Tuesday, August 13, 2019 - by Kim Bass, president, Greater Chattanooga Realtors
In July, the U.S. economic expansion that began in June 2009 became the longest in the nation's history. That run marked 121 straight months of gross domestic product growth and surpassed the 120-month expansion from 1991 to 2001. The average rate of growth during this expansion has been a milder 2.3 percent per year compared to 3.6 percent during the 1990s. Although the economy should continue to perform well for the rest of 2019, some economists see a mild recession on the horizon.
During the record-setting 121-month economic expansion, the unemployment rate has dropped from 10.0 percent in 2009 to 3.7 percent.
Yet, many consumers continue to struggle financially. Low mortgage interest rates have helped offset low housing affordability. However, high home prices are outpacing median household income growth. In a move to stoke continued economic prosperity, the Federal Reserve reduced the benchmark interest rate by a quarter point to about 2.25 percent, marking the first reduction in more than a decade.
The Greater Chattanooga area market remains hot, and the increase in inventory and the increase in homes sold reflect that.
For our area, New Listings in the Chattanooga region increased 3.3 percent to 1,300. Pending Sales were up 15.2 percent to 1,068. Inventory levels shrank 8.4 percent to 2,770 units.
Prices continued to gain traction. The Median Sales Price increased 12.7 percent to $210,250. Days on Market was up 5.0 percent to 42 days. Sellers were encouraged as Months Supply of Inventory was down 13.9 percent to 3.1 months.