Choosing the right real estate market to invest in can be a problem for some people, as each city and state has different conditions that may make them more (or less) appealing to most people.
Overall, Chattanooga is considered a fairly competitive market, meaning homes often get multiple offers. TN, Chattanooga home prices have increased considerably over the past few months, so is this area a good investment choice for you?
Today, you'll learn more about the real estate market in Chattanooga, which will help you determine if it's a market for buyers or sellers.
Interesting Trends in the Chattanooga Housing Market
Let's look at recent trends in Chattanooga's market, as this could help potential buyers understand if the current conditions are optimal for them.
Median Home Price
The current price for homes sold in Chattanooga is $320K, which is a 1.6% increase compared to last year.
Median Home Price Per Square Foot
On the other hand, the median price per square foot in Chattanooga is $184; a 0.54% decrease from last year.
Other Important Information
- According to Redfin, approximately 1.2% of homes were sold under their listing price.
- Some properties in Chattanooga can sell for at least 2% above their listing price.
- There were about 269 homes sold in the previous month.
- On average, homes in Chattanooga, TN, sell after 43 days, and each home receives approximately two offers.
- There's currently enough supply of homes to meet the demand, allowing more people to find better deals.
Factors Affecting Today's Market
All real estate markets in the country get affected by a few factors. While each state and city may get affected differently, these are still factors you should consider.
Common factors influencing the market in Tennessee include:
It's no secret that mortgage rates in the U.S. have been at a record high for quite some time now. These high rates are known to price buyers out of the market, which affects the average rate of home sales in different areas, so you should keep that in mind before making your investment.
Any government decision or policy can significantly affect a real estate market, including Chattanooga's. Some common interventions include taxation, deductions, subsidiaries, and more.
The health of Chattanooga's economy can often affect different factors within its housing market, including home values, inventory, and more.
Common economic indicators you can use for your research include:
- Unemployment rate
- Manufacturing activities
- and more
Overall, demographic indicators can help you discover which real estate properties are in the highest demand, making it easier to find a more appropriate investment option.
Will the Chattanooga Real Estate Market Crash?
Chattanooga's real estate market isn't likely to crash soon. Even though there may not be as many people selling due to the rise in mortgage rates, there's still decent inventory compared to other cities.
Statistics About Chattanooga's Housing Market
- Approximately 70% of homebuyers looked to stay in Chattanooga's metropolitan area, whereas the other 30% wanted to move out.
- About 42% of homes in Chattanooga are at risk of flooding.
- The sale-to-list ratio in Chattanooga is 97.37%, which suggests a fairly balanced market.
- East Lake is considered the most affordable neighborhood in Chattanooga, with an average home price of $125K. On the other hand, Northside, with a median listing price of $577K, is considered the most expensive one.
- There are currently over 1,000 homes for sale in Chattanooga.
- The unemployment rate in Chattanooga, as of March 2023, is 3.30%. This is lower than last year's number, which was 3.60%. On the other hand, the national unemployment rate is 3.4%.
Considering all the information we just reviewed, we can expect the market in Chattanooga to keep growing over the following months. However, the current supply-demand ratio suggests that Chattanooga (and Tennessee, in general) could stay a seller's market until mortgage rates start to go down.
Overall, first-time buyers could have trouble finding a suitable property, especially if they're looking for affordability, as sellers may have the upper hand when negotiating.
The fact that the average home in this area sells after 43 days suggests that the market is still moving considerably fast compared to other cities.
However, you shouldn't rule out Chattanooga based on its current state. The city has plenty of options for both buyers and sellers, and even though sellers may have more advantages here, you could still find a suitable deal.
Moreover, market conditions could change throughout the year, so you should keep an eye out to find the best opportunity to meet your goals.
2023 is aiming to be a good year for those looking to invest in the Chattanooga real estate market. Even though factors like mortgage rates are affecting the general market, there are still many opportunities available for both buyers and sellers.
Chattanooga is considered an excellent place to invest in, thanks to its fairly affordable housing, diverse employment base, and more. If you're looking to earn money and build your wealth through the real estate market in Chattanooga, today could be an excellent opportunity to do it, as long as you make the right investment decisions.
Sometimes, hiring a great agent and mortgage lender can help people make smarter investment decisions depending on their case. Still, understanding the current market conditions will already give you the upper hand when it comes to evaluating your investment's benefits.
Is Chattanooga a Good Real Estate Market?
It depends on what your goals are. Generally speaking, investing in Chattanooga could be beneficial, as there are excellent cash-flowing homes, and the real estate appreciation is above the national average.
Are Real Estate Prices Dropping in Tennessee?
Currently, prices aren't dropping. Even though median home prices have declined since 2022, the past few months in 2023 have shown steady growth.
Is Chattanooga a Buyer's or Seller's Market?
Considering the current conditions, it can be tricky to determine whether it's a buyer's or seller's market. You could say it's a seller's market, as the demand is higher than the current supply of homes. However, we believe there's a good balance in the market, so there could be many opportunities for both buyers and sellers.