The greater Northshore area real estate market, including North Chattanooga and Hill City, remains robust, despite a rapidly-changing economic environment. Here are some key statistics that define the current landscape:

• Number of Listings: As of August 4, 2024, there were approximately 78 active listings in the greater Northshore area. This number offers buyers a variety of choices from historic homes to modern new construction, condos and apartments.
  
• Number of Homes Sold: From July 4-August 2024, 20 homes sold in the greater Northshore area. This figure is slightly lower than the previous month’s 25 homes, indicating seasonality. Typically, we do find a bump in home sales as in late July and early August, as homeowners with children prepare to close on a home before the start of school, so this figure may increase within the next few weeks.
• Median Sales Price: The median sales price for homes in Northshore stood at $712,500, doubtlessly skewed by 6 out of 20 homes selling above $1M, including one closing at $2,450,000 during the previous month. Sellers are cautioned from drawing too quick of a conclusion about the median sales price, as the diversity of offerings in Northshore selling below $500,000 constituted 40% of sales for the area.

• Current Mortgage Rates: According to Mortgage News Daily, as of August 5, 2024, the average 30-year fixed mortgage rate was 6.34%, down from nearly 7.03% the same time last year. While consumer mortgage interest rates will vary according to individual credit worthiness, debt-to-income ratio (DTI; comparing monthly debt obligations to monthly income) and other factors, this decline translates into a monthly $183 savings for Northshore home buyers making a purchase of $500,000 with a 20% downpayment. A drop to 6%, which may quickly lie on the horizon, may save borrower $271 per month, putting a dream home within economic reach for some home buyers.
• Refinancing/Home Equity Lines of Credit: Northshore homeowners should be aware of the interest rate currently being charged on their home loan, if they have one. While Redfin reports that 91.8% of US homeowners with a mortgage loan have a rate lower than 6% (contributing to what is being called the “lock-in effect”, where homeowners are hesitate to list their homes for sale and move), the few that have not recently refinanced or taken on a new home loan may achieve some savings by refinancing in the coming year. On the other hand, with further drops in the Fed Funds rate, folks who have an existing home equity line of credit may find the interest being charge on this loan product being reduced they may likewise benefit from a reduced minimum payment amount.

• Increased Competition Among Agents: The Settlement doubtlessly will foster increased competition among real estate agents, who will be required to explain their value proposition clearly with consumers. With more transparency around commissions, agents will be impelled to market their services on the basis of quality and competency, rather than relying solely on traditional commission structures. This shift is likely to benefit both buyers and sellers in Northshore, and elsewhere, as agents strive to provide superior service to win clients based on previous experience, market knowledge and success, rather than on popular agent social media marketing efforts or prior existing relationships alone.
  
• Impact on Listing Practices: The Settlement encourages more competitive listing practices. Agents will be required to negotiate their commissions and offer flexible fee structures, which may result in cost savings for sellers. For the Northshore market, this means that sellers might find more favorable terms when listing their properties. Agents should clearly explain the several options that sellers have regarding commissions, including the traditional proposition of offering the buyer’s agent cooperating compensation, that is, the seller agreeing to share a portion, whether a dollar amount or a percentage of the final sales price, of listing agent’s commission with the buyer’s agent. In the short term, this may be an attractive marketing option, as buyers, sellers and indeed the entire real estate industry acclimates themselves to the new reality. Agents and consumers should know that there are already discussions among some larger national brokerages, who have opted to provide compensation, say, through a seller’s credit to the buyer, in lieu of cooperating compensation, out of fear of additional litigation. If you’re planning to list, have a thorough conversation with your agent about what may be best for you.