Chattanooga is almost the polar opposite of the rest of the state of Tennessee, and especially of the other large city in the state, Memphis. Although at first Chattanooga was quite similar to the rest of the Tennessee real estate market - nearly immune to the devastating effects that ripped through much of the nation's real estate - the two major cities have taken almost totally divergent paths subsequently. While Memphis remains quite stable in most sectors, even showing marked improvements in the commercial and residential sections, Chattanooga has taken some serious hits in recent months. Simply put, the negative effects of the economic recession have finally caught up with Chattanooga after an almost year long delay.
Possibly the largest problem with the Chattanooga real estate market is the number of foreclosures that are currently floating around the market. News Channel 9, a Chattanooga television station, reported on July 16, 2009 that “In recent weeks the Hamilton County real estate market is taking a sharp downward turn with an ever-increasing number of home foreclosures. Banks are just saying no to people struggling to make ends meet and that means a lot of homes are flooding the market in foreclosures.” Cindy Walker, a broker with Crye-Leike Realtors, said that “Foreclosures are just increasing astronomically all of a sudden.” Although Chattanooga has long been almost immune to the real estate crisis currently gripping America, that is clearly changing as of late. Statistics taken from RealtyTrac, an Irvine California real estate analysis company, illustrated that homes in foreclosure outnumber “regular” sales by nearly two to one, a severely troubling figure.
There are no signs that the rate of foreclosures in the Chattanooga real estate market is going to slow any time soon. In the words of Nickie Schwartzkopf, president of the Chattanooga Association of Realtors, “Unfortunately, I think we’re going to see even more foreclosures. There are still a lot of mortgages whose interest rates are going to be reset in the next couple of years at higher rates and, with unemployment still very high, there could be a lot of people who won’t be able to make their payments.” In fact, the Chattanooga Neighborhood Enterprise has gone so far as to found the Chattanooga Foreclosure Prevention Hotline in response to the crisis.