Local home prices rise 7.2 percent in 2017


              FILE - In this Thursday, Dec. 3, 2015, file photo, a home under construction and for sale is shown in Roswell, Ga. U.S. home prices climbed steadily in July 2017 even as sales have slowed, evidence that a limited supply of available houses is distorting the real estate market. (AP Photo/John Bazemore, File)
FILE - In this Thursday, Dec. 3, 2015, file photo, a home under construction and for sale is shown in Roswell, Ga. U.S. home prices climbed steadily in July 2017 even as sales have slowed, evidence that a limited supply of available houses is distorting the real estate market. (AP Photo/John Bazemore, File)

Rising home prices

The median price of homes sold in 2017 rose in most Mid-South markets more than the national average, although housing prices in the South remained below the U.S. median.* Nashville, $241,700, up 8.3 percent* Atlanta, $198,500, up 8.7 percent* Birmingham, Ala., $197,00, up 5.3 percent* Huntsville, Ala., $189,800, up 3.4 percent* Chattanooga, $176,100, up 7.2 percent* Knoxville, $175,900, up 6.3 percent* Memphis, $166,900, up 6.5 percent* U.S. average, $248,800, up 5.3 percentSource: National Association of Realtors

Chattanooga home prices continued to rise faster than incomes last year and increased again in 2017 at a faster pace than the U.S. as a whole, according to the National Association of Realtors.

The median price of single-family houses sold by local Realtors rose by $11,500 during 2017 to a record high of $176,100.

But the typical home sold by a Chattanooga Realtor last year was still valued at nearly 30 percent less than the U.S. average price of $248,800 and was also cheaper than the median price in the nearby metro markets of Atlanta, Nashville, Birmingham, and Huntsville, Ala.

In its year-end report for last year released last week, NAR's chief economist, Lawrence Yun, said home prices continue to be pushed up by the shrinking inventory of available homes as sales continue to increase more than the number of new and existing homes coming on to the market.

"These consistent, multi-year price gains have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation," Yun said. "However, the shortage of new homes being built over the past decade is really burdening local markets and making home buying less affordable."

Since 2011, U.S. home prices have risen an average of 48 percent, or more than triple the 15 percent gain in average incomes over the past six years.

Realtor-assisted home sales last year were up 1.1 percent in the Chattanooga region and rose 4.3 percent nationwide. But the inventory of homes on the market has dropped both locally and across the country.

Metro Nashville, which had the highest median price and increase over the past year among Mid-South metropolitan cities, ranked as the third fastest growing major metro area for home price appreciation in 2017. according to a separate report prepared by ATTOM Data Solutions.

Among metro cities with more than 1 million residents, Nashville ranked behind only Kansas City and San Jose, Calif. for the gains in home prices last year.

"One of the reasons for this skyrocketing home price appreciation in Nashville is 'migration' from other high-cost markets," said Daren Blomquist, senior vice president at ATTOM. "People are moving because the jobs are moving, and they're better-paying jobs. They still see it as a bargain. Their context for what makes a good deal on a home is different, and they're often willing to pay more than a local buyer."

The five most expensive housing markets in the fourth quarter were the San Jose, California metro area, where the median existing single-family price was $1,270,000; San Francisco-Oakland-Hayward, California, $920,000; Anaheim-Santa Ana-Irvine, California, $785,000; urban Honolulu, $760,600; and San Diego-Carlsbad, $610,000.

In Atlanta, prices hit bottom at $100,000 in 2012 in the wake of the Great Recession. Over the next four years, however, home prices in the Atlanta region rose at frenzied annual pace of 20 percent per year. Last year, the growth pace was more moderate, according data from both ATTOM and the National Association of Realtors.

"What I like about it is that the market is actually behaving rationally, not continuing to inflate," Blomquist said about the Atlanta market. "One of the reasons for that is markets like Atlanta are transitioning from investor driven to owner-occupant driven markets, which is bringing them back to earth. They're constrained more by affordability than they were before."

Upcoming Events