Chattanooga home prices up by third-largest rate in country

Chattanooga home prices up by third-largest rate in country

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

Photo by Laura McNutt/Times Free Press.

With more buyers and fewer houses for sale, the listed price of houses in Chattanooga is on the rise.

Chattanooga had the third-highest gain in the listed price of homes of any metropolitan area in the country in the past year, according to a new report about homes listed last month on Realtor.com, the nation's biggest online list of real estate inventory.

The typical home on the market in Chattanooga was listed for $179,900 during May, or 24.1 percent more than the listing price in Chattanooga a year ago.

Only the previously depressed housing markets in Phoenix and Santa Barbara, Calif., had a bigger jump in list prices over the past year.

"It's a definite sign that the market has turned around and is picking up," said Mark Hite, president of the Greater Chattanooga Association of Realtors. "Inventory is down and sales and prices are up."

Nationwide, the average list price of homes is up 3.2 percent in the past year, according to Realtor.com. Even with Chattanooga's bigger increase in prices in the past year, homes prices in Chattanooga still averaged 7.7 percent less than the U.S. average last month.

"We may not be ready to say the market has bottomed out in all areas, but it's at least stabilizing on a national level," said Jennifer DuBois, director of Realtor.com. "There is more buyer confidence as lower mortgage rates are cutting the costs of borrowing."

The Zillow Mortgage Marketplace reported Tuesday that the rate on 30-year fixed mortgages is 3.48 percent, down eight basis points from last week and the lowest rate since Zillow began tracking long-term mortgage rates.

DuBois said Chattanooga also has benefited by its favorable employment market. In April, the most recent month for which figures are available, Hamilton County's 7 percent jobless rate was 1.1 percent below the comparable U.S. rate.

"Jobs are a big driver of home sales, and Chattanooga's job market is better than in many cities," DuBois said.

While the actual sales price gains are not as large as the increase in list prices, median sale prices are rising as competing offers are being made for some houses.

In St. Elmo, an Alabama Avenue house recently sold for $110,000 after competing offers pushed up the sales price above the initial $108,700 list price. The 82-year-old house was on the market less than a week.

"Alabama Avenue is an area where people want to live and everybody seemed to want this house," said Andy Bond, a Keller Williams agent who expects to close on his 42nd house this month since he entered the real estate business 13 months ago. "The market is definitely improving."

The median sales price for homes sold by Chattanooga Realtors in May was $137,000, up 9.9 percent from the $124,700 median price for homes sold in the same month a year earlier, Hite said.

The available inventory of homes listed on Chattanooga's Multiple Listing Service is down 19 percent from 6,114 in May 2011 to 4,915 last month.

"We're not back to the sales or prices we saw five years ago, but the market is improving in most cities," DuBois said.