Chattanooga is one of the fastest-growing metro areas in Tennessee, but it still feels very much like a small town. Nestled at the base of Lookout Mountain along the Tennessee River, the Scenic City is the ideal home for outdoor lovers and urbanites alike, because of its growing job market and the quality of life amenities available here. Living in downtown Chatt can be very exciting, being close to so many attractions and entertainment spots, such as the Tennessee Aquarium, the IMAX theater, and AT&T Field, not to mention the Riverfront, which is laden with numerous restaurants, bars, shops, and hotels. Moreover, Chattanooga is said to have the fastest internet in the whole of the United States – something most homebuyers are considering now that we live in a highly digital era.
Best Housing Market for Millennial Homebuyers
Its affordability and strategic location, sitting along the Tennessee-Georgia border, has turned Chattanooga into a hotbed for home flipping. Investors come here to purchase single-family homes, fix them up, and list them. Craftsman-style homes are usually bought between $130,000 and $170,000, then flipped for more than $200,000 to eager buyers, mostly millennials who are attracted to the city’s thriving economy and convenient access to hiking, rock climbing, and mountain biking at Signal Mountain.
Chattanooga, TN is one of the few cities throughout the country that are getting a record number of mortgage applications from millennials, who make up an estimated 49% of these mortgages. Some of these cities are Lakeland, Florida; Grand Rapids, Michigan; and El Paso, Texas. These locations have a few things in common, which all appeal to the younger homebuyers:
- Bustling Economies
- Affordable Housing
- High Quality of Life
Millennials are on the verge of becoming the biggest generation in this country. They also comprise the majority of our labor force, according to Pew Research Center. Millennials are those who were born from 1981 through 1996, so many of them are in their mid-to-late 30s and are in the process of looking to buy a home. According to a research conducted by the Urban Land Institute, a real estate and land use think tank, around 70% of millennials plan to live in single family homes by 2020.
Real Estate Market Situation in Chattanooga, TN in 2018
In 2018, home inventory in Chattanooga, TN remained low. By year end, there were only 2,615 homes for sale, significantly lower compared to 2014, when there were 4,723 homes in active listings. Compared to the previous year, there were 124 less homes for sale in 2018.
With regards to the absorption rate, the value at the end of 2018 is almost the same as in December 2017, at 3.1 and 3.3, respectively. The absorption rate refers to how long it takes to sell each home on the market at the current rate of sales, assuming that no additional homes were listed. As a rule of thumb, an absorption rate of 6 is considered a balanced market. A rate below 6 is considered a seller’s market, and above 6 is a buyer’s market. In 2018, Chattanooga’s real estate market continues to be a strong seller’s market.
Despite the low inventory in 2018, home sales in Chattanooga were up by 1.9% compared to the previous year. The average sales price has increased by 5.5% at $222,946 relative to 2017. Over the past five years, the average sales price of homes in the Chattanooga has increased by 24.6%. The median sales price has gone up from $175,000 to $187,000.
The median days on market has been dropping over the last four years, which means that houses in Chattanooga are being sold at a faster rate. On average, most homes stay on the market for 65 days. In 2018, the median days on market for Chattanooga homes dropped to 50 days, a 15% reduction from 2017. This means that the residential properties in this location are not stale, which is a good thing for both buyers and sellers. Low inventory, higher sale prices, and decreasing days on market – all these indicate a strong real estate market in the Chattanooga area.
Some of the hottest areas in Chattanooga, Tennessee are:
- North Chattanooga
- St. Elmo
2019 Forecast for Chattanooga’s Real Estate Market
As of February 2019, the median list price of homes in Chattanooga is $259,900 – above the forecasted median home price of $161,595. The median list price per square foot in the same month is $132, and $131 in January. There was no change with regards to home resale inventory, which is 738. For this year, home sales are forecasted to increase by 5.2%, with home sales price at 4.3% growth. However, despite this predicted increase in home selling prices, Chattanooga is still an affordable market in contrast to most cities in the United States.
Practical Advice for Chattanooga Homebuyers
If you are considering buying a residential property in Chattanooga, TN, don’t waste time and make an offer. As mentioned earlier, home inventory in the Scenic City is low, so it is best to grab the opportunity to buy the house you want while it is still up for sale. Given the many advantages of living in this city, there is high demand for its homes and you wouldn’t want your dream home to fall into someone else’ hands. Also, considering the predicted price increase, it is most practical for homebuyers to make a purchase before the price gets higher. Bankrate also forecasts that home mortgage rates will keep rising in 2019 – another reason why you should buy at the soonest possible time.
For over 20 years, Chattanooga has been evolving to become one of the nation’s fastest growing hubs of tourism, technology, and outdoor activity, making it one of the best places to call your next home. If you’re considering relocating to this city, we can help. Please give us a call at 423-488-1882 or send us an email at [email protected] and we will be more than happy to show you the various home options that are available to you in Chattanooga, Tennessee.