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East Tennessee & Knoxville Housing Market Update – August 2025

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Are you curious about the current real estate trends in Knoxville and East Tennessee? Whether you’re considering buying, selling, or investing, understanding the latest market shifts is essential for making the right move. Here’s a comprehensive, data-driven look at the August 2025 housing market update for East Tennessee and Knoxville, including prices, inventory, and expert insights.

East Tennessee & Knoxville Single-Family Housing Market Report – August 2025

Economic & Market Context (Applies to Both Markets)

  • Mortgage rates have dropped to the low 6% range (~6.29%), improving affordability and monthly payments for buyers.
  • Labor market data is a growing concern: National job growth over the past year was revised sharply lower, with only 22,000 jobs added in August and significant downward revisions in sectors like leisure, hospitality, retail, and business services.
  • Buyer confidence is mixed—improved by rate relief but tempered by employment insecurity.
  • Inventory is elevated across markets, providing buyers with more choices and reducing urgency.
  • Days on market and absorption rates are increasing, signaling a slower pace of sales and movement toward a more balanced or slightly buyer-leaning market.
  • Negotiability is up: Sale-to-list ratios are lower, and price reductions/concessions are more common.
  • Lending standards may tighten further due to economic uncertainty, limiting access for marginal buyers.

Supply, Demand & Pricing Dynamics (Shared Trends)

  • Active inventory is high vs. last year, keeping upward pressure off prices and giving buyers leverage.
  • New listings remain steady, showing seller engagement, but not enough to create excess supply.
  • Median sale prices are flat to modestly up, while average sale prices have been buoyed by upper-tier transactions.
  • Absorption rates are trending higher YoY, indicating more choices and slower turnover.
  • Days on market for sold listings have increased substantially, especially for homes not priced to current conditions.
  • Sellers must be realistic on pricing and incentives; buyers can negotiate more assertively, especially on stale listings.

Knoxville vs. East Tennessee: Key Differences & Local Nuance

1. Inventory, Absorption & Market Speed

  • Knoxville
    • Absorption rate: 2.94 months (Aug 2025), up 34% YoY—still somewhat seller-leaning but moving toward balance.
    • Active listings: ~1,600, with steady but not excessive new supply.
    • Average Days on Market: 46 (+35% YoY); Median DOM: 22 (+83% YoY).
    • Market is slightly faster than the broader East Tennessee region (which has a 4.82 month absorption rate and longer DOM), but both are slowing.
  • East Tennessee (Region-Wide)
    • Absorption rate: 4.82 months (Aug 2025), up 27% YoY—close to balanced, potentially tipping buyer-friendly if demand softens.
    • Average DOM: 63 (+37% YoY); Median DOM: 29 (+45% YoY).
    • More pronounced inventory build and slower pace overall vs. Knoxville.

2. Pricing Trends

  • Knoxville
    • Median list price: $415,000 (down 7.4% YoY).
    • Average sale price: $512,654 (up 10.5% YoY).
    • Median sale price: $390,888 (up 1.5% YoY).
    • Pricing reflects a sharper correction in list prices, with average sale price buoyed by upper-tier deals, but most sellers see little real appreciation.
  • East Tennessee
    • Median list price: $440,000 (nearly flat YoY).
    • Average sale price: $471,398 (up 6.8% YoY).
    • Median sale price: $376,200 (up 3.1% YoY).
    • List prices haven’t corrected as much as Knoxville, but the pattern of average prices outpacing median is similar, reflecting strength at the top of the market.

3. Negotiation & Sale-to-List Ratios

  • Knoxville
    • Sale-to-list ratios: 95–97% (lower than last year), with frequent discounts needed to close.
    • Median sale prices are often below median list prices, showing persistent buyer leverage.
  • East Tennessee
    • Sale-to-list price ratio: ~95%, also down YoY.
    • Negotiability is common across the region; sellers of aging inventory must stay flexible.

