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. The current state of the Chattanooga housing market leans towards a buyer's market. The availability of homes, coupled with the moderate competition and the ability to secure properties at or slightly below the list price, provides advantages for potential homebuyers.
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.
Chattanooga Housing Market Trends
How is the Housing Market Doing Currently?
The current state of the Chattanooga housing market reflects a balanced landscape, with an average of 2 offers per home and a relatively swift selling period of around 51 days. According to Redfin, in the past month, the median sale price for homes in Chattanooga reached $310K, marking a notable 6.9% increase compared to the previous year. However, it's noteworthy that the median sale price per square foot has experienced a slight dip of 3.3% during the same period, settling at $177.
Furthermore, Chattanooga's median sale price is positioned at a commendable 23% lower than the national average. This indicates a potential advantage for homebuyers seeking affordable housing options in the area. Despite these statistics, it's crucial to emphasize that multiple offers are infrequent, and the market is not fiercely competitive, with homes typically selling in just over seven weeks.
How Competitive is the Chattanooga Housing Market?
Chattanooga emerges as a market with modest competition. Homes selling in 51 days on average signify a balanced equilibrium between supply and demand. The rarity of multiple offers underscores the market's lack of intensity, providing a more relaxed environment for both buyers and sellers.
Moreover, the average homes sell for approximately 1% below the list price, indicating a marginally favorable position for buyers. The fact that hot homes can sell for around list price and go pending in around 29 days introduces an element of variability, suggesting that certain properties may attract quicker attention and potentially competitive bids.
Are There Enough Homes for Sale to Meet Buyer Demand?
The housing inventory in Chattanooga appears to meet the current buyer demand effectively. With homes selling in a reasonable timeframe and multiple offers being a rarity, it suggests a well-balanced market where supply aligns with the needs of potential homeowners.
It's important to note that Chattanooga's migration and relocation trends play a role in shaping the housing inventory. In the period from November '23 to January '24, 29% of homebuyers were exploring options to move out of Chattanooga, while 71% sought to stay within the metropolitan area. Understanding these trends can provide insights into the local housing market dynamics.
What is the Future Market Outlook for Chattanooga?
The future market outlook for Chattanooga appears optimistic, considering the recent 6.9% year-over-year increase in median sale prices. While the market maintains a non-competitive stance currently, factors such as migration trends and economic developments can influence future dynamics.
It's crucial to monitor indicators like average days on market and median sale prices per square foot for continued insights into the evolving market conditions. Predicting the exact trajectory of the market is challenging, but staying informed about local and national economic factors can contribute to a more accurate forecast.
Chattanooga Housing Market Forecast for 2024 and 2025
According to Zillow, as of January 31, 2024, the average home value in Chattanooga stands at $287,863, exhibiting a noteworthy 5.3% increase over the past year, indicating a robust and flourishing market. These insights provide a valuable perspective on the current state of the Chattanooga housing market.
Key Housing Metrics:
1. Average Home Value: The current average home value is $287,863, a substantial 5.3% surge over the past year, underscoring the market's resilience and growth. Homes in Chattanooga are garnering increased value, a trend that bodes well for homeowners and investors alike.
2. Days to Pending: A significant indicator of market vitality, homes in Chattanooga are going to pending status in approximately 22 days, emphasizing the brisk pace of real estate transactions in the region.
Housing Metrics Breakdown:
- For Sale Inventory (January 31, 2024): A crucial factor in understanding market dynamics, the current inventory stands at 712, offering insights into the availability of homes for potential buyers.
- New Listings (January 31, 2024): With 196 new listings, the market continues to witness fresh opportunities for prospective homeowners.
- Median Sale to List Ratio (December 31, 2023): The ratio at 0.991 reveals the competitiveness of the market, showcasing a balance between listed and sold prices.
- Median Sale Price (December 31, 2023): Chattanooga's median sale price stands at $286,567, providing a benchmark for understanding property values.
- Median List Price (January 31, 2024): At $364,683, this figure serves as an indicator of sellers' expectations in the current market.
- Percent of Sales Over List Price (December 31, 2023): A noteworthy 18.6% signifies the prevalence of competitive bidding and demand surpassing list prices.
- Percent of Sales Under List Price (December 31, 2023): Reflecting a 55.0% proportion, this metric highlights instances where properties sell below the listed price.
Chattanooga MSA Housing Market Forecast:
Overview: Moving beyond current metrics, a broader perspective is unveiled through the Chattanooga Metropolitan Statistical Area (MSA) housing market forecast. This forecast, as of January 31, 2024, projects a 0.3% increase by February 29, 2024, a 1.6% rise by April 30, 2024, and a more substantial 6.1% surge by January 31, 2025.
Metropolitan Statistical Area (MSA): Chattanooga, TN, classified as an MSA in the state of Tennessee, encompasses various counties, functioning as an economic and social region with shared resources and infrastructure. With a housing market forecast indicating positive growth, the Chattanooga MSA emerges as a significant player in Tennessee's real estate arena. The forecasted increases underscore the region's attractiveness for potential homebuyers and investors alike.
Are Home Prices Dropping in Chattanooga?
Contrary to a decline in home prices, the Chattanooga housing market is witnessing an upward trajectory. The 5.3% increase in average home value over the past year, coupled with a median sale price of $286,567 as of December 31, 2023, underscores the sustained growth in property values. These metrics suggest a market where home prices are not only holding but experiencing positive appreciation.
Will the Chattanooga Housing Market Crash?
The data and forecasts for the Chattanooga housing market do not indicate an imminent crash. Rather, the market appears robust, with a forecasted increase of 6.1% by January 31, 2025. Factors such as a median sale to list ratio of 0.991 and a 55.0% proportion of sales under list price contribute to the overall stability, minimizing the likelihood of a sudden market downturn.
Is Now a Good Time to Buy a House in Chattanooga?
Considering the current market dynamics, now presents a nuanced scenario for potential homebuyers. While the market favors sellers, the forecasted growth of 6.1% by January 31, 2025, suggests that buying now may provide a solid investment opportunity. However, individual considerations such as personal finances, long-term goals, and market trends should be thoroughly evaluated. Engaging with real estate professionals and keeping a close eye on evolving market conditions will help individuals make informed decisions about whether now is indeed a good time to buy a house in Chattanooga.
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.