If you’re keen to invest in the Knoxville real estate market and buy before prices become out of reach, you must read till the end. Knoxville is one of the smaller cities in Tennessee, overshadowed by the more famous Memphis and Nashville.
However, this creates a great opportunity for investors seeking value over the bragging rights of being able to say you rented out a house to tourists coming to see a famous country music star. Let’s learn more about Knoxville before sharing the top reasons to invest there.
Knoxville is located on the eastern side of the state, nestled in the Great Smoky Mountains, a sub-range of the Appalachian Mountains. It is just over 100 miles from Chattanooga and 180 miles from Nashville. This puts it much closer to Nantahala National Forest than other big cities in Tennessee.
This isn’t to say that Knoxville is isolated. It is well connected to the rest of the country via Highways 40 and 75.
Knoxville itself is home to around 200,000 people. The Knoxville housing market includes several equally large suburbs.
This means the Knoxville area is actually home to around 900,000 people. Size, though, isn’t reason enough to invest in an area. Is Knoxville going to be one of the hottest real estate markets for investors in 2020? Let’s take a deep look at the latest Knoxville housing market trends to come to a conclusion.
Knoxville Real Estate Market Forecasts 2020 – 2021
The real estate data from Zillow shows that the median home value in Knoxville is $173,900. Knoxville home values have gone up 7.0% over the past year and their Knoxville real estate market prediction is that the prices will rise 3.9% within the next year. The median list price per square foot in Knoxville is $116, which is lower than the Knoxville Metro average of $122.
The median price of homes currently listed in Knoxville is $249,900 while the median price of homes that sold is $187,800. The median rent price in Knoxville is $1,325, which is lower than the Knoxville Metro median of $1,350.
Here is the Knoxville, TN real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 3.9% till July 2020.
Knoxville Housing Market Forecast 2021
The Knoxville housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The Accuracy of the Trend Prediction for Knoxville is 90%. Accordingly, LittleBigHomes.com estimates that the probability for rising house prices in Knoxville, TN is 90% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Knoxville, Tennessee Real Estate Market Forecast.
Knoxville Real Estate Market Trends
According to Trulia, Knoxville real estate market trends indicate an increase of $9,900 (5%) in median home sales over the past year. The average price per square foot for this same period rose to $116, up from $111.
At present, Trulia has 2,191 resale and new homes for sale in Knoxville, TN, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sales price is $205,000. Homes for sale in Knoxville are selling for about $121/sqft.
As per the real estate company named Redfin, the Knoxville housing market is somewhat competitive. Homes in Knoxville receive 2 offers on average and sell in around 50 days. The average sale price of a home in Knoxville was $230K last month, up 16.8% since last year.
The average sale price per square foot in Knoxville is $119, up 8.2% since last year. Homes typically receive 2 offers. Homes in the Knoxville housing market sell for about 1% below list price and go pending in around 50 days. Hot homes in Knoxville, TN can sell for around list price and go pending in around 33 days.
Knoxville Housing Market Trends in August 2019: Source Redfin.com
Median List Price
Avg. Sale / List
Median List $/Sq Ft
Avg. Number of Offers
Median Sale Price
Avg. Down Payment
Median Sale $/Sq Ft
Number of Homes Sold
There are currently 2142 homes for sale in Knoxville on Redfin, at a median listing price of $267K. Most homes for sale in Knoxville stay on the market for 57 days and receive 1 offer. In the past month, 2395 homes have been sold in Knoxville.
The median price per square foot in Knoxville has increased by 8.2% over the past year. The asking price of homes for sale in Knoxville has increased 71% since August last year, while the number of homes for sale has decreased 81.4%.
There are 3,322 homes for sale in Knoxville, TN on Realtor.com. 237 of which were newly listed within the last week. Additionally, there are 245 Knoxville rentals for sale, with a range of $450 to $8.2K per month. According to Realtor.com’s statistics, in July 2019, the Knoxville housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale.
Their data also shows that, in July 2019, the median list price of homes in Knoxville, TN was $259.9K, trending up 10.6% year-over-year. The median listing price per square foot was $122. The median sale price was $233,000. On average, homes in Knoxville, TN sell after 55 days on the market. The trend for median days on market in Knoxville, TN has gone up since last month, and slightly up since last year.
The median list price in Knoxville, Tennessee is $330,784 on Movoto.com. The median list price in Knoxville went down 2% from August to September. Knoxville’s home resale inventories is 1,415, which increased 1 percent since August 2019. The median list price per square foot in Knoxville is $129. August 2019 was $130. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in September.
Knoxville, TN Single Family And Multi-Family Homes
Following the real estate market decline in 2007 in the U.S., single family rental homes became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.
Single family rental properties have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
As per the real estate company called Neigborhoodscout.com, the median house price in Knoxville, TN is $156,851, which indicates that home prices in Knoxville are near the national average for all cities and towns in the United States. Single-family detached homes are the single most common housing type in Knoxville, accounting for 53.49% of the city’s housing units.
One or two bedroom single-family detached homes are the most commonly found housing units in Knoxville, Tennessee. Other types of housing that are prevalent in Knoxville include large apartment complexes, duplexes, homes converted to apartments, and a few row houses. Knoxville has a mixture of owner-occupied and renter-occupied housing.
Currently, there are 1,598 single family homes for sale in Knoxville, TN on Zillow. Additionally, there are 177 single family homes for rent in Knoxville, TN. Under potential listings, there are about 53 Foreclosed and 168 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Knoxville, TN Foreclosures And Bank Owned Homes
As per the Knoxville foreclosure data by Zillow, in Knoxville, 0.6 homes are foreclosed (per 10,000). This is lower than the Knoxville Metro value of 0.9 and also lower than the national value of 1.2. The percent of delinquent mortgages in Knoxville is 0.8%, which is lower than the national value of 1.1%.
