Knoxville's housing market has been attracting attention compared to other Tennessee cities. With a strong job market and a growing reputation, it's no wonder more people are considering Knoxville in their home buying journey. However, diving into any market requires understanding its trends.
The Knoxville housing market is showing signs of cooling down from the frenzy of recent years. While it's still a seller's market, things are starting to shift towards a more balanced situation, with home prices experiencing a slight dip and homes staying on the market for a bit longer. Let's delve deeper into the key trends shaping the market this year.
Knoxville Housing Market Trends in 2024
Knoxville Home Prices
The median listing home price in Knoxville, Tennessee, was $425K in October 2024. That's down -3.4% compared to the same time last year. This trend indicates that the previous upward trend in home prices is finally starting to cool down. But it's important to remember that this is just a median listing price, and actual sale prices might vary depending on the specific neighborhood and property characteristics.
The median listing home price per square foot in Knoxville was $224 in October 2024. This provides another perspective on the price trend and helps buyers gauge the value of properties based on their size.
The median sold home price in Knoxville was $393K in October 2024 (Realtor.com). This indicates that homes are generally selling for slightly less than their initial listing prices, further demonstrating the shift to a more balanced market.
Knoxville Housing Supply
Inventory levels are slightly up compared to previous years. We see 3,501 homes currently listed for sale. While this may not seem like a huge increase, it's a notable shift from the severe inventory shortages we experienced in recent years. For buyers, this added inventory means a slightly better selection of properties and perhaps some leverage in negotiations.
Market Trends
In October 2024, Knoxville, Tennessee, is showing signs of shifting from a strong seller's market to a more balanced market. This means that the power dynamic between buyers and sellers is gradually becoming more even.
- Sale-to-List Price Ratio: The sale-to-list price ratio in October 2024 was 99.18%. This shows that homes in Knoxville are selling for very close to the asking price, which is typical in a balanced market.
- Days on Market: The trend for median days on the market in Knoxville has gone down slightly since last month, and up slightly since last year. This shows that homes are taking a little bit longer to sell, but it's still a fairly quick turnaround for sellers.
- Buyer and Seller Activity: Overall, the market is showing more balanced activity. While there are still more buyers than homes for sale, the increased inventory and slight price decreases provide some breathing room for buyers in their decision-making process.
Is Knoxville a Buyer's or Seller's Housing Market?
While Knoxville has traditionally been a seller's market, the Knoxville housing market in 2024 is starting to favor buyers more. The increase in inventory and the slight softening of home prices gives buyers more power in negotiations and a wider range of homes to choose from. However, it's still a competitive market and sellers can still find success in securing a good sale price for their homes.
Are Home Prices Dropping?
While not a major crash, home prices in Knoxville are showing a slight downward trend. The median listing price has decreased by 3.4% year-over-year. The median sold price has also been trending downwards. This suggests that while the market is still relatively strong, the rapid price appreciation of the past few years has slowed down.
It's important to emphasize that this is just a trend and individual home prices will vary depending on the neighborhood, condition of the home, and other factors. While a significant drop in home prices is not yet anticipated, the slight downward trend could continue in the coming months.
Neighborhood | Median Listing Home Price | Listing $/SqFt | Homes for Sale | Homes for Rent |
---|---|---|---|---|
Fountain City | $320K | $209 | 45 | 16 |
Sequoyah Hills | $359.9K | $284 | 25 | 2 |
Pleasant Ridge | $320K | $236 | 10 | 8 |
Park City | $270.5K | $220 | 26 | 4 |
South Haven | $320K | $255 | 12 | 8 |
Inskip | $275K | $232 | 20 | 20 |
Burlington | $221.8K | $199 | 17 | 4 |
Downtown Knoxville | $582K | $572 | 18 | 6 |
West Hills | $509K | $255 | 15 | – |
Norwood | $349.9K | $222 | 9 | 1 |
Table 1: Popular Knoxville Neighborhoods & Housing Data (Realtor.com – October 2024)
Factors Influencing the Knoxville Housing Market
Several factors are contributing to these trends in the Knoxville housing market in 2024.
