published Friday, December 31st, 2010

Chattanooga area housing costs surge along with population


by Kelli Gauthier

If you think it's gotten more expensive to live in Hamilton County, you're right.

While the median cost of home ownership has gone up 33.4 percent since 2000, median income has increased only 23.3 percent. The gap is even worse for local renters, whose costs have gone up 27.5 percent, far outpacing their income growth of 11.1 percent, according to a new study by the Ochs Center for Metropolitan Studies.

Ochs Center President David Eichenthal calls the issue a "different sort of affordability problem."

"Our cost of renting or owning is relatively low compared to other areas around the country ... but wages just haven't kept pace with the cost of housing," he said. "In lots of other places where there's a housing affordability issue, it's based on availability [of housing], but that's not what we're seeing here ... here it's really a wage and income issue."

CHANGES IN POPULATION

2000 / 2009 / % Change

* Hamilton County, Tenn.

307,896 / 337,175 / 9.5 percent

* Walker County, Ga.

61,053 / 64,983 / 6.4 percent

* Catoosa County, Ga.

53,282 / 64,035 / 20.2 percent

* Marion County, Tenn.

27,776 / 28,068 / 1.1 percent

* Dade County, Ga.

15,154 / 16,127 / 6.4 percent

* Sequatchie County, Tenn.

11,370 / 13,319 / 22.4 percent

* Total:

476,531 / 524,303 / 10 percent

Source: Ochs Center for Metropolitan Studies

QUALITY OF LIFE

What's very important to Hamilton County residents:

* Safety from crime: 91 percent

* Quality health care and hospitals: 90 percent

* Quality of schools: 83 percent

* Availability of jobs that pay a living wage: 83 percent

* Clean air: 82 percent

* Clean streets and neighborhoods: 80 percent

* Affordability of housing: 75 percent

Source: Ochs Center for Metropolitan Studies

Despite the increases in cost, people still are flocking to Chattanooga, the report states. In distinct contrast to the 1980s, when Chattanooga had a 10 percent decline in population, the city itself has grown by 10 percent in this decade.

"There is no other U.S. city over 100,000 that can point to that kind of turnaround," Eichenthal said.

Hamilton County, which makes up two-thirds of the population of the metropolitan statistical area, accounted for 61 percent of the region's growth.

Eichenthal said the area's growth likely would have an impact on housing affordability and availability in the future.

But Randy Durham, a Keller Williams broker and president of the Greater Chattanooga Association of Realtors, says he believes it's possible for Chattanooga to remain the affordable city that has made it so attractive.

"As long as we have room to grow geographically, in the foreseeable future we won't run out of land for development, and we'll see the same affordability," he said.

The report also shows how Chattanooga, like the rest of the nation, suffered during the subprime lending crisis.

Between 2004 and 2006, the number of subprime housing loans nearly doubled, reaching a high in 2006 of 2,386. Foreclosures increased by 22.6 percent from 931 foreclosures in 2006 to 1,142 in 2009, the report states.

Within Chattanooga, Durham said there were certain foreclosure "hot spots," such as the Brainerd area, where there was a high concentration of first-time home buyers.

Durham said the report gives reason to be hopeful for Hamilton County's housing future, especially given the relocation and expansion of businesses to the area. Still, there is room for improvement, he said.

"Right now we have a supply of inventory that's higher than sales. We have 13 months of inventory, and to keep a balanced market we need about seven months' supply," he said.

Contact staff writer Kelli Gauthier at kgauthier@timesfreepress.com or 423 757-6249. Follow her on Twitter at twitter.com/gauthierkelli.

about Kelli Gauthier...

Kelli Gauthier covers K-12 education in Hamilton County for the Times Free Press. She started at the paper as an intern in 2006, crisscrossing the region writing feature stories from Pikeville, Tenn., to Lafayette, Ga. She also covered crime and courts before taking over the education beat in 2007. A native of Frederick, Md., Kelli came south to attend Southern Adventist University in Collegedale, where she earned a bachelor’s degree in print journalism. Before newspapers, ...

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SPQR said...

The CTFP and local Chamber of Commerce has made it abundantly clear in the past, with much squishy fanfare I might add, that Mexicans, Guatemalans, etc have comprised the majority of Hamilton counties' growth. In 2008 alone there were 10,423 Mexicans etc who settled here. On the ground that hasn't changed except on an upward curve.

You don't improve anything, except a handful of business parasites' bank accounts, by allowing reckless Third World immigration to go unchecked.

December 31, 2010 at 9:01 a.m.
rolando said...

You are seeing what a business-friendly government can do for an area. Ya think there is just maybe a connection between the population growth and the new Chattanooga competitive spirit, stance, and tax-advantages for new business might be a factor?

Naw, that's not it at all...it has got to be the expensive social programs, our wonderful schools, and wealth redistribution that's turned the trick, right? Yeah, right.

The influx of people are demanding housing, food, clothing, etc. which raises the demand while more people means more job applicants who raise the supply of workers which means lower pay.

It is called supply and demand. More people = lower wages; greater demand for housing = raised rent or sale value. Normally when demand goes up, so does the supply and vice versa; they tend to balance each other. Unfortunately, there is a lag between demand for housing and the creation of new housing, so the price goes up.

When the people sooner or later pack up and leave here -- as they are doing in disgust with other failed cities -- the prices will come down -- just as they are dropping in other cities.

January 2, 2011 at 10:20 p.m.
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