The economic downturn is forcing real estate developers to cut jobs and projects in Tennessee, while other employers also make cut backs. Housing markets are experiencing a spike in sales as a result of the first time home buyer's federal tax credit, but mainly in the lower price ranges.
The national financial crisis impacted most of Tennessee later than the rest of the country, but home values are sliding with weakening consumer confidence. In Nashville, known best for being the nation's home of country music, sales are off their hectic pace. Average values are eroding at a double digit clip and sales are expected to remain slow through the remainder of 2009.
One of the brighter spots of the market in Nashville is the condo market, which has only seen a slight loss in average values. The downtown Nashville condo market saw all-time historical growth only to witness developers scrambling to scale back. Overall housing deflation is forecast to average 14.1% for the year.
The housing slide is taking a toll on Memphis, where sales have been falling for more than a year. The values of homes are also off their record setting pace and are now forecast to deflate more for the year in Memphis. In the suburbs outside of Memphis, in Germantown and Collierville markets are doing slightly better. Housing prices in Memphis are forecast to deflate 15.2% on average in 2009. The foreclosure epidemic is making a major economic impact in Memphis. The ugly fallout from subprime mortgages is taking hold.
 |
| City |
Forecast |
| Nashville |
− 14.1% |
| Memphis |
− 15.2% |
| Knoxville |
− 8.1% |
| Chattanooga |
− 8.3% |
| Clarksville |
− 8.1% |
In Knoxville the real estate market is taking longer to experience falling values than else where in Tennessee, although home prices are sliding. The excess inventory and mortgages that are tougher to get isn't making it easy in central Tennessee. Knoxville didn't boom like many other more urban markets, but the fall-out from the financial crisis will have an increasing impact on housing values.
In the last decade Knoxville has seen lower home inflation than most other places and is forecast to deflate just 8.1% in average home values for the year.
Atop the breathtaking mountains of Tennessee in Chattanooga it's a more active market. The Tennessee Aquarium, IMAX Theater and Civil War battlegrounds attract tourists to check out the community. Home foreclosures are up and will increase as more adjustable rate mortgages re-adjust and many homeowners are unable to re-finance their property. Although sales have slowed, local lenders are offering mortgages at low rates to keep Chattanooga, which is forecast to deflate 8.3% in average home values for the year afloat.
In Clarksville, local government leaders are working on diversifying the economy after the community saw the biggest boom in real estate of any small city in the state during the real estate boom. The military base provided a more stabilized local economy until the boom and now Clarksville is trying to make changes to deal with the many new home developments built during the boom. Since then home sales have slowed and are forecast to stay quieter in 2009 on housing deflation of 8.1%.
