Tuesday, July 16, 2019 - by Kim Bass, president, Greater Chattanooga Realtors
The relationship between our nation’s economy and the housing market is complicated. On one hand, residential real estate markets across the country are performing well within an economic expansion that will become the longest in U.S. history in July. However, there are signs of a slowing economy.
The economy is still performing well due to factors such as low unemployment and solid retail sales, but uncertainty remains regarding trade tensions, slowed manufacturing and meek business investments.
The Federal Reserve considers 2.0 percent a healthy inflation rate, but the U.S.
is expected to remain below that this year. The Fed has received pressure from the White House to cut rates in order to spur further economic activity, and the possibility of a rate reduction in 2019 is definitely in play following a string of increases over the last several years. When you put all of these factors together, you can see the delicate balance between the housing market and our economy.
Locally, in June New Listings in the Chattanooga region decreased 7.9 percent to 1,283. Pending Sales were up 11.1 percent to 982. Inventory levels shrank 6.3 percent to 2,794 units.
Prices continued to gain traction. The Median Sales Price increased 7.5 percent to $214,900. Days on Market was up 4.7 percent to 45 days. Sellers were encouraged as Months Supply of Inventory was down 11.1 percent to 3.2 months.