By Mark Blazek, President
Greater Chattanooga Association of REALTORS®
All together now . . . let’s breathe a collective sigh of relief that the government shutdown did not prolong any further. Had it done so as we speculated last week, closing dates would have been delayed possibly into 2014, and loan applications might have appeared stuck in the mud. Had the shutdown lasted much longer, it would have impacted the real estate industry’s momentum we have experienced so far this year.
Fortunately, our monthly market report shows the momentum continues. Buyers are buying, sellers are selling, lenders are lending and builders are building. Sure, this varies from region to region and even city to city within a region or state, but by and large, things are returning to normal. All major indices showcase fairly robust price recovery. Consumer confidence isn't what it could be, but it's sufficient for now.
New Listings in the Greater Chattanooga region were up 7.2 percent to 940. Listings are still a year-over-year improvement, but overall activity is beginning to moderate as the seasons change.
Closed sales are up 19 percent over September of last year and currently up 9.9 percent for the year. Days on Market decreased 2.5 percent to 119 days.
Inventory shrank 1.6 percent to 5,173 units. Months Supply of Inventory was down 6.3 percent to 9.0 months. This has been the trend for the year, with no significant changes or indications of a turn-around for inventory.
Prices were still a bit soft as the Average Sales Price was down 2.8 percent to $162,638. Related to price is the Affordability Index, which measures whether a typical family earns enough income to qualify for a mortgage on a typical home. In the Greater Chattanooga, this index is down 5.4 percent, which enables more buyers to enter the market.
With the possibility of further rate and price increases, some buyers are still motivated, but urgency tends to wane when holiday decorations start going up. However, there's some evidence that it's not just first-time home buyers fueling the recovery. Move-up buyers are also pulling their weight. Some baby-boomers are ready to look for less space, nudging Junior out of the basement. The pizza boxes and late-night video games get old, plus there's a fresh crop of buyers looking for a bigger space to raise their own little darlings.
Recovery continues, but the pace is stabilizing. Yet that's a good thing, since harmful corrections usually follow when the market moves too far too fast.
Do you hear that? Hummmmm. That's the delightful sound of normalcy. Sounds good, doesn’t it?