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Dec. 7, 2022

What will the Economy Be Like in 2023

Personally, I feel more optimistic about the economy in 2023 than I have been about the economy from the summer to the winter of 2022.  Several large institutions have recently come out and announced that there will be mild recession in 2023.  JP Morgan just made their opinion clear that they predict a mild recession.  Bank of America performed a survey of its top fund managers.  77% of them predicted a recession in 2023.  The fund managers believe that the US will escape the worst of the global recession, but there ill be a recession.  Morgan Stanley thinks that we will just miss a recession in 2023 but that the job market will take a downturn in 2023.  The fund manager, Black Rock, was less optimistic as they believe that the Federal Reserve will keep raising rates until they see clear economic damage from higher interest rates.

One bit of good news from November is that inflation went down in November from 8.2% to 7.7%.  That move in inflation made banks more confident in lending money.  Banks are lending money at lower interest rates now than 1 month ago.  The vice Chair of the Federal Reserve, when interviewed by Bloomberg, spoke of a slowdown in rate hikes in 2023.  The Federal Reserve has a goal of lowering inflation to 2%, so there will still be rises in interest rates in 2023.

 

Source: https://www.forbes.com/sites/siladityaray/2022/11/17/jpmorgan-forecasts-mild-recession-in-2023--heres-what-major-financial-institutions-predicted-this-week/?sh=59bcf17b8011

Posted in The Economy
Nov. 21, 2022

Home Buyers Return to the Real Estate Market with Lower Interets Rates

Chattanooga residential real estate had a wild fall season after the Federal Reserve more than doubled interest rates in a span of months 6 to 9 months.  Mortgage interest rates increased in 2022 at the fastest rate since the early 1980s.  In fact, mortgage rates have never doubled in 1 year's time.  That lead to home sales going down in Chattanooga real estate by 9.8% in August, down by 15.3% in September, and down by 21.6% in October.  THE GOOD NEWS is that the November inflation numbers were down to 7.7%.  The mortgage market reaction was a .5% drop in interest rates.  I anticipated that interest rates would drop as inflation drops, but I did not expect it to happen this quickly.  There was a spurt of Chattanooga home buying activity in early November, so it seems like those who have sat on the sideline are starting to creep back into the market.  Most likely, interest rates will continue to go down and home buyers will continue to re-enter the market in 2023.  In my experience, every time home buyers sit on the sideline there is a spurt of pent up demand that follows. 

As a Chattanooga home seller, know that Chattanooga homes will most likely sell better in 2023, but also know that you have to price your home according to the market.  This is not the time to try to break a record with your Chattanooga home sale price.  People who pass on your home due to the price being too high will most likely not come back to your home.  Your home gets the most attention when it is new on the market, so make sure the price the consumer sees is one that will get your home shown and therefore sold. 

Chattanooga home buyers need to know that home prices have not gone down much yet.  The Chattanooga median home sales price is still up, but you can still get more incentives now than 1 year ago.  Chattanooga home pricing has not gone down because the inventory of homes for sale is still lower than what a healthy market should have.

 

Call Chattanooga Realtor, Nathan Walldorf, to sell your Chattanooga home or to buy a Chattanooga home at 423-544-7700.

Posted in Market Updates
Oct. 31, 2022

What’s Ahead for Home Prices?

What’s Ahead for Home Prices?

As mortgage rates continue to rise, the housing market is beginning to cool off. Experts in the media are speculating that home prices could fall or continue to rise. But what’s likely to happen?

It’s anyone’s guess where the dollar will go from here. But here are some expert projections to help you decide what to do with your money.

What the Experts Are Saying About Home Prices Next Year

The most recent predictions from five industry experts in the field of housing are displayed in the graph below.

These experts have most recently revised their forecasts in light of recent market developments:

Source:ShowingTime, KeepingCurrentMatters

The three blue bars in the graph represent experts predicting continued home price appreciation, albeit at a slower rate than in recent years.

The red bars on the graph represent expert predictions of home price declines.

There isn't a clear consensus, but if you take the average (indicated in green) of all five of these predictions, the most likely result is that home price growth will be comparatively flat nationwide next year.

Experts are divided on whether home prices will appreciate or depreciate in 2023. It all depends on the conditions in your local market, like how overheated that market was in recent years, current inventory levels, buyer demand, and more.

Home prices are expected to return to more normal levels of appreciation rather quickly, according to the latest forecast from Wells Fargo. Although they feel that prices will fall in 2023, they think prices will recover and net positive in 2024. That forecast calls for 3.1% appreciation in 2024, which is a number much more in line with the long-term average of 4% annual appreciation.

Plus, according to the Home Price Expectation Survey (HPES) from Pulsenomics, a poll of one hundred industry experts, home prices are expected to increase by roughly 2.6 to 4 percent per year from 2024-2026. This means that even if prices dip next year, it's not expected to be a lasting trend.


As Jason Lewris, Co-Founder and Chief Data Officer for Parcl, says:

"In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt."

