The Chattanooga housing market is the 169th largest housing market in the United States. The Chattanooga housing market is expected to remain strong in 2024. For prospective homebuyers and sellers, the burning question is whether Chattanooga tilts towards a buyer's or seller's market. The answer lies in the equilibrium between supply and demand.
With a median sale price notably 25% lower than the national average, Chattanooga offers an enticing landscape for buyers seeking affordability. However, sellers also benefit from a market where hot properties can command their worth swiftly.
Chattanooga Housing Market Trends in 2024
Chattanooga is the fourth largest city in Tennessee. It is located in southeastern Tennessee, close to Knoxville and just across the river from Georgia. Chattanooga proper is home to nearly 200,000 people. However, the Chattanooga housing market includes its suburbs, meaning the Chattanooga real estate market actually includes around half a million people.
Current Market Performance
The Chattanooga housing market, while not as cutthroat as some metropolitan areas, holds its own unique dynamics. According to Redfin, on average, homes in Chattanooga garner a modest two offers and grace the market for approximately 51 days. This relatively relaxed pace, coupled with a median sale price of $308K last month, reflects a 3.9% increase from the previous year. Notably, the median sale price per square foot stands at $185, marking a 5.7% uptick year-over-year.
Chattanooga Housing Market Competitiveness
Chattanooga's market, characterized by its moderate competitiveness, offers both advantages and challenges for buyers and sellers alike. While multiple offers are not the norm, homes typically sell for about 1% below list price, a testament to a balanced negotiation environment. Furthermore, the average time to go pending echoes the overall market pace, resting at 51 days. However, hot homes can swiftly command their value, selling at or near list price and entering pending status in as little as 29 days.
Chattanooga Supply and Demand Dynamics
One critical aspect of any housing market is its ability to meet buyer demand with available inventory. In Chattanooga, migration and relocation trends play a pivotal role. From December '23 to February '24, 29% of homebuyers explored opportunities beyond Chattanooga's borders, while 71% opted to stay within the metropolitan embrace.
Where are People Moving From?
Chattanooga's allure extends beyond state lines, with 0.32% of homebuyers seeking refuge from outside metros. Notably, Atlanta leads the charge, with homebuyers from this bustling metropolis eyeing Chattanooga as their next destination. Los Angeles and Chicago follow suit, adding to the diverse tapestry of incoming residents.
Future Market Outlook for Chattanooga
As we gaze into the horizon, the future market outlook for Chattanooga appears promising yet nuanced. While the city's housing market embraces growth with incremental price escalations, maintaining a delicate balance between supply and demand remains paramount. Factors such as economic stability, job growth, and infrastructure development will continue to shape Chattanooga's real estate trajectory.
Chattanooga Housing Market Forecast for 2024 and 2025
According to Zillow, the average home value in Chattanooga stands at $291,046, reflecting a 5.6% increase over the past year. Homes in this area typically go pending in approximately 23 days, showcasing the pace of the market. Further examining the inventory, there are 749 homes currently for sale as of February 29, 2024. Additionally, 238 new listings entered the market on the same date, indicating ongoing activity.
The median sale price as of January 31, 2024, stands at $286,000, while the median list price is notably higher at $366,933 as of February 29, 2024. This disparity suggests potential variation between listing prices and actual sale prices. Examining the market dynamics, the median sale to list ratio is 0.991, emphasizing the alignment between listing and sale prices.
Delving deeper into pricing trends, 19.8% of sales occurred over list price as of January 31, 2024, while 54.7% of sales were under list price during the same period. These figures shed light on the negotiation landscape within the Chattanooga housing market.
Chattanooga MSA Housing Market Forecast
Looking ahead, the Chattanooga Metropolitan Statistical Area (MSA) housing market forecast provides insight into future trends. The MSA, encompassing various counties within Tennessee, serves as a crucial economic and demographic indicator. As of February 29, 2024, the forecast predicts a 0.5% increase in home values by March 31, 2024, followed by a 1.3% rise by May 31, 2024, and a 2.6% surge by February 28, 2025.
