As I was looking for data to summarize the Chattanooga market in October, the local real estate association's statistics for October had not yet been released. Therefore, this briefing focuses on the most recent confirmed figures from September, supplemented by data on interest rates and rental inventory for October.

The baseline data comes from the Greater Chattanooga REALTORS' September monthly report released on October 11. It's important to note that this figure encompasses single-family homes, townhomes, and condos across the Chattanooga metropolitan area.

The most notable aspect is the prices. The median transaction price in September was $340,000, which is exactly the same as September of last year.

From January to September this year, the cumulative median price is $345,000, reflecting a 1.9% increase compared to the same period last year. While this isn't a significant jump, it indicates a steady trend.

For reference, the median price in October of last year was $330,000. Once the October statistics are released, comparing them to this figure will clearly show the trend.

The transaction volume was surprisingly good. The number of closed transactions in September was 923, up 1.3% from last year, and the cumulative total since the beginning of the year is 8,405, which is a 7.0% increase.

However, the number of pending transactions is concerning, with 797 pending deals, down 2.9% from last year. September was the first month this year where pending transactions decreased compared to the previous year, which is a point of concern.

Inventory is definitely building up. At the end of September, there were 4,106 homes for sale, which is 16.8% more than last year.

The months of inventory have increased to 4.5 months, up from 4.1 months last year. New listings also rose to 1,373, a 4.1% increase.

The time it takes for homes to sell has also increased. On average, it took 56 days to sell a home, which is 21.7% longer than the 46 days in September of last year.

The ratio of actual sale price to initial listing price was 94.4%. This is slightly lower than last year's 95.0%, indicating that there may be more room for negotiation than before.

So, what happened in October? The biggest variable was indeed interest rates.

According to the association's report, the Federal Reserve raised the benchmark interest rate by 0.25 percentage points on September 16, and by the end of September, the 30-year fixed mortgage rate exceeded 7%. It seems natural to view this trend as having dampened market sentiment throughout October.

According to Freddie Mac's weekly survey, as of November 5, the average 30-year fixed rate was 7.18%. Although it has decreased for three consecutive weeks, it is still nearly 1 percentage point higher compared to 6.22% a year ago.

Considering the overlap of the decrease in pending transactions in September and the rise in interest rates, it seems unlikely that the number of contracts in October will be strong. I recommend checking this part again once the statistics are released.

For rentals, it's more realistic to look at data from listing sites. There isn't a separate official monthly rental statistic, so the numbers can vary significantly from site to site.

According to PadMapper's early November data, the median rent for a one-bedroom apartment was $1,127, for a two-bedroom it was $1,290, and for a three-bedroom it was $1,800. All three types saw a slight decrease compared to the previous month.

Trulia's data shows that the average rent in June was $1,510, which is 8% lower than a year ago. Although the measurement methods differ, the direction is the same in that rents are not increasing.

The ongoing supply of new apartments is also a contributing factor. Local media reports indicate that various apartment projects are underway or have just been completed in Chattanooga and Hamilton County.

For tenants, this is not a bad time. It's worth comparing the prices of similar complexes before renewing a lease and asking about incentives like free rent periods.

For buyers, the situation is a bit more complicated. While inventory is increasing and there is more room for negotiation, the monthly burden has actually increased due to interest rates.

In such cases, it's safer to budget based on the monthly payment rather than the home price. Negotiating seller concessions for closing costs or using rate buy-downs as bargaining chips can also be effective strategies.

For sellers, it's crucial to set a realistic price from the start. Given that the selling period has lengthened, the initial price often has a significant impact on the outcome compared to raising the price multiple times.

If the goal is investment, I recommend recalculating rental income. With rents stagnant and interest rates in the 7% range, cash flow can easily become tight.

In summary, Chattanooga is a market where prices are holding steady, but inventory and selling periods are increasing. It resembles a gradual move toward balance rather than a sharp decline.

The official October statistics can be found in the monthly report on the association's website at gcar.net. They are typically posted before mid-next month, so once released, you should check the median price and pending transaction numbers first.

Personally, I believe this winter will be a good negotiation period for serious buyers. If the trend of gradually decreasing interest rates continues, I would choose to act before the spring peak season.