The Tennessee real estate market has joined the majority of the nation with a downward slide in housing prices. The increase in the supply of homes listed for sale and the credit crunch has struck. But not every where in Tennessee is entirely slumping.
In Nashville the housing market boomed for years, turning the "Music City" into one of the largest destinations for new home buyers in the nation. But home sales have slowed by as much as half from a year ago. The market is beginning to see its flattening stage end and is forecast to deflate an average of 4.1% in housing values by year’s end.
An increase in inventory has translated to a slower marketplace in most of Tennessee real estate as home owners have begun to make concessions to buyers. These days, prices have declined since loans are not being made as freely.
Baby boomers and retirees moving to Nashville have demanded more amenities and as a consequence home prices rose, while other areas of the country saw prices fall sooner. The increasing inventory of homes on the market will impact the market more drastically later in 2008, according to the Housing Predictor forecast.
 |
| City |
Forecast |
| Nashville |
− 4.1% |
| Memphis |
− 4.9% |
| Knoxville |
1.2% |
| Chattanooga |
− 4.3% |
| Clarksville |
1.4% |
Down along the Mississippi river in Memphis, where the blues make anyone dance to the beat of their favorite song along Beale Street, the housing market slowed in the later half of 2007, and investors produced a second surge of home sales before a quieter pace set in to slow the marketplace.
Now the ugly fallout from subprime mortgages is beginning to take hold in Memphis as foreclosures climb. The real estate boom never produced double digit appreciation in Memphis – just healthy better than average appreciation. Outside of Memphis, Germantown and Collierville led the way in home sales for the area. Memphis and the surrounding area are now forecast by Housing Predictor to have slower home sales through 2008 and see deflation of 4.9% in 2008.
In Knoxville the credit crunch has also slowed home sales along with harder to get financing. But there’s more than hope that the Knoxville housing market will stay healthy. Appreciation never hit wild double digits like other places, which just about assures the market that home prices won’t come falling down as much as other places.
Unemployment is low in the Tennessee valley, where manufacturing composes much of the local economy with a blend of high tech, auto parts and even agriculture with corn syrup. Knoxville is still experiencing population growth and is forecast to appreciate 1.2% in 2008.
The national housing down turn, however, has been rippling through the Chattanooga real estate market. Foreclosures have hit record levels, and are expected to increase. Chattanooga is projected to see less than two-thirds of the home sales it has seen in the last two years with 4.3% deflation.
In the military town of Clarksville locals don’t expect the market to be affected much by the subprime lending crisis since the majority of mortgages are VA and FHA loans. Growth outpaced that of Nashville during the boom, and Clarksville officials are trying to diversity the job base into more white-collar jobs.
But the credit crisis has begun to make an impact with slower home sales as a result of buyers’ uneasiness over the national real estate slow down. Clarksville was devastated by a tornado seven years ago, and has been in a rebuilding phase ever since. The market should hold fairly steady through 2008 and show slight appreciation of 1.4%, according to the Housing Predictor forecast.
