Real Estate Rising in Wake of VW Announcement

They may not be scam artists or rip-off experts, but they're looking to make a quick buck. And they may do it, by inflating the price of a house or business property near the site of the Volkswagen plant.

We've discovered people with homes and business properties to sell, near Enterprise South already with dollar signs in their eyes. They're raising the price of their homes and business properties for sale.

Randy Durham with the Chattanooga Association of Realtors said, We're seeing about ten percent of the market is showing some price increase, while the majority of the market is showing a little bit downward."

In the first quarter of the year he says the median price of a home in Chattanooga was $135,000.

In the second quarter, which includes the V-W announcement, the average price rose to almost $140,000.

Mr. Durham says, a lot of the motivation, is the high expectations from all the jobs projected from Volkswagen. Some of that motivation. is greed.

"Just because a property is priced at a certain amount doesn't mean it's actually worth that amount," he said.

Commercial real estate developer Ken DeFoor says an example of that, is a piece of business property he sees on his way to work every morning.

"I thought it would be on the market for about $300,000 and it was offered to me last Friday for 3.2 million or 3.5 million."

Experts say, it's way too early to see sellers inflating the price of their homes and business properties on the market.

Jed Marston with the area Chamber of Commerce said, "Allow the market to set the price and we'll see great gains and great prosperity in the long run, if we just allow the market to set the price."

Durham says, if sellers get greedy, they may price their homes right out of the market.

During our investigation, we also discovered that, although residential home sales are in a slump in Chattanooga, the same is not true for business properties.

DeFoor said, "The prices that I'm seeing are breathtaking, as the way they are excalating, and our cost."

Experts are afraid the residential market will catch up to it as Volkswagen gets closer.

People are being warned not to over-inflate their homes for sale, just because V-W's coming to town.

So how do you prevent price-gouging in the real estate market?

Our experts say, first, consult a realtor, then check with the local tax assessor's office.

If there's a big difference between the property's appraisal value, and the asking price, you're about to get gouged.