Community News North Shore demand forces Red Bank property values up

Community News North Shore demand forces Red Bank property values up

May 10th, 2017 by Emily Crisman in Community North Hamilton
Red Bank Mayor John Roberts attends an event at the Tennessee Riverpark to announce the Mayors' Smoke Free Community initiative on Monday, Oct. 12, 2015, in Chattanooga.

Red Bank Mayor John Roberts attends an event...

Photo by John Rawlston /Times Free Press.

Property values in Red Bank have been rising over the past few years, with new construction and a lack of inventory in the booming North Shore area driving increased interest in Red Bank from both potential homeowners and investors.

According to the Greater Chattanooga Association of Realtors' 2015 Annual Market Report, from 2014 to 2015 the median home price in Red Bank rose by 26 percent, from $100,825 to $127,000 — a greater increase than anywhere else in the Chattanooga area in that time period aside from Dade County, where the median home price rose by 28.8 percent. Compared to other areas of North Hamilton County in the same period, median home prices rose by 9.4 percent in Bakewell/Lakesite/Sale Creek/Soddy and 3.9 percent in Chattanooga, and decreased by 1.1 percent in Hixson.

Red Bank's rapidly rising median home price leveled off in 2016, dropping by 2.4 percent, from $127,000 to $124,000.

Red Bank resident and Realtor Sonja Millard said home values throughout the North Chattanooga area are rising, and the Red Bank market is positively affected by that trend.

"A good listing will go within a week," she said of Red Bank and North Chattanooga properties.

She believes one reason for the rising values and interest in Red Bank is the lack of inventory in North Chattanooga, where she said it's become difficult to find a home under $200,000, so buyers are now looking to Red Bank for homes in the $150,00 to $200,000 price range.

According to GCAR, since March 2017 there were 26 home sales between $150,000 and $200,000 in Red Bank, compared with 14 in North Chattanooga. Currently there are 15 homes in Red Bank in that price range under contract pending sale, and just two in North Chattanooga.

Millard said she also thinks new construction in Red Bank — such as the single-family, Craftsman-style homes in The Cottages at Ashmore neighborhood on Ashmore Avenue — are helping to drive up values of surrounding homes as well as to increase interest in Red Bank among younger buyers.

"I think another thing Red Bank has going for us is the city services," she said. "When you call the police or fire department, they're there in five minutes."

Red Bank Mayor John Roberts said the low number of homes on the city's list of back-tax properties this year is also a sign that the city is making economic progress. He recently signed away the city's interest in two parcels of back-tax property that were sold to investors in Hamilton County's 2016 property tax sale.

"This is extraordinary that there are only two," said Roberts, adding that when he first joined the board several years ago the list was far longer.

Roberts explained that when a person gets behind on paying their property taxes, after four years Hamilton County and the city take joint ownership, and investors can bid on the property in the county's annual property tax sale held in June. If the property is sold, the owner has a year to reclaim their property by paying their taxes in addition to the price paid by the purchaser.

In these two instances, neither of the properties have been reclaimed, so the mayor signed a deed allowing ownership to be transferred to the purchasers, and the amount paid for the properties will be split between the city and county.

"It's an indicator of improving economic conditions in Red Bank, because it shows people now have the income and can afford to pay their tax bill every year," explained City Manager Randall Smith.

Roberts said it's also a positive sign that investors are now interested in purchasing parcels in Red Bank at the county property tax sale. Arnold Stulce, who has been the city's attorney for more than 30 years, said this hasn't always been the case.

When no one bids on a parcel of back-tax property and it becomes joint property of the city and county, the city has in the past reimbursed the county for its share of back-taxes to take full ownership of those properties, though it wasn't required to do so, because the city could then either demolish or maintain them to prevent them from becoming eyesores, Smith said.