Chattanooga’s lake real estate market is carving out a bigger slice of Tennessee’s booming waterfront economy.
The Fall 2025 Lake Real Estate Market Report from Lake Homes Realty finds the statewide market for lakefront homes and land has climbed to an estimated $3.8 billion, a gain of $400 million since summer.
While much of that growth has been concentrated around Nashville and Knoxville, Chattanooga-area lakes – including Chickamauga, Nickajack and parts of Watts Bar – are increasingly attracting buyers seeking affordability, recreation and quality of life.
Among the Chattanooga region’s lakes, Chickamauga has emerged as the clear leader. While it trails Nashville’s Old Hickory Lake in overall market size, the report identifies Chickamauga as one of Tennessee’s five most active lakes this season.
The 36,000-acre reservoir, fed by the Tennessee River, has become a magnet for both local buyers and out-of-state newcomers drawn to its nationally recognized bass fishing, boating access and relatively affordable price points compared to Middle Tennessee’s more expensive waterfront markets.
Nickajack Lake, which stretches into Marion County southwest of the city, also is gaining attention. Known for its dramatic mountain views and easy access from Interstate 24, Nickajack has become a popular choice for retirees and second-home buyers looking for quieter surroundings.
Watts Bar Lake, located northwest of Chattanooga, has likewise drawn interest from buyers seeking larger lots and more private shorelines. Although these markets do not yet generate the listing volume of Chickamauga or Old Hickory, Lake Homes Realty’s report notes that their growth rates are proportionally significant, particularly as buyers priced out of Middle Tennessee increasingly look to the Chattanooga region.
Statewide, Old Hickory Lake remains Tennessee’s largest lakefront market, topping the rankings for overall market value, home listings and land inventory. The lake’s dominance reflects its proximity to Nashville and its concentration of luxury developments, which continue to attract high-end buyers.
Lakes like Norris and Tellico, both near Knoxville, also rank among the state’s most competitive markets, with Norris drawing interest from buyers seeking acreage and vacation retreats, and Tellico commanding some of Tennessee’s highest average listing prices due to its limited inventory and reputation as a luxury destination.
Even as Chattanooga’s share of Tennessee’s lakefront market expands, buyers remain cautious. According to the report, more than half of all lake home purchases statewide – including those on Chickamauga and Nickajack – are made in cash, insulating the market from the impact of higher mortgage rates. Yet price sensitivity remains high and many buyers are unwilling to compete for properties they consider overpriced.
Lake Homes Realty CEO Glenn Phillips said seller expectations are finally beginning to adjust to this reality.
“Some sellers are finally accepting what the market has been telling them for months,” Phillips wrote in his commentary on the report. “Accept reality and price for the current market, not the prior market.”
That shift is particularly important in Chattanooga’s mid-range and luxury segments, where homes above $1 million on Chickamauga and Nickajack are lingering on the market longer than expected, while well-priced properties below $700,000 are often drawing multiple offers within days.
The Fall 2025 report also points to signs of a modest but meaningful rebound after two years of stagnation in lakefront property sales statewide. Following what Lake Homes Realty described as the weakest year for U.S. residential real estate in nearly three decades, the last three months have seen an increase in closed transactions.
Chickamauga Lake’s market reflects this trend, with more mid-range properties selling this summer than during either of the previous two quarters.
“These changes are the beginning,” Phillips wrote. “The last months of 2025 will show improvement over the last 18 months. Not a boom – but motion.”
That cautious optimism is echoed across the Chattanooga area, where buyers are returning but doing so deliberately. Realtors report that demand is strongest among local residents seeking to upsize or relocate closer to the water, as well as among out-of-state newcomers attracted by the city’s affordability and lifestyle.
LakeHomes.com’s website analytics show significant search traffic from Georgia, Florida, Illinois and Texas, mirroring broader migration patterns into Southeast Tennessee.
Challenges ahead
Despite the market’s overall strength, the report highlights several challenges. Limited land inventory continues to constrain Chattanooga’s growth potential, particularly along Chickamauga and Nickajack. Few small-lot parcels under 10 acres met Lake Homes Realty’s statewide reporting threshold this quarter, and the report notes that transaction-level sold data for many Chattanooga-area lakes remains incomplete, making it difficult to benchmark pricing against larger statewide markets.
Phillips acknowledged that data limitations are still an issue but said the firm expects broader MLS integration by early 2026, which should provide a clearer picture of local price trends and absorption rates.
Even with reporting gaps, the Chattanooga region’s trajectory is clear. Chickamauga’s growing profile has elevated it into Tennessee’s top five lakefront markets, putting it in the same statewide conversation as Tellico and Norris. Nickajack and Watts Bar, meanwhile, are emerging alternatives for retirees, remote workers and second-home buyers seeking quieter, more scenic settings.
Phillips says Chattanooga’s rising visibility reflects a broader shift toward smaller, recreation-driven metros.
“Lake homebuyer enthusiasm appears to be returning,” he wrote, “though buyers still refuse to overpay.”
For sellers, that means pricing competitively will be key heading into 2026. For buyers, Chattanooga’s lakes continue to represent value relative to other parts of the state, offering a mix of lifestyle and affordability that’s increasingly difficult to find elsewhere in Tennessee.
As Tennessee’s overall lakefront market pushes toward the $4 billion mark, Chattanooga’s growing share signals the region’s transformation from a secondary player into a destination market in its own right.
For now, Chickamauga remains the centerpiece of that growth, but Nickajack and Watts Bar are not far behind. If migration trends hold and inventory continues to rise, Chattanooga’s lakes might soon compete head-to-head with some of the state’s largest and most established waterfront communities.