Construction workers build the frame of a new home in North Chattanooga.
The number of home starts in the region are down.Chattanooga’s economic recovery is at a crossroads.
On one hand, home prices are rising and thousands more jobs are on their way to this area courtesy of an assembly line extension at the city’s Volkswagen plant.
But the underlying economy is bucking the hype, and in the case of the housing market the trend line is headed in the wrong direction.
“We’re just down for some reason; there’s no easy way to explain it,” said Jay Bell, one of the city’s most prolific developers.
Housing isn’t the only sector to struggle. Unemployment in Chattanooga rose to 7.7 percent in July, compared to a 6.2 percent national average that month, according to the Bureau of Labor Statistics. Chattanooga’s new car registrations in August fell half of a percent over the year before to 1,025, even as sales are up 5 percent nationwide for 2014.