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East Tennessee and Knoxville Housing Market Trends: A Comprehensive May 2024 Analysis

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Are you looking to buy or sell real estate in East Tennessee or Knoxville? Understanding the latest market trends can help you make informed decisions. Here’s a detailed look at the current state of the housing market in these regions as of May 2024.

East Tennessee Market Overview

Home Sales and Inventory:

  • Home sales decreased by 1% compared to last year, marking a shift in the market.
  • However, pending sales rose by 10.1%, indicating strong buyer interest.
  • Inventory surged by 42.8%, providing more options for buyers.

Prices and Absorption Rates:

  • The median sales price increased by 8.96%, reaching $365,000.
  • The average price per square foot stands at $221.
  • The absorption rate climbed to 3.14 months, suggesting a balanced market with increased inventory and slightly reduced demand due to high interest rates.

Key Trends:

  • The most active price range for sales was $300,000 to $350,000.
  • The $350,000 to $400,000 range saw the most new listings and pending sales.
  • Days on market are decreasing, reflecting quicker sales.

Knoxville Market Insights

Sales and Inventory:

  • Home sales in Knoxville rose by 7.8% from last year.
  • Inventory increased by a substantial 55.1%, offering more choices for buyers.
  • New listings were up by 12.2%, further expanding the market.

Pricing Dynamics:

  • The median sales price saw a modest rise of 2.04%, reaching $397,950.
  • The average price per square foot is $227.
  • The absorption rate increased to 1.64 months, still indicating a seller’s market.

Significant Segments:

  • The $300,000 to $350,000 price point had the highest number of sales.
  • The $350,000 to $400,000 range dominated pending sales and new listings.
  • The market remains competitive, especially in the lower to mid-range price segments.

County-by-County Breakdown

Roane County:

  • Inventory up by 92.7%, pending sales stable.
  • Median sales price up by 11.67%, at $334,900.

Knox County:

  • Inventory up by 58.6%, pending sales up by 8.3%.
  • Median sales price up by 1.56%, at $389,450.

Anderson County:

  • Inventory up by 55.8%, pending sales up by 2.4%.
  • Median sales price up by 13.98%, at $318,000.

Loudon County:

  • Inventory up by 46%, pending sales down by 6.9%.
  • Median sales price up by 15.26%, at $532,500.

Sevier County:

  • Inventory up by 36.38%, pending sales down by 12.07%.
  • Median sales price up by 8.9%, at $590,000.

Blount County:

  • Inventory up by 61%, pending sales up by 11.2%.
  • Median sales price down by 5.07%, at $370,000.

Market Action and Affordability

The market action index has been trending down, indicating more supply and slightly reduced demand due to higher interest rates. Despite this, the market remains a seller’s market, especially in Knoxville where inventory is still below pre-pandemic levels.

Affordability Challenges:

  • High mortgage rates (over 7%) are affecting affordability.
  • Only 15% of homes are affordable for those earning the median household income of $62,911.
  • Interest rates’ movements will significantly impact market dynamics.

Future Outlook:

  • Low mortgage rates are unlikely in 2024 due to inflation.
  • Significant drops in home prices are not expected in the near term.
  • Lot availability and new construction remain challenges, contributing to higher home prices.

Conclusion

Whether you’re buying or selling, understanding these market trends is crucial. More inventory means more choices for buyers, while still low overall inventory keeps the market favorable for sellers. Stay informed, consult with your real estate agent, and keep an eye on interest rates to make the best decisions in the current East Tennessee and Knoxville housing markets.

For personalized advice and insights, don’t hesitate to reach out to Troy Stavros with Cornerstone Realty Associates. Happy house hunting!

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

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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!