Home sales dropped 6.5 percent in December to 474, down from 507 in November, according a report from the Chattanooga Association of Realtors.
However, the data showed December home sales were up 9.7 percent from December 2008, when only 432 homes were sold.
Randy Durham, president of the association and a Realtor with Keller Williams, said the housing market is returning to normal following unusually high sales in the previous two years fueled by what he called "loose money."
"We can't get hung up comparing the last two to three years. We need to look at it over a longer period of time," Mr. Durham said. "We're going to start floating on those levels like you saw in 2000 through 2003."
The local median home price in December fell 1.3 percent to $128,250, a decrease of 5.2 percent from the December 2008 median price of $135,300, according to the report. The average number of days a house spent on the market lengthened to 126 in December from 114 the month before, up from 110 days in December 2008.
Dr. Lawrence Yun, chief economist for the National Association of Realtors, said a number of economic factors should keep the housing market steady through 2010.
"The tax credit impact in the first half of the year and expected job-growth impact in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers," Mr. Yun said.
Bobby Teems, president of the Chattanooga Area Multiple Listing Service, said unemployment will be a key factor in the housing market's recovery.
"I was very pleased to note that unemployment in our area has dropped a full tenth of a point to 8.8 percent in just the past month alone," Mr. Teems said. "But the staggering levels of both the deficit and the total national debt we're piling up are going to cause both near and long-term difficulties if we cannot get federal spending under control."
Area home sales in the past 10 years peaked in 2006, with 8,176 homes sold, before beginning a three-year slide to 5,705, according to a year-by-year analysis provided by the Chattanooga Association of Realtors. The analysis showed median home prices in the 10-year period topped out in 2007 at $139,750, before tipping downward the following year to $137,825 and $129,900 in 2009.
For the decade, Chattanooga home sales were lowest in 2000, with 4,774 homes sold at a median price of $100,000, and with an average of four months on the market.
Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...