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East Tennessee and Knoxville Real Estate Market Report: JUNE 2024

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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.

KNOXVILLE HAS SEEN A 114% INCREASE IN THE INCOME NEEDED TO AFFORD A MEDIAN-PRICED HOME SINCE 2020

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In the wake of Knoxville’s evolving real estate landscape, both buyers and sellers are finding themselves at a critical juncture. The city, renowned for its vibrant culture and scenic beauty, has recently witnessed a significant shift in the housing market, a development that merits a closer examination.

A Staggering Increase: The Financial Implications

Recent data reveals a startling 114% increase in the income required to purchase a median-priced home in Knoxville. This uptick is a reflection of broader national trends, where the confluence of rising interest rates and a surge in home prices during the pandemic era has markedly deteriorated housing affordability. With interest rates leaping over the 4-year span and median home prices soaring, the financial landscape for potential homebuyers has been profoundly altered.

Knoxville’s Housing Market at a Glance

As of 2024, to afford a home in Knoxville, one now needs an income substantially higher than the national median. This requirement underscores the challenges many face in stepping onto the property ladder. The city, ranked among the top 100 in size across the United States, has seen its median income growth not keeping pace with the ballooning income needed for home acquisition, despite a notable influx of higher-earning individuals relocating to the area, potentially skewing income data.

Looking Ahead: Prospects for Prospective Homeowners

Despite the daunting figures, there’s a glimmer of hope. The anticipation of a decrease in interest rates could ease the path to homeownership, making Knoxville’s real estate market more accessible. This potential shift brings a ray of optimism, suggesting that the dream of owning a home in Knoxville could become more attainable for many.

Engaging with Knoxville: A Call to Action

For those looking to buy or sell real estate in Knoxville, understanding these market dynamics is crucial. Whether you’re a long-time resident or considering making Knoxville your new home, staying informed and seeking expert advice can navigate this challenging market.

As Knoxville continues to evolve, its real estate market remains a vibrant, albeit complex, landscape. By arming ourselves with knowledge and engaging with professionals, we can better understand and adapt to these changes, ensuring that the dream of homeownership in Knoxville remains within reach.

Have questions? Ready to navigate Knoxville’s vibrant real estate market with an expert by your side? Contact Troy Stavros with CornerStone Realty Associates at 865-999-0925 today. Whether you’re buying, selling, or just exploring your options, Troy’s deep market knowledge and personalized approach will guide you every step of the way. Don’t miss out on your opportunity to thrive in Knoxville’s dynamic housing landscape. Call now!

East Tennessee Real Estate: A Dynamic Housing Market in 2023 and Beyond – NOVEMBER 2023 UPDATE

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Knoxville Real Estate Trends: A Thriving Market in East Tennessee

East Tennessee’s real estate market, particularly in Knoxville, has demonstrated remarkable resilience and growth in recent times. In Q3 2023, Knoxville’s home price growth ranked an impressive No. 4 among the top 100 metro areas. This surge reflects a significant 11.6% increase from the previous year, as reported by the Federal Housing Finance Agency (FHFA). Such robust growth showcases Knoxville’s burgeoning appeal in the East Tennessee real estate landscape.

Anticipating 2024: Knoxville’s Housing Market Projections

A recent survey from Fannie Mae shows that 23% of consumers think prices will fall over the next 12 months. That’s nearly one in four people who are dealing with that fear – maybe you’re one of them. To help ease that concern, here’s what the experts say will happen with home prices not just next year, but over the next five years. Looking forward, 2024 holds a blend of challenges and opportunities for Knoxville real estate. While Realtor.com’s 2024 forecast predicts a 5.9% dip in home sales, it concurrently anticipates a promising 7.2% rise in home prices. These projections, coupled with the East Tennessee REALTORS®’ forthcoming annual forecast, paint a picture of a market adjusting to evolving economic conditions.

Apartment Rent Growth and Student Housing Market

The rental market in Knoxville is also witnessing notable trends. October saw a continuation of accelerated apartment rent growth, with a 4.14% year-over-year increase across the Knoxville Metropolitan Statistical Area (MSA), significantly outpacing the national average. Additionally, the University of Tennessee’s student housing market ranked No. 11 nationally for rent growth in Fall 2023, marking a substantial 15.9% increase from the previous school year.

Knoxville’s Housing Market: Speed and Pricing

In the fast-paced Knoxville market, homes are selling swiftly. In October half of the homes sold were under contract in 12 days or less, indicating a slight fluctuation from previous periods. Remarkably, 26% of homes sold for more than the asking price, underscoring Knoxville’s competitive real estate environment.

Housing Market Dynamics and Inventory Trends

Despite challenges like limited inventory and affordability, the East Tennessee housing market is adapting. November witnessed a seasonal rise in housing inventory, with an 8.7% year-over-year increase in active listings across the region. This trend indicates a gradually improving market landscape as we move into 2024.

