Chattanooga TN Real Estate Market 2026: What the Data Shows

Chattanooga, Tennessee does not yet have a PropertyIQ Score. The underlying market data is available and the picture is worth examining, particularly for investors and buyers who have heard this market named as a Southeast opportunity. The data tells a more complicated story than the narrative suggests.

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Chattanooga Market Overview (as of February 2026 unless noted)

Chattanooga is a mid-sized Southeast metro of approximately 569,333 people (Census, 2023) spanning the Tennessee-Georgia border. Its economy includes manufacturing, healthcare, education, and a growing remote-worker base drawn by lower costs relative to Atlanta and Nashville.

Home values: The Zillow home value index was $314,962 as of January 31, 2026. The median listing price sits higher at $399,450 as of February 2026, a common divergence when active inventory skews toward higher-priced properties. Home values are essentially flat: down 0.14% year-over-year and down 0.06% month-over-month as of February 2026.

Overvaluation: At 30.7% overvalued relative to local incomes as of February 2026, Chattanooga carries a real affordability gap. Median household income is $68,666 (Census, 2023). The estimated income required to purchase at current prices is $106,172. The estimated affordable home price for a median-income household is $258,341, roughly $57,000 below the Zillow value.

Inventory: For-sale inventory grew 23.9% year-over-year to 2,440 homes as of February 2026. New listings rose 12.7% to 922. That is a meaningful supply increase in a market that was already balanced. More homes are entering the market than are being absorbed.

Days on market: 64 days as of February 2026. Properties are sitting longer than in comparable Southeast markets. That is consistent with a market where supply is growing faster than demand.

Price cuts: 20.4% of listings took a price cut as of February 2026. One in five sellers has had to reduce asking price. That is an elevated reading.

Pending ratio: 938 homes under contract against 2,440 active listings as of February 2026, a pending ratio of 38.4%. That reflects moderate demand against a growing supply base.

Sale-to-list ratio: 98.6% as of November 2025. Sellers are getting close to asking, but the price-cut rate suggests many have already adjusted expectations before going under contract.

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Rent and Investment Fundamentals

The Zillow Observed Rent Index for Chattanooga was $1,500 per month as of December 31, 2025. At a median Zillow home value of $314,962, this produces a gross rent multiplier of approximately 17.5x. That is a workable ratio relative to coastal markets, but it is not the cash-flow story that investors often expect from Southeast markets.

Price per square foot is $211 as of February 2026. New construction sales totaled 94 units as of November 2025.

Zillow's 12-month home price forecast as of December 2025 is +3.2%. That projection is positive but modest. It does not offset the current overvaluation gap in the near term.

The five-year appreciation figure is 20.62% as of February 2026. That is real equity growth, but the rate of appreciation has slowed significantly and the inventory buildup is a headwind going forward.

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The Employment Picture

Unemployment in the Chattanooga metro was 3.6% as of November 2025. That is a healthy reading and reflects a diversified local economy. The metro has attracted logistics, manufacturing, and technology employers over the past decade.

The homeownership rate is 68.31% as of 2023 Census data, meaningfully above the national average. Median age is 40.4. This is a mature, owner-oriented market, not a transient renter market.

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Preliminary Read (Without a PropertyIQ Score)

The data picture for Chattanooga is mixed. The fundamentals that drove appreciation in prior years, tight supply and in-migration from higher-cost Southeast metros, are showing strain. Inventory is up 24% year-over-year. Price cuts are running at 20%. Home values are flat.

At 30.7% overvalued with a median income of $68,666, there is limited runway for further appreciation driven by local purchasing power. The market is dependent on continued demand from buyers relocating from more expensive cities.

That is a real demand source. But it is not a guarantee, and the current supply data suggests the market is absorbing in-migration at a slower rate than it was two years ago.

The PropertyIQ Score, when available, will incorporate all of these signals into a single index. Check the Chattanooga market page for score status.

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