According to the National Association of REALTORS, the national median home price saw the strongest year-over-year increase in seven years as a growing number of metropolitan areas posted higher median values in the fourth quarter of 2012.
What are the factors causing the price increases of today’s real estate in Knoxville and beyond?
1) Attractive affordability conditions:
- Mortgage interest rates are hovering near record lows.
- Quoting NAR President Gary Thomas, “In reality, home prices overcorrected on the downside and homes in most of the country were selling for less than replacement construction costs, which means they were undervalued.”
- Lawrence Yun, Chief Ecomomist for NAR stated, “The housing affordability index shows that the national median income of families was almost double the income needed to buy a median-priced home in 2012, so most buyers are able to stay well within their means.”
2) Decreasing rent affordability (rising rent prices)
3) Demand for housing:
- The population has been growing faster than overall inventory of Knoxville homes for sale.
- Unsold inventory, nationally, is at the lowest level in 12 years.
4) Job creation:
- Steady job creation leads to more buyers in the real estate market.
Troy Stavros, Broker and Partner with the 865 Real Estate team at Gables & Gates, REALTORS says, “These factors have not only increased the value of Knoxville real estate but have turned what was a buyer’s market no so long ago, into a seller’s market.”