Northshore Housing Market Update, September 2024: Transition to Neutral Market and What Sellers and Buyers Can Do Now
By Robert C. Baker
Northshore, one of Chattanooga, Tennessee’s most lively and sought-after neighborhoods, continues to attract a range of homebuyers—from young professionals to families and retirees. Its unique charm comes from a mix of modern condos, historic homes, and proximity to the Tennessee River. This trendy neighborhood offers a balance of walkability, riverfront views, and an artsy local culture, making it a key focus for those seeking a blend of urban amenities and suburban tranquility. In this September 2024 update, we’ll take a closer look at how Northshore’s housing market is performing amidst a broader shift in the greater Chattanooga real estate market. Key statistics and emerging trends will be discussed, helping both buyers and sellers understand the current market dynamics.
Greater Chattanooga Housing Market Overview
The greater Chattanooga housing market has been showing signs of transition since mid-2024, moving away from the frenzied seller’s market seen in 2021 and 2022, when buyers often faced fierce competition and rising home prices. Now, as of September 2024, the area is shifting toward a more balanced or neutral market, offering greater opportunities for buyers to negotiate better deals.
- Inventory on the Rise: As of September 8, there are 2,860 active residential listings in the greater Chattanooga area. This represents a noticeable increase in available homes compared to the tight inventory seen over the past few years. As more homes hit the market, buyers have more choices, leading to less urgency and competition.
- Months Supply of Inventory (MSI): A critical metric for understanding the balance between supply and demand, the months supply of inventory reached 3.2 months in July 2024. This is a significant jump from 2.0 months in July 2023. When MSI exceeds 3 months, the market is generally considered to be moving towards a balanced market. With more homes sitting on the market, sellers are facing increased pressure to price competitively or risk longer selling times.
- Closed Sales: Closed sales data further highlights the changing market. In July 2023, there were 866 closed sales, which climbed to 957 in August. The first week of September 2023 saw 239 closings. Fast forward to 2024, the number of closed sales dipped slightly, with 895 in July, 875 in August, and just 120 in the first week of September. This year-over-year drop suggests that buyer activity is cooling down, even with more homes available, as market dynamics shift toward a more balanced state.
While part of this slowdown can be attributed to seasonal trends—fall traditionally brings fewer buyers to the market—it also points to a broader trend where the demand frenzy of the past few years has begun to taper off. This shift is giving buyers in the Chattanooga area more room to negotiate, and sellers need to be more realistic with their pricing and expectations.
Northshore Housing Market in Focus
As with the greater Chattanooga area, Northshore is seeing some key changes in its housing market. However, the Northshore market retains its competitive edge, particularly in specific price ranges, due to the desirability of the neighborhood and its unique features. Let’s dive into the latest numbers and trends for Northshore.
Sales Activity and Inventory Levels
- Closed Sales Trends: Northshore saw 18 homes close in July 2023, with 24 closings in August, and 8 homes sold during the first week of September 2023. In contrast, July 2024 experienced a stronger performance with 23 homes closing, but sales slowed in August to just 18 homes, and only 1 home closed in the first week of September 2024. This drop in closed sales, especially during the typically busy summer months, suggests that the Northshore market is cooling down faster than expected. The slowdown could be due to a combination of factors, including increased inventory, higher interest rates, and buyers becoming more cautious.
- Current Inventory: As of September 2024, there are 72 active listings in Northshore, with prices ranging from $239,000 to $3,999,000. Out of these, 20 are condos or apartments, reflecting the growing demand for low-maintenance living options in this urban-centric neighborhood. Buyers have a wide range of options to choose from, but with increased inventory comes the expectation that homes will take longer to sell.
Pricing and Market Adjustments
One of the most telling signs of the market’s cooling is the frequency of price reductions. Sellers who initially listed their homes at prices reflective of the hot 2022-2023 market are now finding that they need to adjust to match current demand.
- Price Reductions: Out of the 72 active listings in Northshore, 41 properties (57%) have undergone price reductions. This high percentage is a clear signal that sellers are adjusting to the reality of a market that no longer favors them as strongly as before. Price reductions are an important indicator of changing market dynamics, as sellers aim to align with buyer expectations.
- Condo and Apartment Prices: Condos and apartments, which account for 20 of the active listings in Northshore, have also seen a range of prices. The 17 homes that closed within the past 30 days included condos and apartments priced between $232,750 and $500,000. Condos remain an attractive option for buyers seeking affordability and a lower-maintenance lifestyle, though even in this segment, price reductions are becoming more common.
- Median Sales Price: The median sales price for Northshore homes over the past 30 days was $500,000, with an average price of $282 per square foot. This is notably higher than other parts of the greater Chattanooga area, reinforcing Northshore’s position as a premium neighborhood. For buyers seeking homes in this area, it’s important to understand that, while prices may be softening, Northshore remains a highly desirable location, which helps to maintain property values.
Days on Market (DOM) and Selling Time
Another key metric to watch is the average days on market (DOM), which provides insight into how quickly homes are selling.
- Lower-Priced Homes: Homes priced under $400,000 are selling more quickly, with an average of just 23 days on market. This segment of the market remains competitive, particularly as buyers continue to seek out more affordable options in an expensive housing landscape.
- Higher-Priced Homes: In contrast, homes priced at $600,000 and above are taking longer to sell, with an average of 57 days on market. This extended timeframe suggests that higher-end homes are experiencing slower demand, as buyers in this price range become more discerning and wait for the perfect property or negotiate better deals.
Notable Transactions
One of the standout transactions in Northshore over the past month involved a property that sold for $1,590,000. This home sold at $491 per square foot and spent 73 days on the market before finding a buyer. This sale highlights the resilience of the luxury market in Northshore, though the longer selling period also indicates that buyers in this price range are taking more time to make purchasing decisions.
Looking Ahead: What to Expect in Fall 2024
As we move into fall 2024, the Northshore housing market, like the greater Chattanooga area, is expected to continue its shift toward a more balanced environment. This transition will likely present both challenges and opportunities for buyers and sellers.
- For Sellers: Pricing homes competitively from the outset will be key. With inventory rising and price reductions becoming more common, overpricing a home could result in extended days on market and the need for significant price cuts later on. Sellers should also focus on presenting their homes in the best possible condition to stand out from the competition.
- For Buyers: The increased inventory and price reductions make this a great time for buyers to enter the market, particularly for those looking in the mid- to higher-price ranges. With more options available and sellers more willing to negotiate, buyers can take their time to find the right property at the right price.
Final Thoughts
The Northshore housing market, while cooling, remains a desirable area for both buyers and investors. As inventory rises and activity slows, the days of multiple offers and bidding wars are fading. Whether you’re looking to buy or sell in Northshore, staying on top of these trends will be essential in making informed decisions and achieving success in this evolving market.
For those considering a move in or out of Northshore, understanding these changing conditions will help you navigate the market and take advantage of new opportunities as they arise. For more information, reach out to the sponsor of this blog, Robert C. Baker, at (423) 443-1649 or log on to MoveToChattanooga.com.