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East Tennessee Real Estate & Neighborhood Source

Knoxville Real Estate Outlook: Navigating the 2024 Market for Homeowners, Buyers, and Sellers (DECEMBER 2023 UPDATE)

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1. Understanding the 2024 Housing Market: A Turning Point for Knoxville Home Buyers

Recent findings have highlighted a pivotal shift in the housing market, particularly relevant for those in Knoxville, Tennessee. While 2023 saw a daunting surge in U.S. mortgage rates, peaking since 2001 and even surpassing 8% in October, there’s now a glimmer of hope for 2024. This spike in rates led to one of the lowest home sales records in recent history, primarily due to the inflated borrowing costs dissuading potential buyers.

However, as we look towards 2024, a silver lining emerges. The latter part of 2023 experienced a significant drop in mortgage rates, over one percent from the October highs. This decline, coupled with recent Federal Reserve announcements, signals a probable easing of mortgage rates in 2024. As borrowing costs decrease, the barriers to home buying diminish, heralding a potential rejuvenation of the housing market. This anticipated change is set to bolster demand, stabilize prices, enhance affordability, and stimulate home sales. For Knoxville residents, this means 2024 could offer a more favorable landscape for both buying and selling properties.

2. Tennessee’s Real Estate Boom: Knoxville Leading the Charge

According to the U-Haul Report, Tennessee has emerged as one of the top growth states in the U.S., climbing to the 5th position in 2023 from its previous 6th rank. This upward trend reflects the state’s increasing allure, particularly significant for those eyeing real estate prospects in Tennessee. U-Haul’s analysis, based on over 2.5 million one-way rentals, offers insight into the attractiveness of states and cities for new residents.

Knoxville, Tennessee, stands out in these rankings, leading the state and placing 17th nationally. Additionally, other Tennessee cities like Murfreesboro and Clarksville have shown commendable performance. These rankings underscore Tennessee, especially Knoxville, as an increasingly popular destination, which could profoundly impact the local real estate market dynamics for homeowners, buyers, and sellers.

3. Knoxville’s Rental Market: A Comparative Analysis The latest data from Rentometer.com indicates a significant trend in Knoxville’s rental market. The average rent for three-bedroom single-family rentals (SFRs) in Knoxville reached $2,235 in Q3 2023, marking a 3% increase from the previous year. In comparison, the average rent for a 3-BR apartment stood at $1,799 during the same period.

This trend not only highlights Knoxville’s escalating appeal but also points to rising housing costs, especially when compared to other major Tennessee cities. For instance, renting a single-family home in Nashville, which was previously 23% more expensive than in Knoxville, now sees a narrowed gap of 17%. Similarly, Chattanooga’s rental prices are currently 12% less than Knoxville’s, a noteworthy shift from last year. This data is crucial for those considering the Knoxville real estate market, whether for investment or residence, indicating a dynamic and evolving landscape.

Have questions? Want to discuss your specific real estate needs and goals. Contact me, Troy Stavros with CornerStone Realty Associates in Farragut at 865-999-0925 today. I look forward to talking with you!

Despite higher interest rates data shows buyer activity is UP!

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Are you a homeowner considering selling your house? Wondering if it’s the right time? Well, here’s some good news: despite higher mortgage rates, buyer traffic is on the rise.

Recent data from the ShowingTime Showing Index, which measures buyers actively touring homes, reveals a significant increase in buyer demand over the past few months. Even during the colder months, the limited number of homes for sale kept shoppers on the lookout.

To put things into perspective, let’s compare this February’s foot traffic with the traffic from the past six years. This February showcased one of the strongest buyer activities we’ve seen in recent memory, excluding the highly unusual years of 2021 and 2022. When compared to the more normal, pre-pandemic years, the data clearly indicates a rise in buyer activity.

What’s even more impressive is that this increase in buyer traffic occurred despite the rise in mortgage rates this February. The Freddie Mac 30-year fixed mortgage rate climbed from 6.09% to 6.50%. However, it didn’t deter more buyers from searching for their dream homes.

According to Jeff Tucker, Senior Economist at Zillow, this upward trend in buyer activity may continue. Typically, March and April experience a seasonal uptick in home shoppers.

If you’re looking to sell your house, this year’s active buyer market should be encouraging news. It’s a clear indication that potential buyers are out there, possibly searching for a home just like yours. By partnering with a real estate professional and listing your house now, you can put your home in front of eager buyers today.

In conclusion, the rising foot traffic in this year’s housing market is a positive sign that buyers are actively looking to purchase homes, even in the face of higher mortgage rates. If you’re ready to sell, let’s connect and make the most of this opportune time.

Have questions? Want to talk about buying or selling a home? Contact Troy Stavros with CornerStone Realty Associates today at 865-999-0925. My team and I are here to serve you!

