By Nathan Walldorf, ABR, GREEN, GRI, SFR, e-Pro
President, Greater Chattanooga Association of Realtors
The housing market is being predictable, and that’s a good thing. At the beginning of the year, it was anticipated that the prevailing trends of the past year would continue into and through 2016, and that has largely been the case.
Just last week at the National Association of Realtors’ (NAR) Legislative Meetings & Trade Expo in Washington, D. C., NAR Chief Economist Lawrence Yun reported that homes sales should grow modestly this year. And he advised that a continuing inventory shortage will keep upward pressure on prices and make it hard for many people to buy, even though interest rates remain low.
Nationally and locally, the number of homes for sale has generally remained lower compared to a year ago. Also both across the country and here in Greater Chattanooga, prices have been steadily rising in desirable communities where homes show well. Here’s a look at the local market from sales reported through GCAR’s Multiple Listing Service.
New Listings in the Chattanooga region decreased 4.5 percent to 1,358. Pending Sales were up 15.9 percent to 992. Inventory levels shrank 19.9 percent to 3,604 units.
Prices were a somewhat soft. The Median Sales Price decreased 2.1 percent to $148,750. Days on Market was down 22.0 percent to 71 days. Sellers were encouraged as Months Supply of Inventory was down 27.0 percent to 4.6 months.
Inventory remains a concern for much of the country, and the shortage is impacting home prices. In his comments last week, Yun observed that “Inventory shortages continue to be a main driver of price increases, which were almost 7 percent nationally last year. The increase far outpaced wage gains, which were up only about 2 percent.” Yun is forecasting prices to rise another 4.5 percent this year.
There have been no striking changes to curtail what should be a decent run of home sales over the next several months. Mortgage rates have remained stubbornly and wonderfully low, the unemployment rate has remained at or near 5.0 percent for eight straight months and wages have increased for a great many people. New construction has been slow, and that may be a damper on sales, but the general outlook remains strong.