865 Real Estate

East Tennessee Real Estate & Neighborhood Source

East Tennessee and Knoxville Real Estate Market Report: JUNE 2024

By

As the summer heats up, so does the real estate market in East Tennessee and Knoxville. With data gathered through the end of June, we have a comprehensive look at the current trends and what buyers and sellers can expect in the coming months.

East Tennessee Market Overview

Home Sales and Inventory

  • Home Sales: Down 12.5% compared to June 2023.
  • Pending Sales: Up 4.8%.
  • Inventory: Up 40% from last year.
  • New Listings: Increased by 1%.
  • Median Sales Price: Up 8.01%, now at $376,500.
  • Average Price Per Square Foot: $221.

The absorption rate has seen a slight increase to 3.3 months of inventory, indicating a still strong seller’s market. Despite a rise in inventory, prices continue to climb due to sustained demand.

Knoxville Market Dynamics

Sales and Pricing Trends

  • Home Sales: Down 8.4% from last year.
  • Pending Sales: Up 1.3%.
  • Inventory: Up 53.5%.
  • New Listings: Nearly unchanged, down just 0.3%.
  • Median Sales Price: Increased by 3%, now at $408,150.
  • Average Price Per Square Foot: $220.

The absorption rate in Knoxville stands at 1.84 months, still favoring sellers. The Knoxville Market Action Index shows a strong seller’s market, with the city experiencing one of the highest price shifts in the nation since the peak in 2022.

Did you know that Knoxville experienced the largest price increase among the 200 largest metro housing markets in the US since March 2020, with a staggering 73% rise? This unexpected surge highlights Knoxville as a unique hotspot in the national real estate landscape.

Surrounding Counties Snapshot

  • Roane County: Inventory up 70.5%, median price up 19.3% to $340,000.
  • Knox County: Inventory up 56.3%, median price up 2.41% to $399,900.
  • Anderson County: Inventory up 43.8%, median price up 10.34% to $320,000.
  • Loudon County: Inventory up 63%, median price up 4.10% to $510,000.
  • Sevier County: Inventory up 47.5%, median price up 5.52% to $525,750.
  • Blount County: Inventory up 55.4%, median price up 8.84% to $413,500.

Interest Rates and Market Impact

The recent drop in interest rates from over 7% to 6.85% is a significant development. This reduction could stimulate market activity, making it more affordable for buyers and potentially encouraging sellers to list their homes.

Homeowners Insurance Rates

Rising insurance rates are another factor affecting affordability. Tennessee saw an 11% increase in homeowners insurance in 2023, impacting the overall cost of homeownership.

Conclusion

The East Tennessee and Knoxville real estate markets are robust despite fluctuating trends. With rising inventory and stable prices, it’s a promising time for buyers and sellers alike. If you’re considering buying or selling in the area, now is a great time to act.

Contact Us If you have any questions or need assistance with your real estate needs, contact Troy Stavros at Cornerstone Realty Associates in Knoxville. We’re here to help you navigate the market and achieve your real estate goals.

Year Over Year Change in Rent Prices in Tennessee’s Biggest Cities

By

The latest insights from Rentometer.com reveal that the average rent for three-bedroom single-family rentals (SFRs) in Knoxville hit $2,235 in Q3 2023, marking a 3% increase from last year. In contrast, a 3-BR apartment averaged $1,799 during the same period. Notably, Knoxville leads the five largest Tennessee cities with the largest year-over-year rent increase for single-family units!

The trend highlights Knoxville’s growing appeal and rising housing costs, especially when compared to other cities. For instance, renting a single-family home in Nashville used to be 23% more expensive than in Knoxville in Q2 2022; now, that gap has narrowed to 17%. Meanwhile, Chattanooga’s rental prices are now 12% cheaper than Knoxville’s, a notable increase from 7% last year.

U.S. Average 30-Year Mortgage Rates and the Outlook for 2024

By

As a real estate professional, it’s important to understand the dynamics of mortgage rates and their impact on the housing market. This year, we’ve witnessed U.S. mortgage rates soar to their highest since 2001, culminating in a significant quarter-point increase from last year, even jumping over 8% in October. This uptick has directly contributed to one of the lowest home sales records in history, as higher borrowing costs have deterred many potential buyers.

However, there’s a silver lining. The rates have seen a decrease of over one percent from the highs of late October. This downward trend as well as recent news from the Fed indicates a potential easing of mortgage rates in 2024. As rates become more favorable, borrowing becomes less expensive, thus encouraging home buying. This expected shift can revitalize the housing market by increasing demand, stabilizing prices, increasing affordability and encouraging a resurgence in home sales. In essence, while 2023 has been challenging due to high mortgage rates, the anticipated fall in rates in 2024 is likely to bolster the housing market, providing a more favorable environment for buyers and sellers alike.

JUNE 2023 Knoxville Real Estate Market Update: Rising Rents, Home Prices, and Mortgage Rates

By

Welcome to the Knoxville Real Estate Report! In this video, we’ll dive into the latest trends and insights shaping the housing market in our beautiful city.

First, let’s talk about apartment rents. Over the past year, Knoxville has seen a remarkable increase of 9.2% in apartment rents, outpacing the national average growth of 2.3%. This means that finding a place to rent in Knoxville has become more competitive, and prices are on the rise.

