Local home prices are rising, but a new survey shows that home buyers will still find most Chattanooga residential properties priced significantly cheaper than in other markets and below the prices of a decade ago before the Great Recession.
"We're getting back to a more normal market with slow, steady appreciation in home values. But Chattanooga remains a very affordable area," said Dan Griess, general manager for the Chattanooga region for Crye-Leike Realtors, one of the largest real estate firms in the area with 250 agents.
The National Association of Realtors estimates that Chattanooga home prices rose a healthy 5.7 percent in the past year. But the gain was less than half the 12.5 percent gain in median home prices nationwide over the past year.
The median price of homes sold this summer in Chattanooga, $139,500, remained a third less than the U.S. average of $207,300, according to the National Association of Realtors.
Nationwide, home prices showed the strongest annual growth in nearly eight years during the third quarter. Fifty-four of the cities included in the Realtors data had double-digit price gains, including top ranked Atlanta, Ga., where median home prices spiked by nearly 42 percent in the past year.
"We never had the dramatic ups and downs here in Chattanooga that we saw in some bigger markets like Atlanta," said Henry Glascock, a real estate appraiser in Chattanooga. "Prices did come down in the recession, but this has been a more steady, slow-growth market."
Although mortgage rates and home prices have moved higher in recent months as the economy has improved, Chattanooga home prices are still relatively attractive even as the market improves, Realtors said. Griess said overall sales in the market for his company are up about 3 percent so far this year, but his Ooltewah office is enjoying a 37 percent jump in sales.
"The recovery is helping nearly everyone, but we're seeing tremendous activity in Ooltewah," he said.
Randy Durham, a real estate agent for Keller Williams who is attending the National Association of Realtors convention this week in San Fransisco, said Chattanooga's real estate market continues to heal from the housing slump of 2008-2009.
"This is the fifth most affordable year in the past 40 years for buying a home nationwide and Chattanooga is certainly among the most affordable markets," he said. "We never fell as much as some markets but our prices are not spiking as much now as some other markets are seeing."
Lawrence Yun, chief economist for the National Association of Realtors, said home buyers are more confident and more willing to purchase a home than at any time in the past five years.
"Rising prices and higher interest rates have taken a bite out of housing affordability," Yun said. "However, we have the ongoing situation of more buyers than sellers in the market, so lower sales will help to take the pressure off home price growth and allow them to rise slowly at a single-digit growth rate in 2014."
Contact Dave Flessner at email@example.com or at 757-6340