In a strange twist of fate, the Tennessee housing market is forecast to experience improving conditions from its downturn as a direct result of massive flooding and severe weather that inundated much of the state. Higher home sales are projected to result as homeowners who have lost their homes in the devastating flooding, and other owners who are giving up on rebuilding purchase other homes.
Improving market conditions should materialize as homeowners whose properties were destroyed in the storms receive insurance settlements. Forty-five Tennessee counties have been affected and have been approved for individual or emergency public assistance. Four counties, most heavily damaged by flooding have been approved for federal disaster assistance as a result of extreme weather that included numerous touchdowns by tornadoes.
Aid can range from grants for individuals to help pay for temporary housing, home repairs and other disaster related expenses to public assistance for state and local governments. More than 23,000 homes have been affected by the flooding and severe weather.
Nashville saw home sales improve before the flooding, driven by the first time home buyers federal tax credit and lower mortgage rates. The self-proclaimed Music Capital of the World is projected to pull out of the downturn.
The condominium market sustained only slight deflation. Growing sales activity should aid Nashville in its recovery as the excess inventory of homes listed for sale is sold off. As a result, Nashville is now forecast to see average housing deflation of just 3.8% in 2010.
The community was racked by severe weather in hard hit Clarksville, but businesses reopened quickly on the strength of its major military base for locals. The housing downturn should be aided by a slight increase in home sales as others from Tennessee relocate to the area. Clarksville will make it through the recovery on higher home sales and is projected to experience improving sales through 2010 on forecast average deflation of just 2.7% for the year.
Bargain-hunting real estate investors are making Memphis a destination for foreclosed homes in the financial crisis. Lower priced homes coupled with low mortgage rates should drive resurgence in sales, despite high unemployment in the area. A series of government programs, including federal money to rehabilitate homes should help the marketplace.
Memphis will work through the inventory of surplus homes more rapidly as a result of bad weather and is now forecast to see average housing values slide a lesser 4.6% in 2010.
In Knoxville home sales were boosted by the tax credit before severe weather struck, slowing any sort of recovery from materializing. But as insurance claims are paid a rebound is projected to develop in home sales. And because Knoxville didn’t experience extremely high housing inflation during the real estate boom, the market should recover more quickly with average home prices forecast to decline just 3.7% for the year.
Chattanooga, in eastern Tennessee was spared from flooding, and its’ real estate market is moving towards stabilizing. The area should benefit from an increase in population as a result of flood victims moving to the area. More foreclosures troubled the market for a time as home values slipped, but sales are projected to increase over the remainder of the year in Chattanooga as newcomers move in for its scenic mountain views and lower home prices. Chattanooga average housing prices are forecast to decline just 4.1% in 2010.