This projection not only signifies potential appreciation in property values but also underscores the growth trajectory of the Chattanooga housing market. Given its size and diversity, the MSA encompasses a range of communities and neighborhoods, each contributing to its overall vibrancy. The forecast serves as a valuable tool for investors, homebuyers, and industry professionals alike, offering insight into potential opportunities and challenges within the Chattanooga housing market.
Are Home Prices Dropping in Chattanooga?
As of the latest data available, there is no indication of home prices dropping in Chattanooga. On the contrary, the median sale price has experienced a 5.6% increase over the past year, reflecting appreciation in property values. While market conditions can fluctuate, the current trend suggests stability and continued growth in home prices.
With low inventory levels and high demand, the current landscape leans towards being a seller's market. Limited housing supply can lead to multiple offers on properties, driving up prices and creating competition among buyers. However, buyers may still find opportunities, especially with the assistance of experienced real estate agents who can navigate the market effectively.
Will the Chattanooga Housing Market Crash?
Speculating on whether the Chattanooga housing market will experience a crash involves considering various economic and market indicators. While no market is immune to fluctuations, the factors contributing to Chattanooga's housing market, such as population growth, economic stability, and job opportunities, indicate resilience. Additionally, proactive measures by policymakers and stakeholders can help mitigate risks of a potential crash. However, it's essential for buyers and sellers alike to stay informed and monitor market conditions closely.
Is Now a Good Time to Buy a House in Chattanooga?
Assessing whether now is a good time to buy a house in Chattanooga depends on individual circumstances and goals. Despite the competitive market, low interest rates and potential appreciation in home values may present favorable conditions for buyers. However, it's crucial to conduct thorough research, assess affordability, and consider long-term factors such as job stability and personal finances. Consulting with a trusted real estate professional can provide valuable insights and guidance in making informed decisions.
Should You Invest in the Chattanooga Real Estate Market?
Population Growth and Trends
- Chattanooga, Tennessee, has been experiencing steady population growth and trends in recent years. The city's attractive features, such as its natural beauty and affordability, have drawn people to the area.
- Population growth often indicates increased demand for housing, which can benefit real estate investors by ensuring a consistent pool of potential tenants or buyers.
Economy and Jobs
- Chattanooga's economy has been diversifying, with growth in industries such as manufacturing, healthcare, and technology. The presence of major employers like Volkswagen and the city's accessibility to major markets have contributed to job growth.
- A thriving job market is a significant factor for real estate investors, as it correlates with increased housing demand, rental income, and property appreciation.
Livability and Other Factors
- Chattanooga offers a high quality of life with an attractive cost of living. The city is renowned for its outdoor recreational opportunities, cultural amenities, and welcoming community, making it an appealing place to live.
- Factors like livability and a strong sense of community can lead to a stable and growing real estate market, as residents are likely to stay long-term and invest in homeownership.
Rental Property Market Size and Growth
- The rental property market in Chattanooga is substantial and shows potential for growth. The city's population increase and job market expansion create consistent demand for rental properties.
- Rental properties provide real estate investors with the opportunity to generate passive income and potentially benefit from long-term property value appreciation, making Chattanooga an attractive location for rental investments.
Other Factors Related to Real Estate Investing
- Chattanooga's real estate market has shown stability even during economic downturns. This resilience is valuable for investors looking for a secure investment environment.
- The city's regulatory environment is conducive to real estate investors, with landlord-friendly laws and regulations that protect property owners.
- With various property types available, from single-family homes to multi-unit buildings and commercial properties, investors can diversify their portfolios in Chattanooga to align with their preferences and goals.
- Chattanooga's strategic location, with access to major transportation hubs, enhances its desirability as a place to live and work. This connectivity contributes to the city's real estate market's long-term growth potential.
References:
- https://www.zillow.com/Chattanooga-tn/home-values
- https://www.gcar.net/consumer-tools/market-statistics
- https://www.realtor.com/realestateandhomes-search/Chattanooga_TN/overview