The end of homebuyer tax credits this spring helped push up housing sales and stabilize home prices in Chattanooga, according to Realtors' sales data released Wednesday.
Home sales through Chattanooga's multiple listing service jumped 30.5 percent in the second quarter compared with the depressed levels of a year ago.
After three years of falling home values, the median price of existing homes sold in Chattanooga this spring was unchanged from a year ago and remained nearly 25 percent below the U.S. median, the National Association of Realtors reported.
"The homebuyers' tax credit and the extension of the closing date made for a winning combination for everyone, but now, it's over," Chattanooga Multiple Listing Service President Bobby Teems said. "Without a doubt, we expect a sharp drop-off in sales as the year progresses."
To help spur the housing market last year, Congress granted an $8,000 tax credit for first-time homebuyers and a $6,500 credit for others who purchased a home by April 30 and closed by June 30.
During April, May and June, Chattanooga Realtors sold 1,919 homes in Southeast Tennessee and Northwest Georgia, or 449 more homes than in the same period a year ago in the region.
The average number of days it took to sell a Chattanooga house dropped from 132 a year ago to 128 this year, according to the Chattanooga Association of Realtors.
Improving sales helped stabilize prices after falling in each of the previous three years.
The National Association of Realtors reported that the median price of homes sold in Chattanooga this spring was $125,700, the same as a year ago and $12,800 more than this winter.
Nationwide, median home prices in the second quarter edged up 1.5 percent over a year ago to $176,900, according to NAR figures.
Randy Durham, president of the Chattanooga Association of Realtors, said the market is showing signs of improving, but he said the confidence of many homebuyers "has been badly shaken" by falling home values and rising unemployment. Despite Chattanooga's relatively favorable prices for home buyers and near record low mortgage rates, Durham said some buyers remain cautious about the economy.
"While I continue to believe that the worst of this terrible recession is behind us, I also think that there are other very serious concerns that must be addressed, including unemployment and persistent difficulties in the lending market," he said.
The lowest mortgage rates in decades haven't been enough to energize buyers. Home loan applications were virtually flat last week, the Mortgage Bankers Association said Wednesday.
Chattanooga home prices showed signs of stabilizing despite an increase in foreclosures, however. Through July, the number of Hamilton County properties lost through foreclosure, 875, was up 8.3 percent over a year ago, according to the Hamilton County Register of Deeds.