Knoxville’s Labor Market and Economic Factors

The economic backdrop of Knoxville’s real estate market remains strong, despite broader uncertainties. Knoxville’s labor market, as per the Bureau of Labor Statistics (BLS), continues to outperform, ranking among the top U.S. metros for job growth. RealPage Analytics reports a 3.7% increase in Knoxville’s employment base in the year ending October 2023, well above the metro’s long-term average.

Mortgage Rates and Economic Outlook

The mortgage landscape has seen dramatic shifts, we saw rates over 8% earlier in the year and as of today, according to Mortgage News Daily, the 30-year fixed mortgage rate is at 7.02% (UPDATE! One day later we are down to 6.62%!). This rate, while higher than last year’s average, reflects recent market adjustments. The Federal Reserve’s decision not to pursue another rate hike further shapes a cautiously optimistic economic outlook for the National, Knoxville and East Tennessee real estate markets. Many experts believe the FED will cut rates in 2024 leading to mortgage interest rates dropping as well. If that does happen, and you are a homebuyer, there is a Catch 22. Should interest rates fall, inventory will fall along with it, and competition will rise. That may seem counterintuitive but here is what the data shows. (show graphic). When looking at the data since 2016, you can clearly see that when we are in an environment of rates falling, inventory falls and vice verse. Therefore lower rates will stimulate increased demand from buyers leading to more competition, and lower supply… and what does the law of supply and demand tell us about what low supply and high demand will do to home prices? That’s right, it will make them rise. So if that’s the case, is it better to wait until that happens to buy a home, or buy now when competition is lower and there is more inventory available to choose from? We remember what it was like a few years ago when competition was fierce. I don’t think anyone wants that again, but rates dropping could bring it back.

Comment below or contact me, Troy Stavros, directly with questions or if I can help in any way. Call or text 865-999-0925.

OCTOBER 2023 East Tennessee & Knoxville Real Estate Update: Key Market Trends for Buyers & Sellers

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The Knoxville real estate market continues to shine in the national spotlight, securing a formidable second place in the FHFA’s ranking of the top 100 metros for median appraised value growth of single-family homes in Q2 2023. This impressive 9.1% increase from the previous year not only reflects the area’s robust market dynamics but also significantly surpasses the national median, which saw a slight decline.

In a notable achievement, the Knoxville metro area climbed to the 18th spot in the prestigious Wall Street Journal/Realtor.com Emerging Housing Markets Index for Fall 2023. This index, revered for identifying top-performing markets, underscores Knoxville’s appeal with its low living costs and flourishing economy.

The rental landscape in Knoxville is also evolving. After a remarkable near-20% growth in apartment rents in Q3 2022, the pace has moderated, with a 4.5% year-over-year increase in Q3 2023. This trend is in sharp contrast to the national average, which saw a mere 0.04% increase, highlighting Knoxville’s unique rental market trajectory.

Knox County emerges as a tax haven, boasting one of the lowest effective property tax rates in the U.S. at 0.32% in 2022, as per Attom Data’s analysis. This factor, among others, continues to attract homeowners and investors alike.

Despite the market’s overall vitality, approximately a quarter of homes still sold above asking price, a slight decrease from the previous month. Remarkably, over 10% of these sales were at least $10,000 over the listed price, indicating strong buyer interest and competition.

While 2023 has seen a general slowdown in East Tennessee’s housing market, it hasn’t dampened the region’s growth, especially when compared to cities like Nashville and Memphis, which experienced declines in home values.

However, the Knoxville MSA witnessed a significant 27% drop in purchase appraisals from the previous year in Q2 2023, reflecting the wider impact of increasing mortgage rates and limited inventory on buyer activity.

Looking forward, East Tennessee faces a challenging environment with soaring mortgage rates, now at their highest since the early 2000s. The average monthly payment for a median-priced new listing has surged to $2,400, a 22% increase from last year. Despite this, the tight supply continues to propel home prices upward, even as sales volumes decline.

With mortgage rates hovering around 7.5% and buyer expectations set around 5.5%, the market is at a critical juncture. This disconnect, rooted in decades of historically lower rates, shapes current perceptions of home buying feasibility.

Interestingly, the current mortgage rates, while higher than recent averages, are still below the long-term historical average of 7.7% since 1970. This context is vital for understanding the evolving dynamics of homebuyer attitudes and the enduring appeal of homeownership.

As for today’s mortgage landscape, rates have slightly decreased to 7.40% from over 8% last month. This fluctuation continues to influence buyer decisions and market trends.

In a reassuring sign for the Knoxville area, Auction.com’s analysis predicts a low risk of home price correction. This prediction, based on foreclosure auction data, indicates a significant reduction in foreclosure sales volume compared to 2019 levels.

The Knoxville real estate market, reshaped by the pandemic, has witnessed shifts not just in home prices, but also in inventory, population, and median income, further cementing its position as a dynamic and evolving market.

For more updates and insights into the East Tennessee and Knoxville real estate markets, stay tuned and subscribe to the YouTube channel here: https://www.youtube.com/@KnoxvilleTN.

Have questions or need guidance buying or selling real estate in the Knoxville TN or anywhere in East Tennessee? Contact Troy Stavros at 865-999-0925 today and let’s start a conversation.