2015 was a time of ups and downs in Chattanooga real estate. Median home prices rose from $141,000 in 2014 to $150,000 in 2015. Days on market dropped 47% from an average of 87 days to 46 which correlates to the 11% increase in the number of sales in 2015. The market seems to be in a true recovery overall in the United States, and in particular in Chattanooga. What, you may ask are the downs if prices and sales are up? Lack of listings for purchase. This trend seems to be continuing into 2016.
In the US, home sales are the marker for prosperity and a good overall economy. When people are able to purchase a home, it means that jobs are plentiful and there is growth. In 2015, over 260,000 jobs were created, which added to the increase in 2014, leaves us with a 5% unemployment rate in the country. To give some comparison, the rate of unemployment rate in the mid 1990's, when the country was deemed prosperous, was nearly 8%. Translation, we are on our way back to prosperity as a nation. Chattanooga fared the Great Recession fairly well and continues to enjoy steady growth.
What does that mean for 2016 home buyers and sellers? The Federal Reserve raised the interest rates at the new year for the first time in a decade. And while it was a minimal ( just a quarter of a point), it does mean more money to pay back on a loan (about $26 more per month on a $225,000 mortgage). For buyers, now is the time to buy your home and lock into a low mortgage rate. Sellers may be tempted to sit back and wait for their home value to increase, thus providing and atmosphere conducive to the 1990s and early 2000's bidding wars in some markets. However, this can backfire as well. Interest rates are predicted to go up a minimum of 2 times and up to 4 times in 2016. For sellers, this could mean fewer buyers able to afford their home. A home that spends more time on the market than the local average are perceived to be overpriced and therefore, can lose their perceived value.
We have seen a very busy kick off to the 2016 Chattanooga real estate market. Our team has over a dozen homes under contract since the end of December. We are seeing what could be an early start to the selling season, which normally starts the end of February. If you are considering selling your home in 2016, call us immediately. We offer a free home evaluation and a consultation with our in house design team to stage your home for a quick sale. If you are considering purchasing in 2016, the time to begin your search is also now. Visit our website and register to begin receiving a personalized weekly update of homes that fit your needs.
2016 promises to be an even bigger year than 2015 in Chattanooga real estate and you want a team that is ready to provide you with all the information. Chattanooga Property Shop is that team. Info@chattanoogapropertyshop.com 423-664-1900 x1002 Chattanoogapropertyshop.com