Last week, more than 30 Tennessee Realtors travelled to Charleston, S.C., for the annual state convention. While enjoying the coastal climate, we collectively implemented policy changes and examined the political future of our state.
We also had ample opportunities for professional development, and prepared our businesses and the association for serving our members and clients in 2017. And we installed the new state officers and showed our appreciation to Chattanooga Realtor Randy Durham, who’s serving as president of the Tennessee Association of Realtors this year.
During the convention, several Chattanooga Realtors stepped into state leadership roles, including Kathy Tucker as 2017 Secretary/Treasurer and Travis Close, who continues to serve as 2016-2017 regional vice president. Also, Jennifer Grayson was installed as the 2017 president of the Tennessee Women’s Council of Realtors (WCR) and Susan Barnette as the 2017 president-elect of the statewide WCR.
One of the best parts of the conference was hearing from realtor.com’s chief economist, Jonathan Smoke, who highlighted many of the great fundamentals of Tennessee’s strong real estate market. For starters, Tennessee has higher employment rates than the national average. Also, people are moving to Tennessee, which leads to higher incomes in the state. And the affordability of homes in Tennessee, and specifically in Chattanooga, is a strength of our area. You can still buy a home in Chattanooga and be in a good financial situation compared to the median household income. Finally, Tennessee has some the best interest rates in the country. Just like gas costs more in some areas of the U.S., interest rates cost more, too. By the end of 2016, Smoke predicts that Tennessee will be back to 2006 levels of home sales after having the fastest home sales market in history.
Some people start to cry “Bubble!” when they hear such statistics, but the fundamentals for a long-term investment in real estate shows huge potential for continued growing home prices. There will be years when the market corrects itself and prices level off or drop a bit; that is to be expected. But Smoke anticipates that household growth will be good in Tennessee and in the Chattanooga area for the next five years. As Tennessee keeps growing in population, the existing home stock will not be able to keep up with demand. This dynamic will continue to push Chattanooga house prices up.
Currently, the rental market has the highest rental rate in years. Despite the enormous amount of newly constructed apartments, there are still more rental households than rental units. As rental rates keep rising, it becomes less expensive to buy than rent homes.
Some have tried to claim that America’s largest generation of home buyers – Millennials, ages 25-35 – don’t want to buy homes. Studies by the National Association of Realtors determined quite the opposite. Millennials want the American Dream just like anyone else, and about 45 percent of them are buying homes. This percent is consistent with other generations, of which about 45 percent also purchased homes when they were ages 25-35. Also, Smoke reported that 71 percent of adult Millennials looked at houses online in July, which shows their interest in entering into home ownership and becoming a strong player in driving the real estate market.
Across Tennessee and here in Chattanooga, the fundamentals of supply and demand over the long haul will lead to continued growth in home values. Smoke anticipates that consumer confidence will not be shaken by whomever ends up in the White House after the November elections. Regardless of which candidates prevails as president, people need a place to live. Currently, we don’t have enough units to accommodate every buyer, and this shortage will continue to drive housing prices and the demand for construction upward. If you’re on the fence about entering the real estate market, the time to invest in your future is now. Call a Realtor today to help you navigate that investment.
The Greater Chattanooga Association of Realtors is The Voice of Real Estate in Greater Chattanooga. The Association is a regional organization with more than 1,700 members, and is one of more than 1,400 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. The Greater Chattanooga Association of Realtors services Hamilton and Sequatchie counties in southeast Tennessee, and Catoosa, Dade, and Walker counties in northwest Georgia. For more information, visit www.gcar.net.