Home prices not falling as far in Chattanooga

Home prices not falling as far in Chattanooga

August 13th, 2009 in News

Home prices continued to fall this spring, but the decline in the Chattanooga area was less than a third as much as the nationwide average, according to the National Association of Realtors.

The median price of existing single-family houses sold by Realtors during the second quarter dropped by 5.1 percent in Chattanooga compared with a year ago. Nationwide, Realtor-assisted home sales dropped 15.6 percent in price over the same period.

"The economic downturn is hurting home sales and prices in all areas," said Kathy Tucker, president of the Chattanooga Realtors' Multiple Listing Service. "But Chattanooga has been and continues to be a very stable market. We didn't have the price spikes that other areas had in the past, but that puts us in better shape right now."

Nationwide, the median price of home sales in the second quarter fell by $32,300 from a year ago to $174,100. The drop was particularly pronounced in Atlanta, where the median price of existing homes fell by 23.3 percent over the past year and fell below Chattanooga's median price for the first time since such records have been kept.

Shea Zimmerman, a Marietta, Ga., Realtor who is president-elect of the Atlanta Board of Realtors, said the market is the worst she has seen in her 22 years in the business.

"But while many markets are down, some markets are doing better," she said. "Home values haven't dropped as fast as median prices, because a bigger share of the homes that are being sold are to first-time buyers or involve foreclosures."

Georgia is among the top 10 states for foreclosures. RealtyTrac said July foreclosure notices across Georgia were up by more than 10 percent from a year ago to a record 11,136 last month.

The foreclosure rate is running 40 percent lower in Tennessee, however.

Ms. Tucker and other local Realtors believe the worst of the downturn may be in the past in Chattanooga after declines in both home sales and prices in the second quarter of the year.

The Chattanooga Association of Realtors reported Wednesday that local Realtor-assisted home sales in the second quarter declined by nearly 20 percent. In the second quarter of 2008, local Realtors sold 1,740 homes. In the spring of 2009, local Realtors sold 1,450 homes.

"While local home sales are behind the same period last year, we've seen them trending upward in our monthly reports as local consumer confidence continues to grow and buyers are taking advantage of the $8,000 first-time buyers' credit," said Nickie Schwartzkopf, president of the Chattanooga Association of Realtors.

Trey Corum of Re/Max Properties said there still are problems getting people financing to buy homes.

But he said that "activity is definitely buzzed" and people are feeling better about selling their homes.

Mr. Corum said future activity in the market is contingent on interest rates staying down.

Ricky Haynes of Re/Max Properties also said activity is up, and the stimulus package aimed at first-time homebuyers is kicking in.

"A whole lot of people are looking," he said.

Staff writer Mike Pare contributed to this story.