Chattanooga house prices one-third below U.S. average

Chattanooga house prices one-third below U.S. average

May 10th, 2013 by Dave Flessner in Business Around the Region

Workers cut lumber while other members of their crew build the framework of a new home.

Photo by Jake Daniels /Times Free Press.


This story is featured in today's TimesFreePress newscast.

Illustration by Laura McNutt /Times Free Press.

Illustration by Laura McNutt /Times Free Press.

For the second time in four years, Bill and Dawn Skowronnek are looking to buy a house on Signal Mountain - even though Bill's job is now in Atlanta.

The Chicago natives, who came to Chattanooga four years ago after living in California and Oregon, moved to an Atlanta suburb a couple of years ago but soon missed their former home and friends on Signal Mountain.

"We had moved to Atlanta, but after being there about a year, we decided to move back up to Signal Mountain because we missed the area so much," said Bill Skowronnek, who still commutes to his insurance manger job in Atlanta while his family lives in a rented house on Signal Mountain. "This is just great a place to live so we're looking to buy again on Signal Mountain."

With mortgage rates hovering near historic lows and home prices in most markets still below their levels before the recession, the Skowronneks and other home buyers are poised to buy into what Realtors say is still a favorable market for buyers.

But opportunities are growing more limited.

"The inventory is definitely getting tighter, especially in high-demand areas like Signal Mountain," said Doug Lawrence, a local Realtor who proclaims in a billboard at the foot of Signal Mountain that the market is "about sold out" and he "needs more listings."

The Greater Chattanooga Association of Realtors reported Thursday that home sales in the first four months of 2013 were up 16.5 percent over 2012.

Despite the gain, a separate report from the National Association of Realtors on Thursday said the median home price in the Chattanooga area in the first quarter of 2013 was up a 0.6 percent from the first quarter of last year.

The median price of $119,900 for homes sold in Chattanooga in the first three months of 2013 was 32.1 percent below the U.S. median sales price of $176,600. Nationwide, home prices jumped an average of 11.3 percent in the past year, according to the National Association of Realtors.

"The supply and demand balance is clearly tilted toward sellers in a good portion of the country," said Lawrence Yun, the Realtors' chief economist.

Mark Blazak, president of the Chattanooga Association of Realtors, said Chattanooga did not suffer as much as most markets during the Great Recession so it hasn't had as big of a rebound.

"We're a more stable and consistent market, but this is shaping up as a terrific year for sales and I think you'll see more price appreciation," he said.

Byron Kelly, president-elect for the Chattanooga Multiple Listing Service, said median home prices appeared constrained, or even down, by the number of discounted properties sold through foreclosure or short sales this winter.

"We're still seeing a healthy and growing market, but banks and others are selling off more of their properties [acquired through foreclosures]," he said.

With the inventory of available homes tightening, Bell Development Co., the biggest home builder in Hamilton County, is building in nine subdivisions in the county.

"We probably have 100 homes in some level of development right now, and our phones are ringing constantly now," said Kaye Ivey, a sales reprentative for Bell. "Five years ago, the market really died, but the temperature of the market these days is definitely improving."

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