In June, the Federal Reserve decided to keep interest rates steady after a string of ten consecutive rate increases. However, officials hinted that future rate hikes may be necessary next month if inflation doesn’t continue to decrease. This decision has implications for the housing market, as higher interest rates can impact the affordability of homes and influence buyer behavior.

Speaking of the housing market, East Tennessee has experienced a notable increase in housing inventory throughout June. However, the number of homes listed for sale remains approximately 60% lower than pre-pandemic levels. This shortage of available homes contributes to the high prices and rents we are currently seeing in the region.

The recently released “The State of the Nation’s Housing 2023” report from the Harvard Joint Center for Housing Studies confirms that home prices and rents remain high in East Tennessee. With higher interest rates locking homeowners in place and slowing construction, the market faces challenges in meeting the demand for affordable housing.

Home sales in Knoxville saw a boost in May, partly due to a temporary decline in mortgage rates the previous month. Buyers in today’s market are highly sensitive to mortgage rates, and their fluctuations can impact home sales in the coming months. Additionally, the lack of inventory and new listings has intensified competition, especially for homes priced under $400,000.

In summary, while market activity has somewhat normalized, the housing market in Knoxville is still far from ordinary. Higher mortgage rates and historically low inventory levels create a dynamic that is unfamiliar territory for many. Although the situation may seem unsustainable, data suggests that these market conditions are likely here to stay.

Looking at housing inventory, we observed a modest increase over the past month, which is typical for this time of year. Active listings in June were up around 20% compared to the previous year. However, inventory levels remain well below pre-pandemic averages across all counties in the East Tennessee region. Although most counties experienced month-over-month increases in inventory, the growth was relatively subdued compared to historical trends.

Now, let’s talk about mortgage rates. Currently, rates are just over one percentage point higher than they were a year ago, resulting in a 20% increase in the required monthly payment for the median-priced listing. These higher rates have led many homeowners to hold off on selling their homes and moving, contributing to the low inventory we’re seeing in the market. As a result, prospective buyers are increasingly turning to the new-home market.

Looking ahead, the outlook for mortgage rates remains uncertain. Despite the Federal Reserve’s decision to pause rate hikes in June, there is a possibility that rates will resume their upward trend in the near future. With inflation still above the Fed’s target, it’s likely that rate increases will be on the horizon. As a result, mortgage rates are expected to hover around 6.5% throughout the summer months.

In Knoxville, only a small percentage of homes listed for sale have a lower estimated monthly payment compared to a year ago. This indicates that while home price growth has slowed, it remains positive, and lower monthly payments are limited to a few listings at the top end of the market. That wraps up our Knoxville Real Estate Report. Stay tuned for more updates on the local housing market. If you found this information valuable, be sure to like this video and subscribe to our channel for future updates. Thanks for watching!

Have questions? Need a market analysis on a particular part of town or home? Need help buying or selling a home in East Tennessee? Contact Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!

It Pays Off to Sell in Knoxville with a Real Estate Agent [INFOGRAPHIC]

By

It Pays to Sell with a Real Estate Agent [INFOGRAPHIC] | MyKCM

Some Highlights

  • Today, it’s more important than ever to have an expert you trust to guide you as you sell your house in Knoxville.
  • From your safety throughout the process to the complexity of negotiating the deal, you need a professional on your side.
  • Before you decide to take on the challenge of selling your house in Knoxville on your own, let’s connect to discuss your options.

Call/Text me, Troy Stavros with CornerStone Realty Associates today at 865-999-0925 today!

Real Estate Is One of the Top Driving Forces in the Economy

By

As the economy recovers from this year’s health crisis, the housing market is playing a leading role in the turnaround. It’s safe to say that what we call “home” is taking on a new meaning, causing many of us to consider buying or selling in Knoxville sooner rather than later. Housing, therefore, has thrived in an otherwise down year.

Today’s high buyer demand in Knoxville combined with low housing inventory means we’re seeing home prices appreciate at an above-average pace. This demand is being driven by those who want to take advantage of historically low mortgage rates. According to Freddie Mac:

“The record low mortgage rate environment is providing tangible support to the economy at a critical time, as housing continues to propel growth.”

These factors are driving a positive impact on the economy as a whole. According to the National Association of Realtors (NAR), the real estate industry provided $3.7 billion dollars of economic impact to the country last year. To break it down, in 2019, the average newly constructed home contributed just over $88,000 per build to local economies. Across the country, real estate clearly makes a significant impact (See map below):Real Estate Is a Driving Force in the Economy | MyKCMIn addition, last week, the Bureau of Economic Analysis announced the U.S. Gross Domestic Product increased at an annual rate of 33.1% in the 3rd quarter of this year, after decreasing by 31.4% in the second quarter. There’s no doubt the growing economy is being fueled in part by the soaring housing market. Experts forecast this housing growth to carry into 2021, continuing to make a big impact on the economy next year as well.

Bottom Line

The American Dream of homeownership has continued to thrive in the midst of this year’s economic downturn, and “home” has taken on a new meaning for many of us during this time.  Best of all, the housing market is making a significant impact as the economy recovers.

Have questions or thinking about buying or selling a home? Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!

Real Estate Is a Driving Force in the Economy | MyKCM