- Interest Rates: Interest rates have been fluctuating, and while they may have come down slightly, they are still higher than in previous years. This can impact affordability for some buyers and slow down the pace of sales.
- Inflation & Economic Uncertainty: The overall economic climate and inflation can impact people's financial decisions regarding buying or selling homes. There is always concern over where the economy might head in the near future.
- Increased Inventory: While still relatively low compared to pre-pandemic times, the increase in inventory has provided buyers with more choices and potentially lessened the pressure to make rushed decisions.
- Demand: Demand for homes in Knoxville remains high. While it's softened a bit, the city's growing economy, job market, and desirable lifestyle continue to attract people to the area, ensuring a steady level of homebuying activity.
What Does This Mean for Knoxville Homebuyers and Sellers?
For Homebuyers:
The current Knoxville housing market trends present a good opportunity for buyers. While the market is still competitive, it is becoming more balanced, giving buyers some more negotiating power.
- More time to make decisions: Homes are not selling as quickly as before, giving you more time to consider your options and potentially negotiate a better price.
- Slightly more inventory: You have a slightly wider selection of homes to choose from, compared to the limited inventory of the past couple of years.
- Potential for lower prices: Prices are softening, offering you an opportunity to find a good deal if you are patient and proactive in your search.
For Home Sellers:
The shift to a more balanced market requires a more strategic approach for sellers. While you still have a good opportunity to sell your home, it's important to be realistic about pricing and work with a real estate agent who understands the current market conditions.
- Focus on presenting your home well: Staging and making necessary improvements can still make a significant difference in attracting buyers.
- Pricing strategy: Working with your real estate agent, ensure you set a competitive price that attracts buyers without being undervalued.
- Be prepared for a slightly longer sales process: Homes are taking a little longer to sell, so be patient and work with your agent to handle any potential delays effectively.
My Thoughts
I think the Knoxville housing market in 2024 is experiencing a period of readjustment. After a period of significant price increases and extremely low inventory, the market is starting to find a new equilibrium. It's still a good time to buy or sell a home in Knoxville, but understanding the current trends is essential for making the best decisions.
If you're a buyer, I'd encourage you to be patient, do your research, and be prepared to act quickly on a property that meets your needs. If you're a seller, I'd recommend working with a knowledgeable real estate agent and setting a realistic price to attract the right buyers.
Knoxville Housing Market Forecast 2024-2025
Based on recent data from Zillow, the Knoxville housing market is expected to show a relatively flat performance in the coming months. While we may see a slight dip in the fourth quarter of 2024, there's a good chance of a rebound in home price appreciation by the end of 2025.
What's Ahead for Home Prices?
Let's delve into the specific details of the Knoxville housing market forecast based on the latest data.
Time Frame | Projected Year-over-Year Home Price Change (%) |
---|---|
October 2024 | 0% |
December 2024 | -0.2% |
September 2025 | 3.8% |
As you can see from the above table, the Knoxville housing market is expected to remain relatively stable in the next few quarters. I personally think that the overall economic conditions and the current inventory levels are factors to consider when analyzing these forecasts. The small expected dip for the end of 2024 might not be a sign of a significant downturn but rather a slight pause in price growth. However, it's always wise to be mindful of the possibility of a small correction in the near future. The projected positive growth by the end of 2025 shows that the Knoxville market is likely to bounce back fairly quickly.
Knoxville vs. Other Tennessee Markets:
It's always interesting to compare the Knoxville housing market forecast to other areas within Tennessee. Let's take a look at a few other major metropolitan areas:
Region | Projected Year-over-Year Home Price Change (%) (October 2024) |
---|---|
Nashville | -0.1% |
Memphis | -0.3% |
Chattanooga | 0% |
Clarksville | -0.1% |
Kingsport | -0.1% |
Based on this comparison, Knoxville seems to be doing slightly better than several other Tennessee cities in terms of projected home price growth in the coming months. The Knoxville market is projected to remain relatively flat compared to other markets.
