The East Tennessee real estate market is sending a clear signal: the frenetic, seller-dominated era is over. After years of intense competition, the data through May 2025 reveals a decisive shift towards a more balanced, traditional, and strategic market. For buyers, this means more options and renewed negotiating power. For sellers, it demands a new approach to pricing and presentation.
In our latest update, Troy Stavros of Cornerstone Realty Associates breaks down the critical numbers, trends, and forecasts for both the broader East Tennessee region and the Knoxville metropolitan hub. Here’s what you need to know.
The Big Picture: A Unified Shift to a Balanced Market
Across the region, the story is consistent. A surge in housing inventory, a slower sales pace, and moderating price growth have collectively tipped the scales. While the direction is the same, the velocity of this change differs, with the Knoxville market experiencing a more rapid and dramatic cooling-off period than its surrounding areas.
East Tennessee Housing Market: The Regional View (May 2025)
Looking at the entire East Tennessee area, the move towards balance is clear when comparing year-over-year data from May 2024 to May 2025:
- Home Sales: Down 10.3%
- Inventory of Homes: Up a significant 38.2%
- Pending Sales: Up 13.9%
- New Listings: Up 9.6%
- Median Sales Price: Rose a modest 2.14% to $372,825
- Absorption Rate: Increased to 4.43 months of inventory, placing the region firmly in a balanced market (traditionally 4-6 months).
A Closer Look: The Knoxville, TN Market (May 2025)
For properties with a Knoxville address, the trends are even more pronounced, signaling a faster correction:
- Home Sales: Down 10.8%
- Inventory of Homes: Skyrocketed by 57.5%
- Pending Sales: Up 13.6%
- New Listings: Up 11.8%
- Median Sales Price: Rose 2.07% to $407,500
- Absorption Rate: Increased to 2.63 months of inventory. While technically still a seller’s market, it’s heading towards balance at a much faster speed.
Knoxville vs. East Tennessee: A Tale of Two Markets
While both markets are cooling, Knoxville is doing so more dramatically.
- Pace of Slowdown: Knoxville’s absorption rate grew by 51.15% year-over-year, far outpacing the regional increase of 35.89%. This shows the gap between inventory and sales is widening much more quickly in the city.
- Days on Market: The median days on market in Knoxville surged by 71.43% (from 7 to 12 days), while the regional median saw a more moderate increase of 42.86% (from 14 to 20 days).
- Seller Adjustments: Sellers in Knoxville are reacting more aggressively. The median list price in Knoxville fell by 5.37%, a much steeper drop than the regional decline of 0.69%, signaling intense competition.
Key Advice for Sellers in Today’s Market
The market no longer guarantees a quick, above-asking-price sale. Strategy and realism are your keys to success.
- Price Aggressively & Accurately: This is the single most important factor. With a 5.37% drop in the median list price in Knoxville, you are competing against sellers who are already adjusting downward. Price your home correctly from day one to avoid languishing on the market.
- Invest in Presentation: With surging inventory, your home must stand out. Professional photography, decluttering, and ensuring your home is in pristine, move-in-ready condition are no longer optional—they are essential.
- Be Patient & Prepared to Negotiate: The days of reviewing multiple offers in a single weekend are fading. Expect an average market time of around 60 days in the broader region. Be prepared for a sale to take weeks, not days, and expect to negotiate on price and terms.
A Window of Opportunity: Key Advice for Buyers
This is the most advantageous market for buyers in several years. You are in a position of strength.
- Take Your Time & Explore Options: The fear of missing out (FOMO) has subsided. The significant increase in inventory means you can be more deliberate, compare properties thoroughly, and avoid rushed decisions.
- Exercise Your Negotiating Power: The data confirms that sellers are more flexible. Don’t hesitate to submit offers below the list price and include important contingencies for inspections and financing. Pay close attention to a property’s “days on market”—a higher number often indicates a more motivated seller.
- Don’t Mistake a Balancing Market for a Crashing One: Prices are not in a freefall; they are still appreciating modestly. Waiting on the sidelines for a major price crash is a risky strategy that may not pay off. The real opportunity is the combination of more choice and reduced competition.
Looking Ahead: 6-Month Real Estate Forecast (June-December 2025)
The market normalization seen through May is expected to continue and solidify over the next six months.
- Inventory Will Continue to Rise: Driven by new listings and longer selling times.
- Price Growth Will Decelerate: Projections suggest modest annual price growth in the low single digits (2-3%).
- Seller Concessions Will Become Commonplace: Expect to see more sellers offering to cover closing costs or reducing their asking price.
- Mortgage Rates Remain the Biggest Variable: Most forecasts predict rates will hover in the mid-to-high 6% range. Any stabilization will help the market, but the era of ultra-low rates is firmly in the past.
Have Questions About Your Specific Situation?
Whether you’re considering selling your property or looking to buy a home in East Tennessee, navigating this shifting market requires expert guidance. Understanding the nuances of a specific neighborhood or price point is key to making a successful move.
If you have questions about this data or want to discuss your specific real estate goals, don’t hesitate to reach out.
This market update was provided by Troy Stavros with Cornerstone Realty Associates. For a personal consultation, please find our contact information below.
Contact me at 865-999-0925 or email Troy@865realestate.com
