Just over one year after Mark Spain Real Estate crossed the border into Chattanooga, the regional homes sales juggernaut is preparing to beat a hasty retreat back to Atlanta, say several of its agents.
Mark Spain officially opened its Chattanooga office May 16, 2022, and promptly mounted an armada of billboards across the city. The firm’s expansion came on the heels of its $1.9 billion sales jump in 2021, when it sold $3.3 billion worth of real estate in nine markets spanning the southeastern U.S.
The pervasive billboards sported a simple, succinct message designed to disrupt the Chattanooga real estate market: “Get a guaranteed offer on your home.”
Derek English, who served as last year’s president of Greater Chattanooga Realtors, noted in a column the Hamilton County Herald published in April 2022 that the median sales price of a home in the city had surpassed $300,000 as a result of increased construction costs and a tighter inventory, among other factors.
Given this, Spain’s missive seemed designed to stimulate activity for his company as home sales across the nation dipped (7.2% over a six-month period, reported English), mortgage rates surged (to 4.6%) and an increasing number of would-be buyers turned to the rental market.
However, one of Spain’s agents in Chattanooga says the one-two punch of the firm’s pricy advertising campaign and the bump in the median sales price of local homes might have knocked it out of the market.
“The numbers didn’t work,” Realtor James Batten says. “This was a business decision they had to make.”
Steven Sharpe, the 2023 president of the local Realtor association, says real estate brokerages in Chattanooga in general are facing several challenges, although he says he’s unable to verify if any of them were a factor in convincing Mark Spain to abandon ship.
One of these challenges involves basic mathematics: The number of Realtors operating in the greater Chattanooga area exceeds the number of listings by nearly two to one, Sharpe notes.
“We’re pushing 3,000 members at Greater Chattanooga Realtors, and when you have 3,000 agents competing in the same small circle in which the daily inventory is around 1,500 to 1,600 houses, that’s two agents for every available listing. So, our biggest challenge as brokers is motivating our agents to find listings.”
The careers page on the Mark Spain website (markspain.com) states the company provides booked appointments monthly, eliminating the need for cold calls and third-party leads. It also offers training and education.
One local Spain agent who obtained her Realtor license in January says listings were plentiful and the training the company provided was beneficial. “I’ve sold several houses this year and was able to plant my feet in a competitive business,” says Marlene Case by phone. “The repetition helped, and I gained confidence.”
Another local Spain Realtor, Chris Roberts, says several agents at the office “were making six figures,” suggesting certain real estate practitioners did achieve a measure of success with the company.
Still, Sharpe says Spain’s promise of a guaranteed offer was nothing unique in Chattanooga, as other companies and agents have offered a similar service, and the company might not have disrupted the Chattanooga market to the degree it was hoping it would.
“No one has done an ad spend like Mark Spain’s,” Sharpe says. “That’s how he operates. Every market he’s walked into, he’s done the same thing. And he’s been very successful in Birmingham, Nashville and Atlanta, where home prices have been much higher than ours.
“So, he came in with overwhelming force thinking he could displace everybody, but our agents held strong. I believe that was due to the local market rejecting his motto. We know of individuals who listed with him because of his promises, but those programs were not unique to him. Other agents were doing the same things, and I believe a lot of people turned to them instead.”
One local Realtor who shares Spain’s first name took the out-of-towner head on when the ubiquitous billboards began causing confusion about which Mark lived in and personally sold real estate in Chattanooga.
Mark Hite of Real Estate Partners essentially changed his professional persona to “Local Mark” – a designation he featured in large, bright letters at the top of his billboards. He also declared his ability to make a guaranteed offer on a home.
“I believe this community still values people who live locally, work locally and contribute to the community,” Hite said at the time.
Like Sharpe, Hite can only guess at the impact of his marketing parry. But as Spain prepares to shutter his office in the Tallan Financial Center downtown this fall and focus his efforts elsewhere, Hite is going to continue to use the “Local Mark” moniker – as opposed to going back to being “Plain Old Mark,” he laughs.
Having been notified of Mark Spain’s plans to withdraw from Chattanooga, the company’s local agents are looking for new homes for their licenses. Batten intends to move to Atlanta, where he says he’ll continue to operate as member of Spain’s team.
“It’s an innovative company that offers incredible support to its agents,” Batten says. “Given the number of leads they provide me, moving makes sense. Plus, I have family there, and the family I have here will still be close.”
Case says she’s switching to a much smaller operation – Fort Oglethorpe-based Dixon Homes Realty – where she expects to further her knowledge of real estate under its owner and managing broker, Bob Dixon.
Roberts originally cast himself as the one who would turn out the lights in Spain’s office after the cleaning crew left for the last time, but has since decided to move to Realty ONE Group Experts, a “lifestyle-driven real estate brand” (www.facebook.com/RealtyONEGroupExperts) that’s declaring itself to be “Cleveland and Chattanooga’s first #Unbrokerage.”
“The vibe seems to be a perfect fit my personality,” Roberts says by text. “It’s exciting.”
Spain entered the Chattanooga market optimistically, with his president and CEO John Makarewicz saying via press release what most locals already knew: “Chattanooga is in a state with no personal income tax ... (and) has the second-lowest property tax of all 50 states, and the city’s cost of living is 8% below the national average. The variety of things to do here and ... (the ability) to easily connect with nature are also big attractions for residents.
“We’re excited about becoming a part of the greater Chattanooga community and serving families in accomplishing their real estate goals.”
Spain might not have gained enough traction to remain in the city, but there’s no reason for local Realtors to hear a foreboding note in this departure, says Sharpe. Rather, there are plenty of reasons for agents to remain optimistic.
“In general, the market is still strong. It’s not as strong as it has been historically, but we’re still selling higher value homes, the number of days-on-market is still low, and there are homes out there that are attractively priced, in a good location and being sold.
“We’ve seen a slowdown overall because of the rise in interest rates, but many of the people who are relocating to Chattanooga are coming from locations where they sold a house in an area with a high cost of living, and they don’t care what the rate is because they’re paying cash.”
In other words, Spain’s billboards might be coming down, but there are still reasons for Realtors to be looking up.