While a majority of the Tennessee real estate markets continue to suffer as a result of the economic recession of 2008, many real estate experts believe that the Knoxville real estate market may be one of the few with a more optimistic outlook for the near future. Unlike most Tennessee real estate markets, experts believe that the Knoxville market may have already hit bottom and be ready to begin its recovery. Although it is unsure of when people will begin to see consistent and significant improvement, many believe that the slight increases reported over the past months will gain momentum to bring recovery sometime in 2010. Nevertheless, affordability of the housing market will continue to be a major factor in the recovery of the Knoxville market since affordability seems to be the main deciding factor in the success of most Tennessee real estate markets.
The Memphis Business Journal has reported that most housing markets throughout Tennessee seem to be suffering due to a lack of affordability in the properties for sale in those markets. Numerous real estate companies are reporting that basically all markets consisting of homes priced more that $400,000 are at a standstill. In Memphis, sales of homes priced over $400,000 have decline by 58 percent as of May 2009 and 32 percent compared to sales made in the first quarter of 2008. Germantown is reporting a 41 month supply of properties valued at $500,000 and above. Jumbo mortgages, which are loans made above $417,000, have experienced declines by more than 70 percent. Many experts are finding that real estate markets that are much more affordable are faring much better than those with more expensive properties.
Knoxnews.com has reported that the real estate in Knoxville has posted increases in the number of home sales over the past few months. Although most housing markets in Tennessee are still on the decline, experts believe that the Knoxville real estate market may have already hit bottom. Some real estate agencies in Knoxville are reporting that home sales made in September of 2009 are higher than the number of home sales made during the same period in 2008. Although it is unsure when consistent and significant improvements will be made, many are optimistic that the coming months will show the end of the Knoxville real estate struggles.
As a result of the major economic recession that began in the fall of 2008, most of the Tennessee real estate markets continue to suffer, with no signs of recovery in the near future. Many real estate experts believe that a majority of the Tennessee real estate markets have not yet hit bottom and expect the real estate to continue to decline well into 2010 before any signs of recovery could be evident. Although a majority of the smaller real estate markets are the ones suffering the most, some of the larger and more established commercial and residential real estate markets have been able to weather the recession successfully, showing less significant declines. The southeastern Tennessee real estate markets, including the Chattanooga real estate market, also seem to be faring quite well due to the greater affordability of the real estate in the region. Although signs of improvement in the real estate in the region have not been significant, the real estate in the area has posted much smaller rates of decline than the rest of Tennessee.
The Memphis Business Journal reports that a majority of Tennessee’s real estate markets are struggling due to lack of affordability of the real estate. Markets such as the Chattanooga real estate market are faring much better because housing is not as expensive in the region, and most home-buyers are only looking for the affordable or “bargain” priced homes on the market. The Memphis Business Journal reports that a majority of all real estate markets dominated by properties exceeding $400,000 are basically at a standstill. In Germantown, the supply of properties priced at $500,000 and above is determined to be a 41 month supply based on the current rate of sales. In the Memphis area, properties over $400,000 have declined by 58 percent in sales through May of 2009, with only 189 sales reported. Compared to the first quarter of 2008, the home sales over $400,000 have declined 32 percent. Multiple sources also indicated that the originations of jumbo mortgages have also declined by more than 70 percent. This does offer hope for the real estate in Chattanooga though due to the greater affordability of the properties there.
The Channel 9 News in Chattanooga has also reported that even though Chattanooga’s real estate market has been unable to post any significant gains over the past months, it has not posted any declines either, which contrasts a majority of the other Tennessee real estate markets that are still experiencing significant declines. However, many real estate experts do expect the real estate in Chattanooga to decline during the winter season, following annual trends of the region observed over the past years. Spring and summer months are much more successful times for the market in the region, but during the winter months the market is expected to decline by around 20 percent in terms of home sales. Nevertheless, experts believe it is the affordability of the Chattanooga real estate that will keep it from declining as much as other Tennessee real estate markets.
Marked by a real estate market that is considered by many to be unaffordable, Nashville continues to suffer as a result of the 2008 recession. Like most markets in Tennessee, the Nashville real estate market has experienced significant declines, and many experts believe that these markets have not yet hit bottom, meaning that declines are expected to continue into 2010 before there can be any signs of hope for the end of these economic struggles. Many experts attribute the lack of affordability to Nashville’s continuing decline in the housing market. The only markets in Tennessee that are fairing well are those in the southeast, where the real estate market is much more affordable.
The Tennessean.com reports that the lack of affordability of condos in the region continues to be the main factor preventing the improvement of the Nashville real estate. Although tax breaks have been offered to developers who promise affordable housing developments, the city has been fairly ineffective regulating the prices of the newly built condos in order to ensure their affordability. This has gained the criticism of many real estate experts who believe that these newly constructing “affordable” housing options are still unaffordable to most people in search of a home in Nashville. Prices for these units are around $150,000, but prices seem to be rising above what is already considered an affordable price for someone with a moderated income.
The Nashville Business Journal has also reported that according to a recent study, home prices in the Nashville real estate market are expected to continue to fall most likely through 2010 and into 2011. With many properties still considered unaffordable, most sellers are being forced to lower their prices in order to attract buyers. Although home prices have fallen 3.5 percent from the previous year, Nashville home prices are somewhat stable currently, rising 2.9 percent between the first and second quarter of 2009. Nevertheless, experts believe that home prices will start to decline, resulting in a average of 14 percent during the next 12 months.
Many of the Tennessee real estate markets are continuing to suffer well into 2009 as a result of the recession that began in 2008, greatly affecting the economies of countries around the globe. Although real estate experts have hope for the real estate in Tennessee, they don’t believe any recovery will be evident until well into 2010 at the earliest. Although the major real estate markets of high value in Tennessee have been able to survive the recession, many secondary markets have struggled over the past months with no signs of improvement. Many experts believe that most Tennessee real estate markets have yet to hit bottom before any significant recovery can be made.
According to the Memphis Business Journal, real estate experts expect the struggling commercial real estate in Tennessee to keep most other markets from improving in the coming months. Although industrial and office buildings of high value have shown the most promising performance during the recession, real estate experts believe that values have not yet hit bottom as debt on commercial real estate loans appears to be rising. Also reported are the financial problems that many strip malls are facing, as well as the numerous mom and pop stores that have been forced to close. Many property owners are also under pressure from major retail companies to renegotiate. Currently, East Memphis has a vacancy rate of 11.5 percent. Approximately $400 billion in commercial real estate loans are expected to be due in 2009, but experts believe that by 2012 debt obligations will have risen to $1.8 trillion. The Memphis Business Journal also reported that according to a survey, most people do not expect to see any recovery in the Tennessee real estate market by the end of 2009. Just over half of the people believe that the real estate market won’t even hit bottom until some time between the fourth quarter 2009 and the third quarter 2010. Currently, it seems that the real estate in Tennessee is expected to struggle during the next few months.
The Chattanoogan.com has also reported that Tennessee home sales have remained inconsistent over the past months, except for the fact that that are always below 2008’s performance levels. During September of 2009, the median home price was $129,000, which was down 6.2 percent from September 2008, but the decrease was fairly negligible compared to that of the month before. So far, many real estate experts are expecting the Tennessee real estate market to decline in the coming months until it hits bottom, hopefully some time in 2010.