The greater Chattanooga area has been ranked No. 9 on the Realtor.com 2023 Top Housing Markets forecast. Market areas on the list were selected because they are not only poised to see the strongest combined growth in home sales and listing prices in the coming year, but up to this point they have seen lower price increases and a relatively smaller affordability crunch than other markets across the U.S.
Mainly concentrated in mid-size markets east of the Mississippi, with local industries tied to manufacturing, education, healthcare and government, this year's top 10, in rank order, are:
1. Hartford-West Hartford, Cn.;
2. El Paso, Tx.;
3. Louisville, Ky.;
4. Worcester, Ma.;
5. Buffalo-Cheektowaga NY;
6. Augusta-Richmond County, Ga.;
7. Grand Rapids-Wyoming, Mi.;
8. Columbia, SC;
9. Chattanooga; and
10. Toledo, Oh.
See Realtor.com's 2023 Top housing markets forecast for the full ranking of the 100 largest U.S. markets.
Home sales across the top 10 markets are forecasted to grow by 5.2 percent year-over-year in 2022, whereas the national homes sale projection is for declining sales (-14.1 percent). Additionally, average home prices in the top 10 are expected to increase 7.3 percent – compared to 5.4 percent for the U.S. as a whole.
Projections for Chattanooga:
November 2022 median home price: $397,000;
Forecasted 2023 home sales change: +2.9 percent;
Forecasted 2023 home price change: +8.2 percent; and
Forecasted 2023 combined sales and price change: +11.1 percent.
“The secret is out about the greater Chattanooga area, and with our relatively low cost of living, our ground-breaking internet speeds, and abundance of outdoor activities, our scenic city is positioned to be home to the many newcomers moving to our area,” said Derek English, 2022 president of Greater Chattanooga Realtors.
“Realtors in our area will certainly be ready to provide the expert housing advice of all who move to the Scenic City,” said Mr. English.
"At a time when housing costs are a concern for many, areas like the greater Chattanooga area offer relative affordability, having experienced less of a price surge than other extremely hot, pandemic-era markets. They also have a greater share of homeowners who own their homes outright, without a mortgage, giving more residents equity to build on. In the top 10 markets, about 23 percent of housing inventory is affordable at the median income level, compared to just 17 percent of affordable homes nationally. Better affordability offers some insulation from the impact of rising mortgage rates," officials said.
“As many households keep a close watch on their spending, we expect these top housing markets to be in relatively high demand,” says Realtor.com Chief Economist Danielle Hale. “We’ve seen lower price increases, more general affordability and more use of government-backed mortgage products for veterans, first-time and minority buyers in these top markets, providing opportunities for all home buyers to stretch their homebuying dollars. Many of these areas flew under the radar in the pandemic frenzy, and are now well-positioned to bubble up with solid job prospects without the big-city price tag.”
Top Markets Sidestepped Steep Prices of 2022 -
According to Realtor.com’s analysis, this year’s top 10 housing markets didn’t get as caught up in the wild buying frenzy – and price increases – of 2022 as other areas. Sale prices in the 12 months ending August 2022 increased by 10.5 percent on a year-over-year basis, compared to a growth rate of 12.6 percent for all 100 largest metros. The top markets have also seen less of a dip in sales in recent months, with sales declining by 9.1 percent year-over-year, compared to an average decline of 12.3 percent for all 100 metro areas.
“Made in America” Mid-Sized Metros Poised to Bubble Up -
Representing a shift from remote-work and tech-industry influenced home buying, this year’s top markets have a renewed focus on domestic industry and trade. The pandemic exposed an achilles heel of the far-flung supply chains that had become the norm, namely, that logistics can be disrupted by a wide array of events. This has renewed corporate, government, and consumer focus in these markets where “Made in America” happens. On average, these mid-sized metros employ a higher proportion of workers in manufacturing, government, education and healthcare jobs relative to the 100 largest US metros, while jobs in tech, professional services, information technology and leisure/hospitality are less common in these areas. Having largely avoided the pandemic housing boom that we saw in other markets, home buyers in the top markets can find solid job prospects and affordable housing options.
Buyers Take Advantage of Government-Backed Loans -
Home sales in the top 10 metros also tend to leverage more government-backed mortgage products such as VA loans and FHA loans. Between Jan.-Aug. 2022, the share of mortgaged-sales with a VA loan was 9.4 percent in the top 10 markets vs. 7.5 percent among all the 100 markets reviewed. These types of loans help buyers safely enter the market with lower down payments and often slightly lower mortgage rates.
Realtor.com’s Methodology -
Realtor.com’s model-based forecast uses data on the housing market and overall economy to estimate 2023 values for these variables for the 100 largest U.S. metropolitan statistical areas by population size. These markets are then ranked by combined forecasted growth in home prices and sales. In cases of a tie, forecasted year-over-year sales growth was used as a tiebreaker.