Chattanooga area home sales jump 21 percent

Chattanooga area home sales jump 21 percent

July 20th, 2012 by Dave Flessner in Business Around the Region

A sold home is seen in this file photo.

A sold home is seen in this file...

Photo by Associated Press /Times Free Press.

By the numbers

• $143,000 - Median price of Chattanooga homes sold so far this year, up 11.4 percent from a year ago

• 664 - Number of homes sold in June by local Realtors, up 21.2 percent from the same month a year ago

• 667 - Number of homes started in the first half of 2012 in the Chattanooga area, up 12 percent from a year ago

Sources: Greater Chattanooga Association of Realtors, The Market Edge

Home sales in Chattanooga rose for the sixth consecutive month in June despite a downturn in sales nationwide.

The Greater Chattanooga Association of Realtors reported Thursday that 664 homes were sold in June by area Realtors, up 21 percent from a year ago. Improving home sales in Chattanooga helped cut the inventory of unsold homes by nearly a fourth and pushed up the median price of homes sold locally by 11.4 percent to $143,000.

"I think the worst is behind us and Hamilton County is doing better than most areas because of the influx of people drawn here by the new industry that has located here," said Jay Bell, president of Bell Development Co. and one of Hamilton County's biggest home builders. "We're certainly not back to where we were a few years ago during the peak. But we're seeing a slow, steady rebound in the market."

After seven years of declining home starts, housing starts in the Chattanooga area also were up in the first half of the year, according to another report released Thursday. The Market Edge, a real estate reporting service based in Knoxville, reported that 667 new homes were started in the Chattanooga area during the first half of 2012, up 12 percent over the same period in 2011.

In the five-county Chattanooga area tracked by Marked Edge, the biggest gain was in Hamilton County where builders started 461 houses this year, up from 374 in the first half of 2011.

Builders are returning to the market as homes are selling at a faster pace. Chattanooga Realtors said that the average home sold last month in 124 days, down by 4.6 percent from the previous month.

"Increased employment, and job creation along with incredible affordability, all contribute to a more positive consumer outlook and spurs confidence to invest in a home," Greater Chattanooga Association of Realtors President Mark Hite said in his monthly report. "Keeping the affordability picture afloat, the Fed has vowed to keep interest rates around 4 percent through mid-2013."

Nationwide, the National Association of Realtors said median home prices rose in June by 5 percent to $189,400.

But Realtor sales of previously occupied homes fell 5.4 percent in June to the lowest level since October.

"It is only one month and the rest of the housing indicators have all continued to show improvement," said Jennifer Lee, senior economist at BMO Capital Markets. "Let's hope this June decline is a blip."

Builders broke ground last month on the most new homes and apartments in four years. And the number of new single-family homes, the bulk of the market, rose for the fourth straight month to the highest level since March 2010.

The Associated Press contributed to this report