In the last month, I have seen the uncertainty in the market make some home buyers more nervous.  Don’t get me wrong, people are still buying homes in the Chattanooga area and home prices are still pretty stable.  1 year ago, a seller had the option to easily counter or dismiss an offer that they did not like.  Today, if you counter an offer on your home, it is more of a risk.  The buyer may be more likely to move on.  You may loose your home buyer.  Home buyers are concerned about over paying right now, so price your home right.  Some of those concerns end up being a buyer’s misunderstanding of the market.  Be sure you have an experienced Realtor representing you who can give you good guidance on home values.  I have run into several agents lately who did not understand the sub-market and therefore did not encourage their home buyers to make the kind of offer that would get them the best house for their clients.  Also, don’t consult a non-expert.  I have seen several home buyers consulting friends or family out of state who do not know the Chattanooga market and who do not understand real estate prices in Chattanooga.

Here are the facts about the market from the latest Greater Chattanooga Realtors home sales report. Newly listed homes for sale are down by 12.9%, so that means that there are less homes to buy and sell.  That fact impacts the number of Chattanooga pending homes sales, that are down by 6.3% and the current Chattanooga closed home sales that are down by 9.3%. Home buyers are looking for homes, but there are not many homes to buy in most of the sub-markets.  For example, Signal Mountain only has 16 homes for sale in March of 2023.  Lookout Mountain, TN only has 2 homes for sale.  Riverview only has 5 homes for sale.  Those are 3 smaller sub-markets, but it gives you an idea of how much we need more homes to sell.  Despite all of that, there are still twice as many homes on the market right now than 1 year ago.
The low inventory of homes is keeping home prices stable.  The median home sale price in Chattanooga TN even went up 3.3% in February.  

Another sign of nervousness in the home buying market can be seen in the average days on the market in Chattanooga going up to 39 days compared to 21 days 1 year ago.  Home buyers are a bit slower to pull the trigger, and they are more thoughtful right now.  As a home seller, do not expect your house to go on the market and sell tomorrow.  You still may see quick sales in some sub-markets but not in most.

In the end all, you need to marry the house and date the rate.  Find the house you love, put it under contract, and refinanced in a year when interest rates have stabilized.  The interest rate is not forever, but the home you want to live in lasts for years.

Call Nathan Walldorf to sell or buy a home in 2023. 423-544-7700

Pending home sales were up during the 1st 2 months of 2023.  As interest rates have come down from their high in November, people are buying homes again.  Home sales are still down from last year at this time, but there is rising home buyer activity.  “Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun. Yun also reports, "An annual gain in home sales will not occur until 2024. Meanwhile, home prices will be steady in most parts of the country with a minor change in the national median home price.”  Home prices are remaining steady, but home will not increase in value much this year.

Realtor, Nathan Walldorf, says he has seen increased buyer activity in Chattanooga, TN, in January and February compared to October through December of 2022.  "Homes in Chattanooga are being shown and sold right now.  We still need more inventory [more homes to sell], but I am making phone calls to find homes for my clients to purchase."

Source: National Association of Realtors

Are People Buying Houses Right Now?

The fall was very slow in real estate sales due to the Federal Reserve raising interest rates so abruptly.  Then in November inflation started to ease.  30 year mortgage rates dropped.  In one month's time interest rates went down by more than 1%.  Too bad it was Thanksgiving and then Christmas when rates dropped, which is when home buyer activity typically slows down, but it has lead to new home buyer interest in 2023.  The Mortgage Banker's Association just reported a 27.9% increase in mortgage applications in January 2023.  That means that buyers are hitting the market again.  FreddieMac.com is reporting that 30 year fixed rates are around 6.15% in late January.

First time home buyers are up from 28% of the market to 31% of the market in January per the Realtors Confidence Index of the National Association of Realtors (NAR). 57% of those polled said that homes sold within less than 1 month.  Homes listed are also reported to be receiving 2.2 offers per home.

All in all, residential real estate seems to be looking up for 2023.  All eyes are on the overall economy, but Chattanooga's local economy is very strong. Realtor.com has even placed Chattanooga as one of their top 10 real estate markets for 2023.

One thing is certain, when all other home buyers pull away from a market, that is usually a good time to buy.  You will have less competition and pricing should be better than 1 year ago after the pandemic mass migration.

“Therefore the Lord himself will give you a sign: The virgin will conceive and give birth to a son, and will call him Immanuel.”  Isaiah‬ ‭7‬:‭14‬ ‭NIV‬‬

I love it!  GOD WITH US.  How often do we forget that we are not alone?

How often do we forget that the creator of the universe is with us and is for us?

How often do we forget that his love is freely given by God and not earned?

Thank you God for coming after us in your relentless pursuit of us.  Thank you that you are ALWAYS with us.  Thank you that our whole lives are in your hands and that we can trust in your control in every situation. 

“When we complain about the things God put on our plate, we are rejecting his ultimate purpose for us…We are called to speak out of a thankful heart of submission to God in every circumstance and situation.” -Paul David Tripp

"They shall call his name Immanuel—God with us, God in our nature, God at peace with us, in covenant with us." -Matthew Henry

God is with us.  God is good.  God is love.  God is grace.  God is mercy.  Thanks be to God.

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

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.

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

Call Nathan Walldorf at 423-544-7700.

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