The upbeat tones of Elvis Presley's "A Little Less Conversation" fade into "Walking on Sunshine" by Katrina and the Waves as real estate agents flood to their seats for the company's annual kickoff meeting.
In spite of the cheery music, the Crye-Leike agents are subdued inside the Chattanooga Golf and Country Club. There are more empty seats than last year.
They've waited since 2007 for the market to hit bottom, endured promises from politicians that their problems were over, but new data shows that 2011 home sales dipped to levels not seen since 2002, according to the Greater Chattanooga Association of Realtors.
"It's been a tough year for a lot of folks," said Dan Griess, Chattanooga general manager for Crye-Leike. "We've been in one of the most challenging markets we've had in a long time."
The hope of the new year bringing a brighter future to the beleaguered industry could depend on which way the wind blows next month because buyers often make the critical decisions about house-hunting based on how nice it is outside.
The winds, however, have not been kind over the last several years.
Crye-Leike, which claims to sell more housing units locally than any other group, shed 700 jobs in the Southeast and closed 20 offices to cut costs during the recession.
National studies show the local Realtors' hardship is echoed across the country.
As many as 3.6 million homeowners nationwide were late on their loan payments in 2011, forming a "shadow inventory" of potential foreclosures that threaten to further drive down home prices if they flood the market, according to the National Association of Realtors.
"Banks are slow-walking these foreclosures, but we're better off getting it over with than having it hung over our head," said Harold Crye, CEO of Crye-Leike.
Foreclosures hit the South hardest of all, with more than 836,000 loans in foreclosure last year, the association reported. The foreclosed homes, which continue to make up about one-third of all home sales locally, are also silencing builders' hammers, with new home starts plummeting in 2011 to a trough not seen since President Bill Clinton first took office in 1993.
But relief could be on the horizon, Crye said.
Sales volume jumped 10 percent in November and December, which could be enough to get things moving again, he told Chattanooga Realtors.
"We're seeing a fourth-quarter surge," he said. "It's a glimmer of light at the end of the tunnel."
The company founder believes that 2012 could be the year the market rebounds, especially if the inventory of homes continues to fall and developers build new subdivisions to meet demand.
"If sales are going the way I think they're going to go, the markets are going to stabilize," he said. "We're already starting to see that."
Realtor Andy Hodes of Keller Williams said the inventory of unsold homes in the Chattanooga area fell dramatically in 2011, to about 4,400 in January compared to about 6,000 in January 2010.
"If those homes sell, we'll need to get more inventory," he said, but wouldn't speculate beyond a guess that sales will remain steady.
"And steady is a win," he said.
Interest rates, meanwhile, are near record lows -- about 4.046 percent for a 30-year fixed mortgage, according to Informa Research Services -- but they could go up if demand for housing suddenly rises, Crye believes.
"The theme we've to talk about for 2012 is never give up," he said.
No matter what the market does, there's never been a better time to buy, he said.
"Once it turns, it's going to turn with a vengeance," Crye said.
In the meantime, the company has moved into new markets in response to consumers' newfound appetite for rental property, which jumped 3.8 percent in price in the Chattanooga area in 2011.
Crye said a goal for 2012 is to move into property management, which is becoming a profitable way to deal with homes that won't sell.
That's how Ramesh Jolam, general manager of the Mexican restaurant Abuelos, decided to deal with his house when no buyers picked it up after several months.
"We had people come and look at it, but after a while we figured out we'd just lease it, live in an apartment for a while and save up some money," he said. "At this rate, if I lease it out for two more years, I'll make enough money and just buy another house."
Property management companies make a percentage of rent by managing leased homes for property owners who don't have time to work directly with tenants. That goes against the grain for Realtors used to making big deals for big bucks, Crye acknowledged, but it's a growing segment that yields a more stable stream of cash.
"It you have $1,000 in rent and you get 100 bucks every month, that's not much, but if you've got 200 properties paying $1,000, you're doing all right," he said.