Chattanooga Real Estate Market: An Insider's Look
Chattanooga's Real Estate Market is still growing! The city has been ranked as one of the best places to live in recent years, and as a result, more and more people are moving to the area. The housing market is still very strong and there are many great options for buyers and sellers.
If you're thinking of buying or selling a home in Chattanooga TN, it's important to have an understanding of the current real estate market. Here at the Chattanooga Roots Property Team, we are professional real estate agents and life-long residents with years of experience in the greater Chattanooga area. In this article, we'll give you an insider's look at Chattanooga TN and its real estate market - the good, the bad, and everything in between.
Lets start with a general look at Chattanooga TN
Chattanooga TN 's population has been growing rapidly in recent years. In 2019, the city was ranked as the fourth fastest-growing city in the United States by Livability.com. This growth is due to a variety of factors, including the city's low cost of living, diverse economy, and high quality of life.
Chattanooga TN 's low cost of living is one of the main reasons why the city has been growing so rapidly. According to a study by Forbes, Chattanooga is the third most affordable city in the United States. The cost of living in Chattanooga TN is 9% below the national average and 12% below the average for large cities. This makes Chattanooga TN an attractive option for people who are looking to move to a more affordable city.
The city's diverse economy is another factor that has contributed to its recent growth. Chattanooga TN 's economic base is composed of a variety of industries, including manufacturing, healthcare, education, and tourism. Multiple tech start ups were drawn to Chattanooga because of the blazing hot internet speeds. 1 gig download for $67 is possible because of the extensive fiber optic infrastructure put in place to prepare the scenic city for the future. The cutting edge tech and the diversity of industry provides stability and resiliency during economic downturns.
Lastly , Chattanooga TN 's high quality of life is another reason why the city has been growing so rapidly. The city has been ranked as one of the best places to live in the United States by a variety of publications, including Livability.com, U.S. News & World Report, and Niche.com. These rankings are based on factors such as the city's cost of living, job market, tons of outdoors activities, growing culinary scene and overall quality of life.
What's happening in Chattanooga?
Chattanooga TN hosts such awesome events as:
Here are just a few of the outdoor activities Chattanooga is known for:
Chattanooga TN schools
We have several top rated magnet schools with one of TN top public schools located in the beautiful North Chattanooga neighborhood.
There are a large number of world renowned private schools like the Baylor and McCallie Schools.
Chattanooga TN the 2 hour to anywhere town!
Chattanooga TN is conveniently located within a two-hour drive of several major cities, including Atlanta, Knoxville, Nashville, and just 4 hours to Asheville NC. This makes Chattanooga TN an ideal location for people who want to live in a mid-size city but still have easy access to all the amenities of a larger city.
What does the Chattanooga TN Real Estate Market look like though April 2022.
Are we still in a sellers market in TN, Chattanooga?
This is the question we receive daily. It is being discussed everywhere from the water cooler to the local news. The chart below is based on our personal professional opinions and experience and will hopefully work as short hand in understanding what constitutes a buyers market, a sellers market, a balanced market and our current market.
The Chattanooga TN real estate market is still FIRMLY in a sellers market but things are shifting.
Less than 60 days ago we had 650 single family homes on the market. As you can see from the chart above we've seen a nearly 33% increase in homes actively listed. There's always a summer jump but this is more than just a seasonal bump.
While that is an unusually high rate of increase it is important to remember, as the chart above highlights, a balanced market would have approximately 2500 single family homes listed. We have a long way to go before we achieve balance and interest rates are going to be a factor in the rate at which the market shifts.
With interest rates in the low to mid 5% range, an economic slow down occurring and inflation running amuck, there is virtually NO ONE predicting a decline in interest rates in the near to midterm which is weighing on the housing market.
That being said, we are still seeing very high demand for homes in Chattanooga with very little change to what sellers can expect. It looks like the housing market nationally will slow with the rate of equity gains definitely decreasing this year over last.
The big caveat for those in TN, Texas, and Florida is the mass influx of new residents which is the X factor for us locally. As long as migration continues at the rate it has been and interest rates stay below 6% we should be able to expect our home values, while moderating a bit, to still be very respectable.
Is the media analyzing the housing market correctly?
(The information below was provided by LOAN DEPOT a nationwide lending leader.)
There has been some media speculation recently that house formations have fallen and that we may be in an overabundance of inventory. Let's look at some figures to figure out what's really going on.
On an annualized basis, there were 1.4 million households formed in March (a historically strong figure), which is above average. At the same time, last week's Housing Starts report for April showed 1.7 million total starts (both single-family and multi-family). However, remember that about 100,000 homes are destroyed each year because of deterioration.
This means that on net, we are seeing around 1.6 million homes created. Subtracting out the 1.4 million household formations, that is approximately 200,000 units that are going towards the national housing shortage we are seeing.
To sum up: If Freddie Mac is correct in its assessment that we are short by 3.8 million houses to meet demand, it will take more than 19 years to achieve equilibrium — nowhere near overbought territory.
Even if we cut their projection and are just undersupplied by a million homes, it will take five years to reach equilibrium at the current rate. Despite the media's best efforts to create panic, the statistics do not back up signs of overbuilding or an oversupply."
So....Should you buy/list now or wait?
Are you worried that lower rates are right around the corner and you should wait for them to drop? Unfortunately it looks like 5%+ interest rates are the new normal for the foreseeable future. I don't hear anyone saying interest rates will return to below 5%. If you wait to buy/sell in the future you are likely to get the same rate OR higher. The silver lining is, if the rates do go down after you buy, you could refinance and take advantage of those lower rates. The one thing I am virtually certain of is our local housing costs will be higher in 5 years than they are today, making now the time to buy and sell.
Chattanooga's real estate market is booming, but there are potential headwinds on the horizon. Despite this, it remains an excellent time to buy or sell a home in Chattanooga. The market is currently favoring sellers, but this could shift towards the buyer in the coming months and years as interest rates rise and more homes come onto the market. For now, buyers and sellers alike can take advantage of the strong market conditions. Contact the Chattanooga Roots Property Team at Keller Williams Greater Downtown Realty to get started.
How long do you think the sellers market will last in Chattanooga Tn? Comment below!
Licensed Agent: TN & GA
Recent Blog Posts: