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Chattanooga, August 1, 2025
The Chattanooga housing market is shifting towards stability after two years of rapid growth. Recent trends show an increase in housing inventory and more predictable sales times. Sellers are adjusting negotiations as the market cools, with average home prices rising despite the return to pre-pandemic conditions. Local economic factors and favorable tax policies contribute to this evolving landscape, offering opportunities for buyers in a more balanced market.
The Chattanooga housing market has begun to return to a more balanced state following an intense period of growth during the COVID-19 pandemic. After nearly two years of rapid sales and rising prices, recent data indicates that the market is shifting from a seller’s market to a more typical, stable environment.
A notable example of this change involves the experience of residents Sharon and Pete Butler, who lived in their Hixson home for 20 years and planned to stay indefinitely. However, at their daughter’s request, the couple decided to move to Ooltewah. Their home sold remarkably quickly, in just eight days—an anomaly considering the current average number of days homes spend on the market in the area.
In the Chattanooga area, the average home currently spends approximately 43 days on the market before being sold. This is a significant increase from a low of 20 days in 2022, which itself was a period of rapid sales. As of 2024, the market has returned to the pre-pandemic average of 43 days, indicating a cooling trend and increased market stability.
Real estate experts note that the market is transitioning from a seller’s market—characterized by bidding wars and above-asking offers—to a more normalized state with increased inventory and less competition. Currently, Chattanooga has about 3.7 months of housing inventory available, whereas six months are typically needed to define a buyer’s market. This suggests the market is moving toward a more balanced condition but is not yet there.
Realtors attribute the initial housing boom to low-interest rates and a migration influx into Tennessee, as many sought affordable and appealing places to live during the pandemic. First-time homebuyers faced intense competition, often participating in open houses where multiple offers, bidding wars, and above-asking-price offers became common. Some buyers waived inspections and appraisals to secure homes quickly.
As the market cools, there are signs of stabilization such as an increase in seller concessions. The average sale price of homes in the Chattanooga area increased from $367,491 in 2023 to $390,133 in 2024. Similarly, the median sale price rose from $315,000 to $330,000 during the same period.
Properties in desirable neighborhoods like Chattanooga’s North Shore and Signal Mountain tend to sell quickly, whereas homes in overbuilt areas like Ooltewah may linger longer on the market. This variation underscores the ongoing adjustment in regional demand and inventory.
Market experts describe the current environment as a pendulum swing from the extreme seller conditions experienced during the pandemic, back toward a more balanced market. Despite recent fluctuations, Chattanooga’s real estate market does not always align with national trends, suggesting local factors heavily influence the area’s housing dynamics.
Looking ahead, analysts do not anticipate significant changes within the next year unless interest rates are substantially lowered. Chattanooga’s market remains relatively stable and offers predictable returns compared to larger or more volatile markets elsewhere, such as California.
With increased housing inventory, prospective buyers now face more options. Entry-level salaries such as $45,000 for police officers and $43,000 for firefighters highlight the ongoing competitiveness for first responders, prompting local government efforts to improve retention through salary increases and property tax reductions.
The Chattanooga city council has proposed a supplemental budget aimed at raising first responder salaries and reducing property taxes. The proposed property tax rate could decrease from $2.25 to $1.99 per $100 of assessed valuation, marking the largest reduction in decades. Tennessee’s overall tax-friendly climate, with no state income tax and a lower cost of living, continues to attract residents and contribute to Chattanooga’s appeal.
Chattanooga’s favorable climate, outdoor recreation options, and vibrant community events make it a desirable place to live, further underpinning its thriving real estate market amid ongoing adjustments.
The market is cooling after an overheated period during the pandemic, driven by increased inventory, higher mortgage interest rates, and less intense competition among buyers.
The average duration has risen to about 43 days from a low of 20 days in 2022, indicating a stabilization in sales pace.
Yes, both the average and median sale prices have increased from 2023 to 2024, reflecting continued demand, albeit at a more moderate rate.
With increased inventory and less bidding competition, buyers have more options and negotiating power, though affordability still depends on income levels and mortgage rates.
The city is proposing salary increases and property tax reductions to retain first responders amid competitive pay challenges.
| Feature | Details |
|---|---|
| Average Days on Market (2024) | 43 days |
| Days on Market (2022) | 20 days |
| Average Sale Price (2024) | $390,133 |
| Median Sale Price (2024) | $330,000 |
| Inventory Months | 3.7 months |
| Required for Buyer’s Market | 6 months |
| Property Tax Rate (Proposed) | $1.99 per $100 of valuation |
| Starting Salaries | $45,000 (police), $43,000 (firefighters) |
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