Increase in Home Prices May Discourage Home-Buyers in Chattanooga

CHATTANOOGA, Tenn. (WDEF) – The American dream of home ownership is still very much alive—but unlike last 8 years, it may not be that easy to find–or buy, a new home in the Chattanooga area.

Home prices in Chattanooga jumped 2.8 percent in just the month of May. That may discourage some home-buyers, and its all because of a lack of properties out there on the market.

ERA Blue Key Properties Real Estate Broker Sheila Shipley says “What we’re seeing is a bullish market right now. In a certain price range what we have is low inventory. Anything under probably 250, its hard to get the jump on it. We’re having multiple offers ..actually going over the higher price.”

“….the number of units we’re selling compared to last year, are actually flat. But these are historic highs. So, we’re selling at the top that we’ve seen in the last 10 or 12 years.” said Mark Hite, Pres., The Greater Chattanooga Assoc. Of Realtors

Part of the problem local home-buyers face is a lagging construction schedule. Houses are not being built fast enough.

Shipley said, “And what we’re hoping to see that uh, new construction right now is very high but, the way we understand it is that we’re behind in inventory for about 2 years in inventory, so its going to take a while for us to catch up and hopefully the new construction will kick in and help level off the playing field.”

But fewer homes means higher prices.

Mark Hite says that this year, prices have increased right about 10 percent over last year. And looking at the trailing 8 months, about 8 percent.

Shipley believes, “The prices seem to be going up on the homes, too..because people are seeing that the low inventory ..supply and demand..you know how that is.”

“We’ve seen prices increase, because buyers still feel good”..(bump) “..about jobs, interest rates are still at historic lows .” concluded Mark Hite.