The Chattanooga area housing market is booming. Homes are getting multiple offers and selling in just days of being listed. There are hardly enough homes in inventory for the amount of people looking to buy.
So … when will the bubble burst? Are we looking at another housing crisis on the horizon?
With the demand for homes only going up in this bustling market, we’re looking at the possibility of housing prices raising to the point that buyers won’t be able to afford them. Although we aren’t there yet, with home prices trending upwards, we have to look back and consider what that meant historically in the real estate market.
In the past, when home prices have gone up at this rate, it kept many potential buyers—from young newlyweds looking for their starter home to retirees looking to downsize—from be able to purchase. Without buyers able to buy, the market slowed to a crawl. Homes that were selling in days were then sitting on the market for weeks or months.
Along with this change in the market in the past came higher interest rates, which is what we’re currently seeing in 2018. As land values peak, interest rates rise. We’re currently at a four-year high for interest rates (arguably still low at around 5% in comparison to 6.7% in July of 2007 or the all-time high at 18.16% in 1979), which points both toward the past and towards the potential of a market crash in the future.
What does that mean for the Chattanooga and North Georgia area?
Chattanooga is growing at an incredible pace and homes are flying off the market, but eventually it will slow down. Those looking to buy should consider jumping now while home prices are still low enough to be attainable and interest rates are still relatively low. As for sellers, there is no better time than now to list.
If you’re looking to buy or sell, we’d love to help! Give us a shout at firstname.lastname@example.org.