4. Market Segmentation & Buyer Behavior

  • Knoxville
    • Entry-level and mid-market segments ($250k–$400k): Most sensitive to job market fears; these buyers benefit from rate relief but are often sidelined by economic uncertainty.
    • Upper-tier sales ($400k+): Drive the average price higher, but volume is limited.
    • Homes priced right and move-in ready move fastest; stale inventory is slow to clear.
  • East Tennessee
    • Similar segmentation: Entry and mid-market buyers are most impacted by job and lending trends.
    • Upper-tier strength is evident but less concentrated than in Knoxville.
    • Market is generally a bit slower and more diverse across submarkets.

5. Risks & Outliers

  • Knoxville
    • List price declines are more pronounced than region-wide, suggesting sellers are adjusting expectations faster, or a higher share of affordable product is coming to market.
    • Market is less exposed to deep softening than some rural/outlying counties, thanks to more diversified local demand.
  • East Tennessee
    • Outlying areas may see greater inventory buildup and longer marketing times, especially if job losses are concentrated in specific towns or industries.
    • Region is somewhat more vulnerable to further economic shocks, particularly outside major metros like Knoxville.

Strategic Guidance for Both Markets

For Buyers

  • Assess job security and financial stability first—don’t overextend.
  • Negotiate confidently on older or price-reduced listings.
  • Take advantage of lower rates, but ensure full pre-approval and keep contingencies in place.

For Sellers

  • Price to current market—not to last year’s peak.
  • Expect longer marketing times and be ready for strategic concessions (rate buydowns, closing credits).
  • Invest in property condition and presentation to stand out.

For Investors

  • Underwrite with conservative rent and absorption projections.
  • Favor stable neighborhoods and properties with strong rental demand.
  • Prepare for higher vacancies or longer lease-up periods.

Outlook: What to Watch Through Year-End 2025

  • Pending sales and mortgage applications: Early signals for shifts in demand.
  • Local job market trends: Especially important in entry-level and service sectors.
  • Inventory build and price reductions: Especially if list prices keep falling in Knoxville.
  • Market speed: Any further rise in DOM or absorption signals softening.

Conclusion

Both Knoxville and the broader East Tennessee region are experiencing a market in transition, balancing improved affordability against weaker labor market data and rising inventory.

  • Knoxville is adjusting more quickly on price and remains a touch more resilient due to diverse demand, but is not immune to broader economic headwinds.
  • East Tennessee as a whole is trending toward a balanced or slightly buyer-leaning market, with greater risk of softening in less urban submarkets.
  • Success for buyers, sellers, and investors in either market hinges on realism, flexibility, and close attention to both local and macroeconomic trends as the remainder of 2025 unfolds.

Looking for advice specific to your neighborhood or price point?
Contact us for a custom market report or subscribe for monthly updates on Knoxville and East Tennessee real estate!

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.

Unlocking Opportunities: Exploring the Modern Era of Adjustable-Rate Mortgages

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Cast your mind back to the real estate turbulence of 2008, a time when adjustable-rate mortgages (ARMs) commanded the spotlight. Fast forward to today, and ARMs are experiencing a resurgence in popularity among both seasoned homeowners and first-time buyers. Let’s delve into the reasons behind this shift and lay to rest any concerns it might evoke.

A visual representation of data from the Mortgage Bankers Association (MBA) serves as our guide, illustrating the gradual rise in the prevalence of adjustable-rate mortgages over recent years:

As the graph demonstrates, the landscape shifted from approximately 3% of all mortgages in 2021 to a notable increase in ARMs usage last year. The rationale behind this uptick is quite straightforward. With mortgage rates undergoing a significant climb, homeowners found solace in the ARMs option. The allure was simple: ARMs provided a way to secure lower interest rates in a climate where conventional borrowing costs were peaking.

Now, let’s debunk any misconceptions right away – the ARMs of today are not the same as the ones that contributed to the 2008 housing crisis. A pivotal factor behind that crisis was the lax lending standards prevailing at the time. Borrowers could obtain ARMs without substantiating their employment, income, or assets – a recipe for financial instability. This approach landed many homeowners in hot water, as they grappled with loans they were never truly qualified for.

