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How to Buy a Home from Start to Finish Part 1

Step 1 is to find yourself an Accredited Buyer’s Representative.  Someone who has the ABR Designation.  You want a Realtor who has taken extra education to represent you well when you buy a home.

Step 2 is to Get pre-approved for a loan with a lender.  Have your Realtor give you a list of his recommended lenders, so you can be sure that you use a lender who will make the process easy.  If you are moving in from another state or another town that is not close to Chattanooga, that lender is probably not the best lender for you with their lack of local appraiser contacts in the area.  You lender can tell you the best loan options for your situation with various types of down-payment terms (you don’t always have to have 20% down to buy a home).

Step 3 is to pick the are of town where you want to live.  You want an area that meets your budget, that is safe, and that has decent schools (if you will need good schools now or in the future).  Your Realtor can help you know what areas of town would meet you price range and your specific needs.

Step 4 is having your Realtor start sending you homes in the areas where you want to live.  When you are receiving homes directly from the MLS, you are receiving homes in minutes from when they were put on the market, whereas Zillow or one of those 3rd party sites will typically have some lag time between when it is listed and when it is sent to you.  That can lead to the loss of that potential home.

Call Nathan Walldorf to buy a home in the Chattanooga area. 423-544-7700

See part 2 at the following link: https://www.walldorfhomes.com/blog/how-buy-home-start-finish-part-2/

The latest inflation numbers from March are down to 5%. Inflation going down leads to mortgage interest rates going down.  Freddie Mac has mortgage interest rates down to 6.27%.  The Federal Reserve staff have reported that the country will mostly likely experience a mild recession by the end of the year.  That would also push mortgage interest rates down.  Lawrence Yun, the chief economist for the National Association of Realtors reports on interest rates, "Mortgage rates slipping down to under 6% looks very likely towards the year's end."

Closed home sales in Chattanooga were down by 6.5% in March.  At the same time, Chattanooga home prices went up by 5%.  The days that homes are on the market in Chattanooga are up from 19 days a year ago to 36 days in March, so home buyers are buying a bit slower.  Some of the inventory numbers are up, but the inventory of homes for sale in most areas is still tight.   

Home buyers, you have a bit more to choose form in some areas of Chattanooga as a home buyer right now, but pricing is not going down.  Your interest rate is going down, which will make your monthly payment less. 

Home sellers, prices are still good and you should still be able to sell your home quickly.

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

The Federal Reserve hopes to beat up the economy enough to make inflation come down.  Their goal is to shed jobs and then force the price of goods down.

The ISS Manufacturing Index has been down the past 5 months, the lowest figure in more than a decade.

The JOLTS report for March had job openings drop to 9.93 million, the lowest since May of 2021.

The Bureau of Labor Statistics is revising their 5 year data to show higher ongoing and new unemployment claims.

Inflation went down by .1%  in February and is down 2% from June 2022 until now. 

The ADP payroll report had the private sector added 30% less jobs than expected.  In all, the Fed's work has hit people's and business's spending power driving down new hires and production of goods. 

All of this lead mortgage interest rates to go down by nearly .5% on Friday.  More jobs numbers coming out this week could drive mortgage interest rates even lower.

The demand for homes is increasing again, but the supply of homes available is not keeping up with the demand.

Call Nathan Walldorf to get the real story on your Chattanooga home's value and/or on purchasing a Chattanooga home. 423-544-7700.

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