Media coverage of Chattanooga real estate market

Recently the Chattanooga Association of REALTORS released its 1Q 2008 report, which showed what I thought were very encouraging numbers. And I posted that opinion in a previous blog.

The headline in the Chattanooga Times Free Press gave a different interpretation. The headline in Wednesday's Business Briefs was Local housing sales off 19%. The second paragraph of the brief pointed out that the median price in 2008 was down from 2007, $135,000 compared to $136,900.

The article gives the perception that the Chattanooga market is down and struggling, like so many of the larger market areas.

Actually the 1Q figures tell a different story for me. The underlying fact is that 2007 was a record year for the area. After such a boom year, the market must naturally slow a bit.

Given the number of distressed sales that we have experienced in the area and the large inventory from excessive new constrution, the numbers speak to me that the local market is quite strong for there only to have been such a slight decline in the median price.

The reduction in the number of sales, so forbodingly decried in the headline as a drop of 19%, looks much better in the larger perspective of the last decade.

The report shows the trend the housing prices since 2000.

2004       $116,000

2005       $126,000

2006       $131,500

2007       $136,900

2008       $135,000 1Q

This does not seem to me to be a scary trend of home price decline. In fact, taking out the numbers from a very slow January, the market is very much showing growth.

The report provides these numbers. (Units/Median price)

Jan 2008               395/$127,000

Feb 2008              496/$138,375

Mar 2008             570/$138,000

Foreclosures remain a problem, but except for the hardest hit areas of California, Florida, Michigan, and some areas in the North East, housing seems to be holding up. The media is not really reporting this truth, and I think that lack of balance is hurting consumer perceptions.

With the recent news that core inflation is holding, mortgage rates should remain low. This will insure that housing continues its rebound, and help to quicken the recovery in the larger markets. As long as Congress does not kill off the industry.