
MARCH 2010
AREA
# SALES
$ MEDIAN SALES
Tiftonia-Lookout Valley-Elder Mountain
5
$100,000
Downtown-St. Elmo-Highland Park-Avondale-Missionary Ridge
37
$31,500
City of East Ridge
27
$84,500
Brainerd-East Brainerd
48
$124,950
Hwy 58-Eastdale-Dalewood-Tyner
20
$100,600
No. Chattanooga-Mountain Creek-Riverview-Rivermont
34
$137,000
Red Bank City Limits
14
$112,750
Hixson-Chattanooga City Limits
21
$165,000
Signal Mountain-Walden-Suck Creek
9
$289,000
Lookout Mountain
4
$280,825
Hwy 58-Harrison-Georgetown
28
$120,450
No. Hamilton County-Soddy-Bakewell-Sale Creek-Middle Valley
57
$143,000
Volunteer Site to Hunter Road
9
$165,000
East Brainerd (Cty)-Ooltewah
30
$162,000
Ooltewah-Snow Hill
14
$200,450
Collegedale (Includes Apison)
5
$200,000
TOTAL
362