The Chattanooga area real estate market showed a very significant gain over the Second Quarter of 2009, according to data released by the Multiple Listing Service (MLS) of the Chattanooga Association of REALTORS®. In the third three month period of this year, the Southeast Tennessee and Northwest Georgia area saw the sale of 1,624 residential units, a 5.1% decrease compared to the same quarter’s sales in the previous year. However, it is a significantly better performance for the area in comparison to the Second Quarter of this year, increasing from the April through June period by 10.9%.
The continuing economic challenges and worries about consumer confidence continue to weigh down on the real estate market. Home sales generally lead the way in any recovery, but require help from more positive employment numbers to do so. Median price figures for the period witnessed a decrease to $130,000 – a drop of 7% from the 3rd Quarter of 2008. While a positive sign, in terms of affordability, the price drop sometimes might indicate a slower economic outlook. However, the increase of only 4 extra days on the market – from 120 a year ago to 126 in the past Quarter is statistically insignificant.
The National Association of REALTORS® has projected that a discernible turnaround in the unemployment rate could be as far off as the second or third quarter of 2010. That’s not only damaging to the real estate industry, but hurtful to the hard-working members of the public who are still struggling to find work. While it’s been great to see the decline in interest rates, and the wonderful indications of true affordability in our local and regional market, those statistics mean little if potential homebuyers are out of a job. And when they eventually return to the workforce, there may be serious issues about their creditworthiness with some lenders.
It is axiomatic that recovery may come slower to both the Chattanooga real estate market and the State of Tennessee, because our areas were not as deeply affected by the economic slowdown in the early going as were some of the major U.S. markets were.