Will Home Prices Drop in Knoxville? Will There Be a Crash?
Based on the current Knoxville housing market forecast, I think a crash is highly unlikely. While a slight downturn is possible, I don't anticipate a dramatic fall in home prices. The projections show that the housing market is more likely to see a temporary pause in price increases rather than a significant drop.
Of course, like in any market, unforeseen events can affect the prediction. Unexpected changes in the national or local economy or interest rates can always have an impact.
Looking Ahead: A Possible Forecast for 2026
While the current data only provides forecasts up to September 2025, it's always fun to speculate a little. Personally, I think that Knoxville may experience continued but steady growth in 2026. However, it's important to keep in mind this is a guess based on current trends and not official data. There are many factors that can play a role in the longer term, and only time will tell the real story.
The Knoxville housing market remains a promising one for both buyers and sellers. I recommend staying informed about the latest trends and working with a knowledgeable real estate professional for any specific decisions.
Should You Invest In Knoxville Real Estate Market?
There are several reasons why investing in Knoxville's real estate market could be a good choice:
- Strong appreciation rates: Knoxville has experienced significant home appreciation rates in the last ten years, with an average annual appreciation rate of 8.26%, putting Knoxville in the top 20% nationally for real estate appreciation.
- Diversified economy: Knoxville's economy is diverse, with several industries such as healthcare, education, and technology contributing to its growth. This diversity helps to stabilize the housing market and makes it less vulnerable to economic downturns. The region is also home to the Oak Ridge National Laboratory, which is a major research facility and employer in the area. This mix of industries helps to create a stable economic environment, which can provide opportunities for real estate investors.
- Affordable housing market: Compared to other metropolitan areas, Knoxville's housing market is relatively affordable. This makes it an attractive option for investors looking for affordable entry points.
- Strong rental market: Knoxville has a strong rental market, with a vacancy rate that is consistently lower than the national average. This means that investors have a good chance of finding tenants quickly and maintaining a steady rental income. The Knoxville military and retiree market can be another potential factor to consider for real estate investment, especially for rental properties. Knoxville is home to several military bases and has a large retiree population, which can create a steady demand for rental properties. This can provide investors with a reliable and stable tenant pool, which can help reduce vacancy rates and ensure consistent rental income.
- Landlord-friendly environment: Knoxville is known to have a landlord-friendly environment, with laws that are generally favorable to landlords. For example, landlords have the right to evict tenants for non-payment of rent, and the eviction process is generally considered to be quick and efficient. In addition, Tennessee has no state income tax, which can be beneficial for real estate investors looking to maximize their profits.
However, there are also some potential drawbacks to investing in Knoxville's real estate market:
- Slow population growth: While Knoxville has a diversified economy, its population growth has been slow in recent years. Slower population growth could limit the potential for housing demand, which could impact the appreciation rates in the long term.
- Limited job growth: Although Knoxville's economy is diverse, job growth has been slower than the national average in recent years. This could limit the demand for housing in the long term, which could impact appreciation rates.
- Climate risks: Knoxville is located in an area prone to natural disasters such as tornadoes and floods. These climate risks could impact the value of the real estate in the area and lead to higher insurance costs for investors.
Overall, investing in Knoxville's real estate market could be a good option for investors looking for affordable entry points and strong appreciation rates. However, investors should also consider the potential drawbacks, such as slow population and job growth, and climate risks, before making a decision.
Recommended Read:
- Tennessee Housing Market: Trends and Forecast 2024-2025
- Best Places to Live in Tennessee for Families & Adults
- Nashville Housing Market: Prices, Trends, Forecast 2024-2025
- Nashville Housing Market Forecast 2025: What to Expect
- Memphis Housing Market: Trends and Forecast 2024-2025
- Clarksville Housing Market: Prices, Trends, Forecast 2024
- Chattanooga Housing Market Forecast 2024: Will it Crash?