Chattanooga, one of the least expensive housing markets in the South, got even more affordable at the end of 2007, according to a report released Thursday by the National Association of Realtors.
The median price of existing homes sold by Chattanooga Realtors dropped nearly 10 percent in the fourth quarter of 2007 compared with a year earlier. The Realtors’ group reported that the median price of an existing home sold in Chattanooga was $121,600 in the fourth quarter of 2007, or 41 percent below the national median price of $206,200.
“When you close the books on 2007, we sensed there would be a slowdown in the market,” said Jason Farmer, the 2007 president of the Chattanooga Association of Realtors.
Mr. Farmer said the national mortgage crisis affected the local market, “but as a testament to Chattanooga real estate, we have finished our year as the third best on record.”
Among 150 metropolitan cities reporting data to the National Association of Realtors, Chattanooga ranked in the lowest 20 percent in the price of a typical home. In the Southeast, only Jackson, Miss., reported a lower median home price in the fourth-quarter report.
In a separate report that includes both new and existing homes, the Chattanooga Association of Realtors said Thursday that the median price of all homes sold in 2007 was up 2 percent from the prior year.
In the fourth quarter of 2007, Realtors here sold 1,150 houses, down 20 percent from the third quarter and down 18 percent from a year ago, according to the Chattanooga Association of Realtors. Chattanooga’s record real estate year was 2006 with 8,407 sales, records show.
“This is a great market to buy into for affordability,” said Ben Kelly, president of Prudential Realty Center, one of Chattanooga’s biggest real estate agencies. “First-time home buyers or people coming here from the Rust Belt or other parts of the Sunbelt find this is a great place to buy.”
Realtor William Weathers, owner of Re/Max Properties’ Shallowford Road office, said cheaper land, insurance and labor here helps keep home prices down and is beginning to attract many home buyers from large and more expensive coastal cities.
“Anybody coming here from a big city is usually pleasantly surprised by our prices,” he said. “With the water shortages in Georgia, we hope even more people will look at moving this way.”
Chattanooga Realtors insist that, despite the report of the drop in fourth quarter median prices reported by the National Association of Realtors, local home values are rising over time. The Office of Federal Housing Enterprise Oversight estimated last fall that Chattanooga home prices had risen an average of 32.5 percent in the past five years, or twice the general rate of inflation.
“While real estate saw a bit of a slowdown, our median price actually showed growth (for all of 2007),” said Randy Durham, president of the Chattanooga Multiple Listing Service. “That’s a good sign that points to the strength of the local market.”
Nationwide, median home prices ranged in the fourth quarter from $72,600 in Youngstown, Ohio, to $845,300 in San Jose, Calif.
The National Association of Realtors found that median home prices fell in 77 of the 150 metropolitan areas surveyed. The largest price declines were found in Lansing, Mich., Sacramento, Calif., Jackson, Miss., and Riverside, Calif., which posted price declines of 17 percent to 19 percent.