In this iteration, lending standards have undergone a transformation. The financial sector has heeded the lessons from history, implementing stringent verification procedures for income, assets, and employment. In essence, modern-day borrowers are required to qualify for their loans, establishing their capacity to repay.

Archana Pradhan, an Economist at CoreLogic, elucidates the evolution:

“About 60% of Adjustable-Rate Mortgages (ARM) originated in 2007 were granted with minimal or no documentation… Similarly, in 2005, 29% of ARM borrowers had credit scores below 640… At present, nearly all conventional loans, including both ARMs and Fixed-Rate Mortgages, mandate comprehensive documentation, amortization, and are extended to borrowers with credit scores above 640.”

To make this crystal clear, let’s put it in layman’s terms, as described by Laurie Goodman at Urban Institute:

“The Adjustable-Rate Mortgages available today carry no more risk than other mortgage products, and their lower monthly payments could potentially widen access to homeownership for a larger pool of prospective buyers.”

For those concerned that today’s ARMs might resemble the previous crisis triggers, take comfort in knowing that the dynamics have shifted significantly this time around.

And for those venturing into the realm of homeownership for the first time, seeking viable lending options to navigate today’s affordability challenges, consider reaching out to a trusted lender. They stand ready to guide you through the intricate landscape of modern real estate financing.”

Homes for sale in Farragut TN: 12813 Lebel Road

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Homes for sale in Farragut TN are hard to come by. Even more so in the sought-after Fox Run Subdivision. This beautiful home with a Stephen Fuller Southern Living floor plan is the one you’ve been waiting for. Gorgeous updated eat-in kitchen features vaulted ceilings, an abundance of granite counters for prep space and stainless steel appliances including a gas stove and farm sink. The main level also includes the owner’s suite with a wall of windows and access to the back deck. Owner’s bath has dual sinks, custom tub (easy replacement as it’s a standard-size opening) and walk-in shower. The main level also includes the formal dining room, office, and laundry room with utility sink. Upstairs you’ll find the 4 additional bedrooms and a bonus room. Outside you’ll love the privacy in the large backyard which includes a deck, patio, and gazebo with natural gas for a grill. During the warmer months you’ll enjoy Fox Run’s 2 pools, clubhouse, and play fields. For more information or to schedule a private showing contact Troy Stavros with CornerStone Realty Associates at 865-999-0925 today.

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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.

Expert Forecasts on Mortgage Rates for 2022 and 2023

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If you’ve been thinking of buying a home in East Tennessee, you may have been watching what’s happened with mortgage rates over the past year. It’s true they’ve risen dramatically, but where will they go from here, especially as the market continues to slow?

As you think about your homeownership goals and decide if now’s the time to make your move, the best place to turn to for that information is the professionals. Here’s a summary of the latest mortgage rate forecasts from housing market experts.

Experts Project Mortgage Rates Will Stabilize

While mortgage rates continue to fluctuate due to ongoing inflationary pressures and economic uncertainty, experts project they’ll start to stabilize in the months ahead. According to the latest projections, mortgage rates are expected to hover in the low to mid 5% range initially, and then potentially dip into the high 4% range by later next year (see chart below):

Expert Forecasts on Mortgage Rates | MyKCM

That could bring you some welcome relief. So far this year, mortgage rates have climbed over two percentage points due to the Federal Reserve’s response to inflation, and that’s made it more expensive to buy a home. And wondering if the rise in rates will continue is keeping some prospective buyers on the sidelines.

But now that experts say mortgage rates should stabilize, this gives you a bit more certainty about what they think the future holds, and that may help you feel more confident about your decision to buy a home.

Bottom Line

Whether you’re looking to buy your first home in East Tennessee, move up to a larger home, or even downsize, you need to know what’s happening in the East Tennessee housing market so you can make the most informed decision possible. Let’s connect to discuss your goals and determine the best plan for your move.

Have questions or want to talk about buying or selling a property in East Tennessee? Contact the Troy Stavros TEAM today at 865-999-0925. We look forward to serving you!