By Vicki Trapp, AHWD, ASP, CRS, GRI, SRES, SRS, President
Greater Chattanooga Association of Realtors
Looking back, 2014 largely has been another recovery year. Mortgage credit and student debt remain obstacles even as the U.S. leads the global economy toward recovery. As this recovery matures, many metrics are approaching a healthy balancing point. Throughout the year, rates have remained much lower than most forecasters expected, and inventory levels finally started rising in most areas as sellers generally listed more properties as a result of stronger prices.
As we examine the local market and November numbers, we are not surprised to see some slowness, with consumers being focused on the holidays, parties and time with family. This month, New Listings in the Chattanooga region decreased 4.1 percent to 702, which seems low but not dramatically from this time last year.
Pending Sales were down 46.7 percent to 278, which is a significant decrease from more than 500 Pending Sales year-to-date. Yet, the twelve-month average of Pending Sales in Greater Chattanooga is down only 2.5 percent in comparison to the prior year’s average.
We saw Inventory levels shrink 5.5 percent to 4,914 units. Despite this decline, our twelve-month average is up 4.3 percent to 5,435.
Prices continued to gain traction in Greater Chattanooga. The Median Sales Price increased another 12.5 percent in November to $149,900, which is back to where we were in April of this year. Improved prices are positive trend for the local market.
As expected based on the increase in Median Sales Price, Average Sales Price also rose – 5.2 percent to $180,338, which is again back to prices we saw this past Spring. While the market activity tends to slow this time of year, ending the year with Spring-like numbers indicates we are poised for a stronger start in 2015.
Days on Market was up 4.7 percent to 133 days. Sellers were encouraged as Months Supply of Inventory was down 2.3 percent to 8.4 months.
As we close 2014 and enter into the new year, job growth should continue and wage growth is expected to pick up. Both of these factors should have a positive impact on the housing market.
Some industry experts are contemplating a potential change in interest rates during 2015. With virtually no inflation, rates will likely remain low for most of 2015 but could flirt with 5.0 percent toward the end of next year. Construction permits and housing starts have upward momentum, which is news in some areas but familiar in others. Prices should continue their ascent but at a tempered pace compared to recent years, which helps preserve affordability for first-time buyers.