Sales fall 37% for new houses

Sales fall 37% for new houses

February 27th, 2010 by Ellis Smith in Business Around the Region

House sales in the Chattanooga area fell 37 percent to 297 in January from 474 in December, but sales are up slightly from the 290 recorded in January 2009, according to the Chattanooga Association of Realtors.

Nationally, home sales dropped 7.2 percent, figures released by the National Association of Realtors indicated.

Sales dropped throughout the country, falling the most -- nearly 11 percent -- in the Northeast, The Associated Press said. Sales were down by about 7 percent in the South and Midwest and by more than 5 percent in the West.

"I consistently have maintained that if you look at it over the decade, we are returning to sales like in the 2002-and-back era, what I'm calling a normal market if you take out the heyday years," CAR President Randy Durham said.

Hot sales areas in Hamilton County for January

* Northern Hamilton County/Middle Valley Area -- 32 houses sold

$109,950 median house price

* Brainerd/East Brainerd -- 28 houses sold

$163,500 median price

* Downtown Chattanooga -- 28 houses sold

$23,717 median price

* North Chattanooga -- 23 houses sold

$173,500 median price

* East Ridge -- 14 dwellings sold

$79,950 median price

Source: Chattanooga Association of Realtors

He lamented that the jobs decline in the region is a "stumbling block" to a real estate recovery.

"I'd like to see the needle move much quicker than it has," he said. "There was a slight uptick in unemployment from December of 2009 into January's figure of 9.1 percent. But thankfully, it's still better than the national average."

The median home selling price also fell in January, plunging 11.4 percent to $119,900 from $135,000 the previous month, and was 6.9 percent or $8,900 down from January 2009.

Mr. Durham said this favors house hunters in the short term, and Chattanooga area MLS President Bobby Teems agreed.

"Current interest rates still favor buyers," Mr. Teems said. "But I'm telling my customers to watch for a rise as the year progresses, and I think that trend is one that is being recognized everywhere."

Lawrence Yun, chief economist for the National Association of Realtors, predicted that housing values would begin to increase by the middle of the year.

"New home sales could jump by nearly 50 percent, though from very depressed levels to figures that would be less than half the pace as during the peak sales year in 2005."

The Associated Press contributed to this report.