The beginning of the year marks a new opportunity for many hopeful buyers to make their home purchase dreams a reality. While those efforts won’t be without challenges, Realtors continue to advocate for access to affordable housing, despite the shrinking inventory.
According to the National Association of REALTORS® (NAR), 2022 began with an existing home inventory of 910,000, the lowest level recorded since 1999. Thus, competition in the real estate market remains fierce. In addition, the affordability rate continues to decline as inflation, soaring sales prices, and rising mortgage interest rates reduce purchasing power. The sudden increase in rates and home prices means buyers are paying significantly more per month compared to this time last year, which may cause sales to slow as more buyers become priced out of the market.
With 2022 beginning where 2021 left off, existing home sales reached their highest level nationally since 2006. NAR reported that sales were up 8.5% compared to the previous year as homebuyers rushed to take advantage of historically low mortgage rates. Yet, many buyers were forced to temporarily put their purchase plans on hold due to higher sales prices and a shortage of supply. A desire for more consumers, especially first-time buyers, to have the means for entering the market is why Realtors keep working with elected officials to increase inventory and stabilize prices.
Locally, new listings in the Chattanooga area decreased 2.5% to 874 in January. The result naturally affected the pending sales which were also down 1.9% to 961. There was a significant decrease in Active Inventory levels as they shrank 35.2% to 775 units from last year at this same time. As a comparison, in January 2021, there were 1,196 available properties. List prices and closed sales prices in January continued to gain traction in our local market.
The Median Sales Price in Chattanooga has increased 23.4% to $290,000 over the past 12 months. In January 2021, the Median Sales Price was $235,000. While days on Market is continuing to show a decrease of 43.2% to 21 days, compared to 37 days in January 2021. This caused the absorption rate (Supply of Inventory) to tick down 41.7% to only 0.7 months from just a year ago.
To address market, inventory and legislative concerns, Greater Chattanooga REALTORS® traveled to Nashville in early February to meet with our elected officials. The purpose of our conversations was to advocate for homeownership, property rights, and access to affordable housing. I will try to share more on those meetings in the coming weeks and feel like our visit was productive for the membership as well as for our voice as Realtors in Nashville. In the meantime, I assure you that while the cold weather has not translated to a cooling of the housing market, Realtors are very much aware of these challenges and are working to address these issues. Spring is just around the corner and likes its names sake we hope to see a bounce of increased homes coming onto the market in the coming months.
With limited inventory and properties selling so quickly, it is crucial to work with a Realtor® who knows the ins and outs of this market. Realtors help their clients work fast to get the home they desire or to list a home and navigate the increasing number of offers a seller may expect with such high demand from so many buyers being in our market. That’s Who We R®.