When it comes to buying or selling a home, don’t let fear or uncertainty change your plans. Learn more about your options by reaching out to a local real estate professional for the guidance you need each step of the way.

The housing market is shifting, and it can be tricky to navigate. Lean on a trusted real estate professional to help you make confident and informed decisions about what’s happening in your market.

 

Call Nathan Walldorf at 423-544-7700.

 

Posted in Market Updates
Oct. 25, 2022

The LATEST on Supply and Demand in Housing

This year, as home sales and buyer competition hit new heights, things are shifting as supply and demand reach an inflection point. The graph below helps tell the story of just how different things are today —

This year, buyer demand has eased as higher mortgage rates and mounting economic uncertainty have moderated the market. On the graph you can see how showings have softened by just over 12% compared to the same time last year.

Housing supply has finally begun to increase in the most recent quarter. That’s because the moderation of demand allowed housing inventory to increase in 2022.

If you’re thinking of buying a home, you might feel like you have more options and less competition than you would have had last year. However, with all those options to choose from, how can you be sure that the home you choose is the right one? That's why its important to have a real estate professional in your corner. They can help make sure you don't miss anything important, and can guide you through any challenges that may arise.

Keep in mind that there isn't a lot of inventory available if you're trying to sell your home.

This means that even with the increase in inventory and the moderating buyer demand this year, if you work with an agent to set the price of your home based on current market value, it will still sell.

The reason for this is that there are still buyers out there who want to move, and your home might be exactly what they're looking for.

The best resource for information on current supply and demand if you're considering buying or selling a home is a dependable Realtor.

They can explain what's going on in your neighborhood market and what that means for you.

Call Nathan Walldorf to buy or sell your home at 423-544-7700.

Source:ShowingTime, realtor.com, KeepingCurrentMatters

Posted in Market Updates
Sept. 19, 2022

August Chattanooga Home Sales Report

Chattanooga homes sales and Chattanooga pending home sales were down in August 2022.  Funny enough, the Chattanooga median sale price was still up 11% despite lower home sale sales.  Housing becoming more expensive due to rising interest rates and low inventory is why home prices are still rising.  Those rising interest rates are also slowing down the real estate market as some people are opting out of buying a home right now or can't afford to buy a home right now.  One bit of good news is that there are now 1,800 homes for sale instead of 600 homes, as there were in March of 2022, in the Chattanooga area.  That is still a long way from the 3,000 to 5,000 homes that we could use to have a balanced real estate market in Chattanooga.

The market is still slightly tilted towards Chattanooga home sellers.  Sellers do have to realize that their homes probably will not go under contract immediately like in the past two years.  Now it is taking a bit more time.  Chattanooga home sellers have more competition at the moment.  The people moving right now are the people who have to move instead of the people who want to move.  Chattanooga home sellers will have to give more concessions and really have to price their homes right. 

Chattanooga home buyers have more options and opportunities right now.  You have to look at the inventory in the price range and in the area where you want to buy.  Those two factors may make you have to make more aggressive offers or they may give you an opportunity to negotiate.  Overall, Chattanooga Realtors are seeing home buyers have more opportunities to ask for concessions and to negotiate on the price.

Call Chattanooga Realtor, Nathan Walldorf, to guide you through your home purchase or sale. 423-544-7700

 

You also may want to read Home Concessions Are Coming Back

 

Sept. 16, 2022

Home Sale Concessions Are Coming Back

After two crazy years of frantic Chattanooga home sales, home sale concessions are coming back.  In the past two years people were buying Chattanooga homes without asking for help with closing costs, without an inspection contingency, and even without a financing contingency.  Many home warranty companies either went out of business or sold to competitors, because sellers did not have to offer home warranties any more.  A low offer on a Chattanooga home was easy to say no to when several other offers were on the way or in hand.  In fact, small things, like asking the seller to pay for a buyer's title insurance, kept offers from being accepted.  It took an experienced Chattanooga Realtor to help you make your contract as "skinny" as possible in order to be awarded the contract.

Now Realtors are seeing people ask for and get concessions.  Chattanooga home buyers are asking for inspection periods and asking for repairs.  When there were several offers on a property, I do not recommend asking for too many repairs, but sellers are now granting repairs.  Chattanooga home sellers are accepting offers where people need the seller to pay for some of their closing costs out of their net proceeds.  FHA and VA loans attached to a purchase were typically rejected during the past two years due to the potential repairs that the appraiser could ask for.  A seller of mine accepted an offer with a VA loan and with the seller paying some of the buyer's closing costs over the weekend.  When selling a home today, you need a Chattanooga Realtor who has the experienced of selling homes during normal times.  You need a Chattanooga Realtor who will follow up with potential home buyers or their agents and see if there is common ground that you can find that leads to a purchase.  You also want a Realtor who is willing to collaborate with other Realtors to get your property sold instead of get in the way of a property being sold.

