As anticipated at the outset of the year, demand has remained high through the first three quarters of 2016, propping up sales and prices despite heavy reductions in inventory and months of supply across the country.
With rental prices and employment opportunities in a consistent climb, year-over-year increases in home buying are probable for the rest of the year but not guaranteed.
Pending Sales were up 12.3 percent to 839 and is above the 12-month average of 811. Closed Sales were up 5.8 percent to 833, and this is in line with what our market has seen all year. Overall, the 12-month average for Closed Sales is up 8.5 percent.
Inventory levels shrank 21.2 percent to 3,543 units, which is the lowest number we’ve seen all year. However, New Listings in the Chattanooga region decreased 5.0 percent to 1,068, which is slightly under the 12-month average of 1,157.
Prices continued to gain traction. The Median Sales Price increased 12.3 percent to $169,550. The Average Sales Price increased 8.7 percent to $95,486.
In looking at Median and Average Sales Price, it’s important also to consider the Housing Affordability Index. For September, the local market’s index is down by 4.3 percent. Yet, the index’s 12-month average is up .8 percent. And seller’s list prices are in line with buyer expectations, as September saw a 1.1 percent increase to 95.1 percent of Original List Price Received.
Days on Market was down 14.9 percent to 57 days. Sellers were encouraged as Months Supply of Inventory was down 26.7 percent to 4.4 months.
In general, today’s demand is driven by three factors: Millennials are reaching prime home-buying age, growing families are looking for larger homes, and empty nesters are downsizing. However, intriguingly low interest rates often prompt refinancing instead of listing, contributing to lower inventory. Recent studies have also shown that short-term rentals are keeping a collection of homes off the market.
If you’re ready to enter the market as a first-time buyer, are an expanding family in need of more space, or are looking to downsize, contact a Realtor today.
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.