MidSouth home prices rise
The median sales price of homes sold in the second quarter continued to rise from a year ago: › Nashville - $248,500, up 9.5 percent › Birmingham, Ala. - $206,100, up 5.6 percent › Atlanta - $204,900, up 6.7 percent › Knoxville - $178,400, up 6.4 percent › Chattanooga - $178,300, up 6.5 percent › Huntsville, Ala. - $177,100, down 0.7 percent › Memphis - $171,500, up 6.7 percent › U.S. average - $255,600, up 6.2 percent Source: National Association of Realtors
Buying into the American dream of home ownership is getting more costly in Chattanooga.
The median price of a single-family home sold in the second quarter of this year in Chattanooga was up 6.5 percent from a year ago, outpacing the national gain in home prices and rising more than twice the typical increase in worker wages, according to a new report from the National Association of Realtors.
The median price for homes sold by Chattanooga Realtors this spring - or the midpoint of the prices paid for all home sales closed during April, May and June - was $178,300.
Chattanooga home prices still average 30 percent less than the U.S. median. But local home prices are still at a record high, according to data compiled through the multiple listing service by the Greater Chattanooga Association of Realtors.
"We still have strong demand but fairly limited inventory so that is putting upward pressure on prices," said Mark Hite, a Keller Williams Realtor who is president of the Chattanooga Realtors group. "It is a symptom of buyer confidence because nearly all of the economic factors are still good and interest rates have still remained low despite two years of talk about how they are going to go up."
New homes built off Dallas Road in North Chattanooga are in the Normal Park school zone and are pushing up median home prices in the market.Although home starts have increased this year in Chattanooga, the number of single-family home starts is still barely half what it was at the peak in 2005 and 2006 in Chattanooga.
Lawrence Yun, chief economist for the National Association of Realtors, said home prices in most American cities continued their fast ascent in the second quarter because supply remained at pitiful levels.
"The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season," he said. "Listings typically flew off the market in under a month - and even quicker in the affordable price range - in several parts of the country. With new supply not even coming close to keeping pace, price appreciation remained swift in most markets."
At the end of the second quarter, there were 1.96 million existing homes available for sale, which was 7.1 percent below the 2.11 million homes for sale at the end of the second quarter in 2016. The average supply during the second quarter was 4.2 months - down from 4.6 months in the second quarter of last year.
In Tennessee, the housing market "reflects the continuing strength of Tennessee's overall economy," said Brian Copeland, president of Tennessee Realtors.
"Even so, as prices keep rising and properties on the market are harder to come by in this seller's market, it is still possible for interested buyers to find the ideal home for them with the right help and guidance," he said.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.