You still need to weigh how much inventory is available in the area where you are looking to see if you can ask for some concessions, but overall you have more opportunities to get concessions in today's market.

Call Nathan Walldorf to sell a home or buy a home. 423-544-7700

 

Also see 1st Time Home Buyers Have More Opportunities to Buy a Home

 

Aug. 31, 2022

3805 Rogers Rd, Chattanooga, TN For Rent

Charming English Tudor home in Brainerd. Semi-circle driveway and carport to create plenty of parking. Back patio area for grilling. Walk in the home to 9' ceilings and an attractive wood burning fireplace in the living room. 9' ceilings in the office by the living room (which could be used as a 5th bedroom). Spacious updated kitchen with new cabinets, modern countertops, and a new stainless steel oven. 15'X13' dining room wide open to the kitchen and living room.

2 main level bedrooms with vaulted ceilings share an updated full bathroom. Laundry and sitting area on the main level as well.

2 more spacious bedrooms upstairs share the 2nd updated full bathroom. Both upstairs bedrooms have walk-in closets. Hardwood floors throughout. Great lease price for such a large home. Call to make an appointment to see this home. The tenant pays for all utilities and lawn care. 1 year lease only. 1 month's rent due when you move in and 1 month's deposit due at the time of signing a lease.

 

Call Nathan Walldorf to see this property at 423-544-7700.

Aug. 29, 2022

1st Time Home Buyers Have More Opportunities to Buy a Home

Melissa Lutz from the National Association of Realtors (NAR) spoke to home builder and Realtors last week. 

One key thing she pointed out was that First time home buyers have more opportunities to buy a home right now compared to the past 6 months or even the past year.  In the past year, first time home buyers were competing with cash buyer or home buyers from out of state who could outbid them.  Home buyers with the types of loans that require the appraiser to require certain repairs were not being accepted.  Now home sellers have fewer people looking at their homes and 1st time buyer loans are being considered again.  In March of this year, there were only 600 homes on the market in the Chattanooga area.  At the end of August there are 1,766 homes for sale in the Chattanooga MLS.  There are far more homes to choose from right now than 6 months ago.  Closed home sales were down by 18% in July in Chattanooga, so the competition is not as fierce either.  Interest rates have now leveled off as home lenders are feeling more comfortable with the Fed getting inflation in check.  If you took a break from looking for a home, now is a good time to get back in the market.

Call Nathan Walldorf to find your home. 423-544-7700.

 

 

Posted in Buying a Home
Aug. 7, 2022

Home Mortgage Rates Went Down the 1st Week in August

Home mortgage rates lowered on Monday after the Federal Reserve announced that it would raise interest rates last week.  The Federal Reserve has been raising interest rates in order to get inflation under control as it was as high as 11.3% in June.  Mortgage broker, Chad Harris, told me that Fannie Mae and Freddie Mac feel as if the Fed's actions, raising interest rates, is working to curve inflation.  Some home interest rates (depending on the borrower's credit) were seen lowering from 5.3% to 4.9%.  According to the National Association of Realtors, home purchasing became 50% more expensive from last year to this year in large part due to rising interest rates.  That makes rates lowering by .4% good news for home buyers.  If you put your home purchase on hold because of rising interest rates, now may be the time to get back into the market.  There is also more inventory available in the Chattanooga real estate market.  

Sources tell me that the threat of a recession, the economy shrinking for 2 consecutive quarters, typically puts downward pressure on home mortgage rates and on commercial mortgage rates. 

Strangely enough, as interest rates have risen, home prices have continued to rise.  Home sales are starting to slow to a more normal pace now.  The days of 6+ offers on a property at one time have probably passed for a while, but do expect more than one offer on entry level properties in the Chattanooga area.

Looking to navigate the changing real estate market?

The Walldorfs have weathered many recessions and are used to change.  Call Nathan Walldorf to buy or sell your home. 423-544-7700

July 26, 2022

Chattanooga Real Estate Market Updates

The national median sales price of current homes has reached $400,000 for the first time - 15% higher than that a year ago based on the National Association of Realtors reports.

Even if existing home sales are declining nationwide, the housing supply has been slowly increasing, with inventories thatare drawing upwards for the second month. The rise of prices is anticipated to become moderate as supply increases. However, for the time being, supply is still scarce, and consumers are feeling the pinch of rising costs.

As housing inventory levels show a drastic improvement of 31.9% to 1,638 units, it is a very promising sign that the housing market will soon stabilize, and more homes will have more affordable prices.

The number of new listings in the Chattanooga area rose by 22.4% to 1,633. Pending home sales dropped to 1,089, a 5.1% decline. In our location, costs have been rising steadily to a median home sale price of $328,725.  That is a 19.5% growth. A year ago, the median sales price was $275,000.

As the days on market decreased by 23.5% to 13 days, the months' supply of inventories increased by 25% to 1.5 months. 

Buyers have more choices when buying a home right now, but prices are still high.  The good news for home buyers is that prices are leveling out.