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Chattanooga home prices rose more than three times the rate of inflation rate over the past year but still remained one third cheaper than the national average, according to a new report from the National Association of Realtors.
The median price of existing homes sold in the Chattanooga metropolitan market this spring rose 5.1 percent over the same time a year ago to $135,200. Although home appreciation tripled the 1.7 percent increase in the consumer price index during the same period, the gains in Chattanooga home values were still less than half the robust 12.2 percent gain in median prices nationwide and only a fraction of the torrid 38.9 percent jump in home values in nearby metro Atlanta -- one of the hottest markets for home appreciation in the past year.
Chattanooga, which tends to be a more stable housing market than most other mid-South cities, didn't experience as great of a drop in home prices during the Great Recession. But Chattanooga also is not showing as big of a bounce back as most other markets as the housing market recovers.
"Prices are not going through the roof, but there's definitely more activity now and more optimism in the market," said Henry Glascock, a Chattanooga real estate appraiser who follows the local housing market. "A lot of people who put off buying decisions are getting back in the market and with more activity we're seeing a more active and predictable market and prices are edging higher."
Mark Blazek, president of the Greater Chattanooga Association of Realtors, said despite a drop in sales and median prices in June, the market overall is still showing a steady recovery.
"The economy, which generates the jobs that fuel housing demand, continued to improve at a moderate pace during the second quarter of 2013," he said. "Budget sequesters and sluggish export growth have taken a back seat to housing recovery and stronger consumer spending."
Nationwide, the National Association of Realtors said median home prices were up in 87 percent of U.S. markets. Nearly a third of the U.S. markets showed strong double-digit gains in median home prices over the past year, including Atlanta, Birmingham and Memphis.
The national median price for an existing single-family home was $203,5090 in the spring quarter, up 12.2 percent from the year-ago level. Distressed home sales, either foreclosures or short sales, accounted for only 17 percent of housing sales this spring, down from 26 percent a year ago, according to the National Association of Realtors.
"There continue to be more buyers than sellers, and that is placing pressure on home prices, with multiple bids common in some areas of the country," said Lawrence Yun, chief economist for the National Association of Realtors. "Higher interest rates are now causing sales to level out, but the tight supply conditions look to be with us for the balance of the year."
Contact Dave Flessner at email@example.com or at 757-6340.