Year after year, quarter after quarter, experts have repeated the mantra they learned during the 2007 real estate crash: "The market has hit bottom," they would say. "It can't get any worse than this."
This time, it appears they were right.
In fact, the current housing recovery appears strong enough that if banks don't open the floodgates for development and construction loans, then the boom in home construction could stall for a lack of cleared lots, officials warn.
In 2012, the Chattanooga-area housing market bounced back in a big way. For the first time since 2007, the number of building permits in Hamilton County rose above 1,000, propelling the region out of the subprime housing downturn.
Scott Fontana, who decided to build his own home on Signal Mountain, said he just couldn't wait any longer after planning the move for the past six years. Interest rates, construction costs and property prices may be as low as they're going to get, he said, "so we pulled the trigger."
Fontana got a loan with a 3 percent interest rate, less than half of the 7.3 percent interest rate he paid in the 1990s for the purchase of his previous home.
"I wouldn't have moved forward if the interest rates weren't as low as they are," said Fontana, who works as a biostatistical research scientist. "This opportunity came up, and we decided that this is the best time to do it."
There's a lot of that going around.
Builders in Hamilton County applied to construct 1,010 homes worth $171 million in 2012, a 34 percent increase from the 754 applications builders submitted the prior year, according to The Market Edge, a real estate research firm.
Growth in Hamilton County again eclipsed that of rival Knox County by more than 100 building permits, a trend carried over from 2011.
"These are very strong, impressive numbers," said Dale Akins, president of The Market Edge.
Traditional wisdom holds that housing is a leading indicator. A depressed housing market will lead the country into recession, and a healthy housing market will lead the U.S. back to solid growth, the theory goes.
For four years, the nation has waited. At long last, builders have increased the pace of new home and apartment construction to nearly double the recession low reached in April 2009, to a seasonally adjusted annual rate of 954,000 new dwellings, according to The Associated Press.
Counties throughout the Chattanooga area reported similar results.
Catoosa County's building permit totals jumped 44.6 percent for the year for 107 new residences, while Bradley County reported a 17 percent jump in building permits to 260, according to The Market Edge.
Gains in Catoosa and Bradley more than balanced out the still-stalled housing markets in Walker County, which shrank by 3.6 percent, and Whitfield County, which contracted at a rate of 24 percent during 2012, the statistics show. Actual decreases in those counties were negligible, resulting in just over a dozen fewer homes being permitted in Whitfield and Walker in 2012 than in 2011.
"I think we're ready to have a light at the end of the tunnel," said builder and developer Dale Mabee. "The Chattanooga area is currently positioned here to see a substantial increase in our growth."
But only if there's enough cleared land on which to build.
"My concern is that we're going to run out of developed lots," said Teresa Groves, executive officer for the Home Builders Association of Greater Chattanooga. "It takes from 18 months to two years to do a development, so we need people to get started."
Tightened regulatory standards have led to a slowdown in both traditional home loans and loans to land developers, she said.
"Hopefully, the banks will start making loans," she said. "There are a lot of good people out there who qualify for homes, but the FDIC is tying their hands."
Some banks may have already gotten that message, said Jay Bell, the most prolific builder in Hamilton County.
"We've started new phases in three neighborhoods," Bell said. "I'm building four new roads when I haven't built a new road in four years."
Now that he's able to persuade bankers to lend him money, the new phases in his Sedman Hills, Stonewall Farms and Belleau Ridge neighborhoods are just the first wave of what he hopes will be new phases in several of his developments.
"The banks are seeing what we're seeing, and that's low inventory," Bell said. "They're loosening up."
But it could still be too soon to pop the cork and declare the crisis over, according to The Associated Press.
While a January survey of builders showed confidence remaining at a seven-year high, some builders are feeling slightly less optimistic about sales prospects through the first half of 2013, said Barry Rutenberg, chairman of the National Association of Home Builders.
"Builders' sentiment remains very close to the index's tipping point of 50, where an equal number of builders view conditions as good and poor, and fundamentals indicate continued momentum in housing this year," Rutenberg said.
"However, persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals and the ongoing stalemate in Washington over critical economic concerns continue to impede the housing recovery."
The Associated Press contributed to this report.