The Scenic City’s red-hot real estate market is finally showing signs of cooling. After years of homes flying off the market within days of listing, Chattanooga-area properties are now sitting on the market for the longest periods since 2019, signaling a significant shift in local housing dynamics.
The Numbers Tell the Story
Recent data from the Greater Chattanooga Association of Realtors reveals a significant slowdown in sales velocity:
- The average Days on Market (DOM) for residential properties has climbed to 45 days in early 2025.
- This contrasts sharply with the peak frenzy of 2021-2022, when DOM was just 18 days.
- This represents the most dramatic slowdown the region has experienced since the pre-pandemic era.
- The median home price in Hamilton County has reached $285,000, up from $198,000 in 2020.
- Luxury markets (Signal and Lookout Mountains) are averaging 60+ days on market, while more affordable areas (East Chattanooga and Hixson) are moving faster at around 35 days.
What’s Driving the Change?
Several factors are converging to create this market shift in the Chattanooga area:
- Rising Interest Rates: Mortgage rates climbing above 7% have priced out many first-time buyers. Local lenders report a 30% decrease in pre-approval applications compared to 2023.
- Inventory Recovery: The Hamilton County housing inventory has increased by 85% year-over-year, giving buyers more options and reducing urgency. New construction in areas like Ooltewah and Soddy-Daisy has been a key contributor.
- Economic Uncertainty: While Chattanooga’s job market remains stable (supported by companies like Amazon, Volkswagen, and McKee Foods), potential buyers are exhibiting more caution about major financial commitments.
- Price Fatigue: After three years of double-digit appreciation, many local buyers are experiencing sticker shock, putting homeownership out of reach for many middle-income families.
Neighborhood-by-Neighborhood Breakdown
The market slowdown is not affecting all Chattanooga neighborhoods equally:
| Neighborhood/Area | Average Days on Market | Market Trend |
| North Shore and Southside | 28 days | Still seeing relatively quick sales; favored by millennials and young professionals. |
| East Chattanooga | 32 days | Strong activity continues as investors and first-time buyers seek affordable options. |
| Hixson and Red Bank | 42 days | Moderate slowdown; families are shopping more carefully for value. |
| Signal Mountain & Lookout Mountain | 90+ days (some properties) | Feeling the biggest impact; luxury buyers are increasingly selective. |
What This Means for Buyers and Sellers
For Buyers:
This shift represents the first real opportunity in years to shop without intense pressure. Bidding wars are becoming less common, and buyers are successfully negotiating concessions like inspection periods and closing cost assistance.
For Sellers:
The new reality requires strategic adjustments:
- Properties must be priced competitively from day one.
- Focus on home condition and presentation—minor repairs, fresh paint, and professional photography are now essential.
- Overpricing, which worked in 2021, now leads to extended market time and eventual price reductions.
This market shift represents a return to more traditional real estate dynamics in Chattanooga, where both buyers and sellers have time to make informed decisions rather than rushed ones driven by fear of missing out.
Looking Ahead
Most local real estate experts predict this trend will continue through 2025, with market conditions gradually normalizing rather than experiencing a dramatic crash. Chattanooga’s strong job market, growing population, and geographical constraints suggest the area will avoid the dramatic price corrections seen in other markets. The city's appeal as a mid-sized city with outdoor recreation and relatively affordable living costs compared to Nashville or Atlanta should provide underlying support for the housing market.
For both buyers and sellers in the Scenic City, the key message is clear: the days of the lightning-fast real estate market are over, at least for now. Success will require patience, realistic expectations, and strategic thinking.
About Grace Frank Group
Grace Frank is a seasoned real estate professional with over 25 years of experience in listing properties, negotiating challenging situations, and working with buyers. Grace has completed over 150 Million in 1031 Exchanges. Our expertise is New Construction, Relocation, Existing Home Sales, Farm and Land Sales, Investment Listings, Sustainability, Investor Purchases up to $25M, and Commercial Listings and Sales.
For more information, contact the Grace Frank Group at (423) 544-7156 or email grace@gracefrankgroup.
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