MARCH 2023 East Tennessee & Knoxville Housing Market Update

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Knoxville Real Estate Market Shows Signs of Growing Beyond Its Affordable Reputation

The Knoxville real estate market has always been known for its affordability, but new data shows that the city’s median listing price is now higher than the national average. This suggests that the competitive advantage of Knoxville’s affordability may be slipping away, making it more challenging for homebuyers to find homes within their budget. In the fourth quarter of 2022, the median listing price in the Knoxville area was $426,633, compared to $412,743 nationally. By February 2023, the local median listing price had increased by more than $42,000 compared to the U.S. average, making Knoxville the 47th-highest among the top 150 U.S. housing markets. One of the significant issues contributing to the shortage of inventory is that fewer people are moving. Life event movers, who typically move up or down in the housing market, are staying in their homes longer, creating a “mortgage lock-in” group. With over 60% of outstanding residential mortgages in Tennessee having an interest rate of 4% or below, potential sellers are hesitant to list their homes for sale, given the prospect of trading out their current mortgage for a new one with a much higher interest rate. This has led to fewer homeowners putting their homes on the market, particularly those priced under $500,000, where new listings are down 19% year-over-year.

Additionally, some homeowners who have to move are opting to keep their existing house with their sub-3% mortgage, rent it out, and buy a new home without selling their current one, which further exacerbates the inventory problem.

Investors represent another group that has not contributed much to the inventory. While institutional investors with Wall Street money have slowed their purchasing, none of them are selling, creating no discernible inventory coming from investors at this time.

Distressed homeowners represent the third potential source of inventory, but as of now, essentially none of these people are selling homes either. With the US still having record employment and the big layoffs in the tech sector generally finding work quickly, there are no indications of this group selling homes at this time.

According to experts, homeowners in Knoxville can see that they have a really good deal where they currently live. Therefore, unless something dramatically changes, the current environment is expected to remain.

The Knoxville real estate market’s challenges are not just about inventory, however. Tennessee’s population surpassed seven million residents in 2022, marking the largest year-over-year population increase since 2007, according to the Tennessee State Data Center. This growth is driving up rent prices, with Knoxville experiencing the second-fastest rent growth of any US metro area in 2022, according to a report from the National Association of Realtors®.

As Knoxville continues to grow, it will be essential to address the inventory shortage and affordability issues to ensure that the city remains an attractive place to live for both current residents and newcomers.

Have questions? Comments? Want to talk about the market? Want to talk about buying or selling a home in East Tennessee? Contact Troy Stavros at CornerStone Realty Associates today at 865-999-0925. My team and I look forward to serving you!

Why A Smaller Home in East Tennessee May Be The Best Fit

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When it comes to buying a home in East Tennessee, bigger isn’t always better. In fact, there are many advantages to purchasing a smaller home that can make it a wise financial decision.One of the most significant benefits of buying a smaller home is the cost savings. Smaller homes in Knoxville generally have lower utility costs, lower property taxes, and a smaller mortgage payment. This means you can save money on your monthly housing expenses and have more money to allocate towards other areas of your life, such as saving for retirement or investing in your education.

Smaller homes in East Tennessee are also easier to maintain. With less square footage, you’ll spend less time cleaning and maintaining your home, leaving you with more time to focus on the things you enjoy. This can also save you money on maintenance and repair costs, as there are fewer areas of the home to upkeep.

Another advantage of purchasing a smaller home in Knoxville is the potential for a more sustainable lifestyle. With less space, you’ll be more mindful of your consumption and will likely accumulate less clutter over time. This can lead to a more simplified and intentional way of living, which can be both rewarding and fulfilling.

Finally, a smaller home can offer a sense of coziness and comfort that larger homes may lack. With fewer rooms and less space to spread out, you’ll likely spend more time in the shared spaces of your home, which can foster a sense of community and togetherness among family members.

Overall, buying a smaller home in East Tennessee can be a smart financial decision with a host of additional benefits. If you’re in the market for a new home, consider the advantages of a smaller living space and weigh your options accordingly.

Have questions? Want to get the process started in looking for a smaller home? Need to sell your current home before buying? Contact the Troy Stavros TEAM at CornerStone Realty Associates today at 865-999-0925.

Almost Half of the Homes Sold in Farragut in March were CASH or At or Above List Price!

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Almost 1/2 (45%) of the homes sold so far in March in Farragut have been for cash or at/above their listing price (some both). We saw some sell for over $100K above their list price! I go over these sales in the video along with the breakdown of the sold prices and subdivisions. Lack of inventory and consistent demand is still pushing prices higher both in Farragut and most of East Tennessee. Don’t believe what you are hearing on the national news. For example, the national news reported that data through the end of February showed the first Year over Year reduction in the median sales price of homes nationally. However, in Knoxville, we saw a $30,000 increase in the median sales price compared to the end of February last year. Always remember, real estate is LOCAL and sometimes HYPER-LOCAL.

Have questions? Wondering what your home might be worth in today’s market? Contact the Troy Stavros TEAM with CornerStone Realty Associates today at 865-999-0925. We look forward to serving you!

2023 National Housing Market Forecast

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2023 Housing Market Forecast [INFOGRAPHIC] | MyKCM

Some Highlights

  • From home sales to prices, the 2023 housing market will be defined by mortgage rates. And where rates go depends on what happens with inflation.
  • If you’re thinking of buying or selling a home this year, let’s connect so you understand where the housing market is headed in 2023.

Contact the Troy Stavros TEAM at CornerStone Realty Associates at 865-999-0925 today.