The Chattanooga housing market is transitioning to a more balanced state.
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 is showing signs of returning to more typical conditions after experiencing extraordinary growth over the past two years. Notably, the average time a home stays on the market has increased to levels seen before the pandemic-driven boom, indicating a shift from a highly competitive seller’s market to a more balanced environment.
One illustrative example involves Sharon and Pete Butler, long-term residents of Hixson, who sold their family-inherited home in just eight days—an unusually quick sale in the current market. In comparison, the average property now remains listed for approximately 43 days before sale, aligning with pre-pandemic norms. This change marks a significant departure from the peak period where homes often sold within mere days.
Data indicates that the average number of days on the market peaked around 43 days in 2020, plunging to about 20 days in 2022 amidst the height of the pandemic surge. Recently, those figures have stabilized back at approximately 43 days in 2024. Real estate experts suggest this pattern signifies a transition from a seller’s market characterized by bidding wars and above-asking offers back to a more normalized market environment.
Currently, the inventory of homes available for sale hovers around 3.7 months’ supply, which is below the six months generally seen as necessary for a buyer’s market. This suggests that while the market is cooling, it remains slightly favoring sellers, though less so than in previous years.
The initial boom in Chattanooga’s housing market during the COVID-19 pandemic was driven by low-interest rates coupled with significant migration to Tennessee, especially from more expensive states. These conditions led to intense competition among prospective buyers, often resulting in multiple offers, bidding wars, and a tendency for buyers to waive inspections and appraisal contingencies to secure homes.
As the market cools, signs of stabilization include an increase in seller concessions and more flexibility among buyers and sellers. The average sales price has also risen, from $367,491 in 2023 to $390,133 in 2024, with median sale prices increasing from $315,000 to $330,000 during the same period.
High-demand neighborhoods such as Chattanooga’s North Shore and Signal Mountain continue to see quick sales. Conversely, homes located in overbuilt areas like Ooltewah are experiencing longer market times, reflecting a normalization trend and variations in property desirability.
Although the Chattanooga market experienced outsized growth during the pandemic, experts note that local trends do not always follow national patterns. Current forecasts suggest no substantial market shifts within the next year unless interest rates decrease markedly. The local market remains relatively stable compared to other regions, offering attractive, more predictable investment opportunities.
Chattanooga’s cost of living, outdoor amenities, and vibrant community events enhance its appeal. The city also faces challenges related to attracting and retaining first responders, with proposed budget adjustments aiming to raise salaries and potentially reduce property taxes, which could further influence housing affordability.
Starting salaries for police officers and firefighters in Chattanooga are approximately $45,000 and $43,000 respectively, highlighting an effort to retain essential personnel amidst competitive pay environments. Property taxes could soon be reduced from $2.25 to $1.99 per $100 of assessed value, marking a significant decrease after decades of stability.
The Tennessee tax environment, characterized by no state income tax and a lower overall cost of living, continues to attract new residents, further supporting the city’s growing housing market.
Overall, Chattanooga’s housing market is transitioning toward a more balanced state. While prices remain high and inventory is still somewhat limited, the rapid-fire sales and bidding wars of recent years are subsiding, creating increased opportunities for buyers and more predictable prospects for investors. The market’s evolution is influenced by regional preferences, economic policies, and broader national trends, shaping Chattanooga into a resilient and increasingly stable real estate landscape.
The market slowdown is primarily due to increasing days on market, rising inventory levels, and fewer multiple-offer situations. After two years of rapid growth driven by pandemic-related factors such as low interest rates and migration, the market is stabilizing toward a more typical pace.
While the overall trend shows prices increasing, the pace of growth has slowed, and some properties are seeing more negotiating room. Average sale prices increased from $367,491 in 2023 to $390,133 in 2024, with median prices rising from $315,000 to $330,000.
Yes, the market remains attractive due to its stability, affordability compared to national markets, and opportunities for buyers with increased inventory. The city’s economic and community amenities also enhance its appeal.
With inventory increasing and market conditions stabilizing, first-time buyers are gaining more opportunities. Local efforts to improve salaries for first responders and reduce property taxes may also improve affordability.
| Feature | 200 COVID-19 Surge | 2022 Market | 2024 Market |
|---|---|---|---|
| Average Days on Market | ~20 days | ~43 days | ~43 days |
| Average Sale Price | Data not specified | $367,491 | $390,133 |
| Median Sale Price | Data not specified | $315,000 | $330,000 |
| Property Inventory | Low, competitive | Rising, more balanced | Sustained, stable |
| Market Type | Seller’s hyper-market | Cooling, transitioning toward balance | More balanced, stable |
| Interest Rates Impact | Low, fueling surge | Higher, slowing activity | Stable, minimal change expected |
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