Despite the economic slowdown, real estate sales rose in Hamilton County during the past year rose by nearly $300 million from the previous year with gains in nearly all type of property sales, according to the Hamilton County Register of Deeds office.
Bolstered by record high sales of major apartment complexes and record low mortgage rates, property sales in Hamilton County topped $3 billion in the fiscal year ended June 30. That was up nearly 10% from the $2.7 billion in property sales during the previous year.
"Facing the Covid-19 pandemic, job furloughs and downturn in the stock market, the Hamilton County real estate market remains very strong," said Marc Gravitt, the Hamilton County Register of Deeds.
In the past year, the volume of real estate sales was buoyed by growing investor interest in the Chattanooga market, especially for major apartment complexes. Eight of the 10 biggest property sales in the past year involved investment groups from outside of Chattanooga buying existing apartment complexes, including a record $63.1 million sale of the BlueBird Row Apartments behind the Chattanooga Choo Choo to an investment group in San Francisco.
Collectively, investors spend more than $250 million buying multi-family housing complexes in Hamilton County during the past year. Despite the addition of several thousand new apartment units in the county during the past three years, rental rates compared to property values are generally more favorable for investors in Chattanooga than in markets like Atlanta or Nashville.
"Even with the new apartments coming on the market, we're seeing a lot of investor interest in the Chattanooga market," said Brandi Pearl Thompson, president of the Greater Chattanooga Realtors association.
Property sales slumped in late March and in April when many businesses shut down to limit the spread of the coronavirus. But the total value of real estate sales jumped last month to $265 million, or by more than a third from April's $174 million total, Gravitt said.
In the first half of 2020, Chattanooga Realtors sold a total of 4,217 single-family homes, or nearly 6.1% more than in the first half of 2019 which turned out to be a record year for real estate sales in Chattanooga, according to the multiple listing service.
Rising sales, and the limited inventory of homes on the market, have combined to push up housing prices in Chattanooga. The median sales price of homes sold last month by Chattanooga Realtors were up 4.7% from a year ago to $225,000.
The number of homes on the market has shrunk by 45.7% from a year ago, meaning there are often multiple buyers for some properties, Thompson said. The average home sold last month in 41 days.
"Like a lot of Realtors, we're slammed right now," said Sabrina Hagood, a Realtor with Keller Williams. "The market is short of houses right now, especially after the tornadoes displaced some homeowners and some sellers are more reluctant to put their houses on the market during this pandemic."
The upturn in sales has continued in the new fiscal year with $209 million in conveyances in the first eight days of July, according to county records.
Mortgage activity remains even more robust as record low borrowing costs for long-term loans have made refinancing more attractive for many homeowners and home buyers.
Mortgages recorded in the county totaled $4.8 billion in the past fiscal year, up from $3.7 billion in the previous year, Graviitt said.
Last week, the average rate on the key 30-year mortgage loan dropped below 3% for the first time in 50 years.
"Extremely low interest rates had a tremendous impact on refinancing as well," he said.
Lower mortgage rare have not only spurred more new home sales by reducing the monthly mortgage bill; they also are encouraging more homeowners to refinance the debt remaining on the homes they are still paying off by allowing borrowers to lower their monthly payments or shortening the length of their loan repayment by replacing older, higher-rate mortgages with today's lower-rate notes.
"At the current mortgage rate, we estimate that nearly 60% of all outstanding loan balances have at least a half-percentage point incentive to refinance," said Doug Duncan, Fannie Mae's chief economist.
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Top 10 property sales in past year
Eight of the 10 biggest real estate sales in Hamilton County during the past year were of apartment complexes. In the fiscal year ended June 30, 2020, the biggest real estate sales were:
1. The 283-unit Bluebird Row Apartments at the Chattanooga Choo Choo was sold to a San Francisco investment group, $63,15 million
2. The 260-unit Hunters Point apartment complex at 7401 Allenmande Way in East Brainerd was sold to a California-based real estate investment firm for $35.8 million
3. An investment group organized by The Shoptaw Group in Atlanta purchased The Shallowford Apartment Homes with 252 apartments in East Brainerd for $32 million.
4. A Birmingham, Alabama-based real estate investment firm bought the 280-unit Rise at Signal Mountain apartment complex on Mountain Creek Road for $30 million.
5. The 270-unit Meridian at Hamilton Place sold for $22.5 million
6. The 2000-unit Evergreen at Hickory Apartments on Hickory Valley Road was sold to an investment firm based in Alpheretta, Georgia for $18.5 million.
7. The 122-unit Bluff View Apartments on the side of Big Ridge in Hixson were bought by a Mississippi foundation for $18.3 million.
8. An office building at 1301 Riverfront Parkway was bought by Greenleaf Partners in Atlanta for $17.8 million
9. The Soddy Daisy Healthcare Center, a nursing home on Sequoyah Road, was sold to investment group fro $16.4 million
10. The 193-unit Midtown Ridge Apartments, formerly the Royal Arms Apartments, in East Ridge was sold for $15.05 million.
Source: Hamilton County Register of Deeds