For the first time in three years home sales are on the rise in Nashville, the self-proclaimed Music Capital of the World. The federal government tax credit and lower home prices are getting credit for budging Tennessee housing markets after a near record downturn.
As sales improve in Nashville housing prices will eventually climb from the doldrums. Nashville has had some bright spots just like some Country music singers that come to Nashville to shine like a star. The condominium market sustained only minor price drops in the downturn, and should improve soon. But the market overall will have to sell-off the excess inventory before finding a balance. Nashville is forecast to see average housing deflation of 8.2% in 2010.
Memphis home sales are making a slight come back from the downturn, prompted by the government's tax incentives, but the over supply of homes and heavy volume of foreclosures are weighing on the market. Real estate investors are making Memphis a destination for foreclosed homes in the financial crisis. The epidemic has hurt the local economy with growing unemployment.
Lower price range home sales are improving, but the upper end of the market hasn't yet seen much movement. The expansion of the tax credit to move-up buyers should help the market to get on a course of improvement. But Memphis will have to work through a second wave of foreclosures before stabilizing, and is forecast to see average housing values slide 9.2% in 2010.
| City |
Forecast |
| Nashville |
− 8.2% |
| Memphis |
− 9.2% |
| Knoxville |
− 4.6% |
| Chattanooga |
− 6.3% |
| Clarksville |
− 4.2% |
In Knoxville home sales were boosted from the tax credit. The housing market downturn took longer to make an impact in the area than other places in Tennessee with declining prices. But because Knoxville didn't ever really see over inflationary times the fall-out in 2010 will be less severe, and is forecast to see average home prices decline just 4.6% for the year.
The Chattanooga real estate market is working towards a recovery with higher home sales due to lower prices and government incentives. A rise in foreclosures pressured the market, drawing newcomers for its affordability and high quality life style. Additional foreclosures are projected to add pricing pressure deflation in 2010. Chattanooga housing prices are forecast to drop less in 2010 though at 6.3%.
Higher housing starts in Tennessee and particularly Clarksville will assist the market to make inroads to a recovery. A military base has strengthened the local economy during the downturn after new subdivisions were left abandoned by developers in the early part of the housing bust.
Home sales, however, were also given a boost to help improve things in Clarksville as the first time home buyers' tax credit and lower prices got buyers off the fence. Clarksville should see an improving trend in 2010 in terms of home sales, while it begins a recovery process that could take a number of years. Clarksville is forecast to see average housing deflation of 4.2% for the year.
