Despite another drop in home sale prices in most of America, median house prices in the Chattanooga area rose 3.9 percent in the first quarter compared with the year-ago level, according to a report released Tuesday by the National Association of Realtors.
With nearly one of every three homes sold during the first three months of the year in foreclosure, however, Chattanooga home prices were still priced 26 percent below the U.S. average.
“There’s no doubt that foreclosures and distressed sales are keeping home prices down, but Chattanooga doesn’t have near the oversupply of unsold properties as many other markets in the Southeast,” said Henry Glascock, a real estate appraiser and auctioneer in Chattanooga.
Among existing houses sold by Realtors from January through March, the median price in Chattanooga was above some bigger markets that have been hard hit in the Southeast, including Atlanta, Memphis and Orlando.
“Chattanooga hasn’t had the big swings up and down that we saw in a lot of other once-hot markets that are now experiencing big dips in prices,” said Jennifer Grayson, president of the Chattanooga Area Association of Realtors. “We’re probably down, on average, about 20 percent in our prices from the peak. But I think we’re starting to come back.”
According to Local Market Monitor, a North Carolina-based research company that tracks employment and housing trends in major metro areas, Chattanooga housing prices are projected to rise an average of 1 percent this year, 3 percent next year and another 2 percent in 2012.
“Nationwide, we expect prices to remain pretty flat or decline slightly this year, but it looks like Chattanooga should do better than average,” said Carolyn Beggs, chief operating officer of Local Market Monitor. “It’s considered a market that is good for conservative investment, meaning that the risk is low that there will be an additional decline in market prices.”
Above average employment and population growth, combined with a manageable inventory of unsold houses, should help Chattanooga outperform the nation, Beggs said.