Recap of the Economic Outlook luncheon 08.16.2024
The Greater Chattanooga Realtors and the Homebuilders Association in Chattanooga held the 10th annual Economic Outlook Luncheon on August 16th. This event remains a favorite of ours because the information is rich and the sources are reliable. This year’s presenters were:
Adam Myers - Vice President Economic & Talent Development, Chattanooga Area Chamber of Commerce
Both presenters had very positive messages for Tennessee and the tri-state (TN, AL, and GA) region. Following is a summary of each of the presentations.
Dr. Jessica Lautz and NAR do a fantastic job of researching and reporting on the national and regional economic outlook as it affects housing. Although Lautz was clear that no one wants to predict exactly what the fed will do with rates, she could easily see a 25 basis points drop in September. She did note that others are predicting a more significant drop in rates.
Weekly average mortgage rates from 1971 to date.
Dr. Lautz was very positive about the state of current home owners. Homeowners are sitting on a lot of equity with very few, only 2% nationally, distressed properties. Folks are moving less than pre-covid years, with most staying in a home approximately ten years.
Some interesting trends in home buyers are the increases in single buyers, child-free homes, and multi-generational buyers that will “age in place.” Some things remain the same with buyers valuing shorter commute times, easy access to highways, and walkability in selecting a home location.
Some unfortunate trends continue in affordability due to the greatest housing shortage since 1995. Resales are very slowly ticking up while builders continue to carry the market with new builds. However, demand is expected to continue to keep pricing up as folks lean into the historical norms for mortgage rates. In other words, pent up demand caused by the high interest rates and prices is expected to open up this fall creating a strong fall/winter sales cycle that will outperform the 2024 spring real estate sales.
Low inventory coupled with pent-up demand means home prices to remain steady.
Our area continues to see national migration effects presented by both Lautz and Myers. Tennessee is in the top ten states for positive net migration while Hamilton County has seen a 3.7% population growth since 2020.
Tennessee is a top ten state with net population growth.
Hamilton County is attractive to employers, workers and retirees.
Adam Myers explained why companies continue to invest in the area keeping us growing steadily. Manufacturing continues to return to the area. And the diverse white collar labor pool is attracting back-office employers.
The primary drivers are:
deep non-union labor pool
the vast transportation systems
strong and affordable infrastructure of energy, water and fiber from EPB, TVA and the Tennessee River
lower cost of labor
customized technical training programs
proximity to many colleges and universities with engeniering, nursing, physical therapy, agribusiness, food science, business and finance graduates
Beyond the pull of jobs, the area has a strong quality of life appeal with its diversity of art, entertainment and outdoor actives as well as breweries, distilleries, eateries and plethora of natural beauty. These qualities combined with our low state taxes also contributes to the draw for retirees to settle in our area.
Real estate sales have a total positive economic impact on the local, state, and national gross product.