With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth.
The percent of Knoxville homeowners underwater on their mortgage is 6.9%, which is lower than Knoxville Metro at 7.7%.
|Foreclosures in Knoxville||140|
|Homes for Sale in Knoxville||2,065 (RealtyTrac)|
|Median List Price||$239,999 (7% ⇑ vs Jun 2018)|
There are currently 140 properties in Knoxville, TN that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 2,065. In July 2019, the number of properties that received a foreclosure filing in Knoxville, TN was 48% lower than the previous month and 61% lower than the same time last year.
Best Neighborhoods To Buy Knoxville Rentals
If you are looking to buy Knoxville rentals, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Knoxville rental real estate and you should be able flip it for a lump sum profit.
When looking to invest in Knoxville real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Knoxville investment property should be low. The neighborhoods in Knoxville must be safe to live in and should have a low crime rate.
The neighborhoods should be close to basic amenities, public services and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. There are 50 elementary schools, 17 middle schools, 23 high schools and 47 private & charter schools. There are 75 neighborhoods in Knoxville.
Some of the best neighborhoods in or around Knoxville, Tennessee are Fountain City, Sequoyah Hills, Pleasant Ridge, Old City, University of Tennessee, River Hill, Island Home, South Knoxville, North Knoxville, East Knoxville, North Hills, Parkridge, Lake Forest, Downtown Knoxville and Beaumont.
Westmoreland has a median listing price of $712.2K, making it the most expensive neighborhood. Park City is the most affordable neighborhood in Knoxville, with a median listing price of $95,000.
Here are the best neighborhoods to invest in Knoxville rentals because they have the highest appreciation rates (List by Neigborhoodscout.com).
Deane Hill / Westmoreland Heights
Bearden / Forest Hills
N Broadway St / N Central St
Lyons View / Sequoyah Hills
Asbury / Ramsey
Hickory Hills / Galewood
Should You Invest In Knoxville Rental Real Estate?
Now that you know where Knoxville is, you probably want to know why we’re recommending it to real estate investors. Is it worth buying a house in Knoxville, TN? Investing in real estate is touted as a great way to become wealthy.
Many real estate investors have asked themselves if buying a rental property in Knoxville is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Knoxville housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for Knoxville but we have collected ten evidence based positive things for those who are keen to invest in the Knoxville rentals in 2019.
Investing in Knoxville rentals will fetch you good returns in the long term as the home prices in Knoxville have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Knoxville real estate market which can help investors who are keen to buy an investment property in this city.
One point in favor of the Knoxville housing market is its affordability. The average home here is worth roughly 175,000 dollars despite having seen 7 percent inflation from 2018 to 2019. You can find even cheaper Knoxville real estate investment properties in the suburbs.
For example, the average house in Heiskell costs only 135,000 dollars. In nearby Alcoa, a suburb of Knoxville, homes cost around 120,000 dollars. This means you could by one or two Knoxville real estate investment properties for less than the cost of the average home in America.
2. Strong Growth
The Knoxville real estate market is seeing significant appreciation. Home prices increased seven percent in 2018, and they’re expected to rise four percent over the next year. Prices have gone up in part because the vacancy rate has fallen significantly. We can expect rents and property values in the Knoxville housing market to continue for the next few years.
3. The Constraints on Supply
The Knoxville real estate market is seeing significant appreciation and falling inventory. Yet it isn’t seeing a boom in new home construction. This is partially due to memories of the last real estate market collapse. Another factor is the large number of starter homes in the Knoxville housing market.
Many people buy these homes but face competition trying to move up in house. That raises prices across the board but doesn’t necessarily create demand for new homes.
4. Decent Knoxville Rental Rates
The Knoxville housing market has decent rental rates whether you’re buying in Knoxville proper or considering a Knoxville real estate investment property in the suburbs. The average rent in the Knoxville real estate market is roughly 1350 dollars per month, though you can charge much more for a single family home. Rental rates average 90 cents per square foot.
5. The Diversified Local Economy
Why is the Knoxville housing market seeing such appreciation? In a word, jobs. The Knoxville real estate market is seeing relatively large numbers of people move here for work. The city of Alcoa is named for the aluminum mining and manufacturing jobs there, but the local economy has diversified beyond mining and manufacturing.
The US Department of Energy has had operations in Oak Ridge since World War 2. The University of Tennessee has a campus here. The city is the regional services hub, leading to many education and medical jobs in the area.
6. The Knoxville Military Market
The Knoxville real estate market has a larger than expected number of renters because of McGhee Tyson Air National Guard Base. The military base is home to thousands of service men and women. Those who choose to live off base have to rent, driving up rental rates and, indirectly, property values.
Several thousand more people flood into the area for national guard and reserve training or to attend officer school. Demand is so great that there are hotels right by the base to house them, though others rent houses or stay at other hotels in the Knoxville area.
7. The Military Retiree Market
The combination of McGhee Tyson Air National Guard Base and Knoxville’s quality of life is that the area is attractive to military retirees. The related veterans’ administration facilities and amenities also led to the area becoming a place where many chose to retire.
There are an estimated ten thousand military retirees within fifty miles of base, ranking the Knoxville housing market among the top ten most popular military retiree communities. This increases demand for Knoxville real estate investment properties near base, since many retirees want to stay close to base.
A side benefit of the area’s low cost of living and mild winters is that many people who leave active service choose to remain here for their next few years on call.
8. The Landlord Friendly Environment
Tennessee is classified as a landlord friendly state. You don’t have to pay interest on deposits. The state is unusual in stating that a written rental agreement isn’t required unless the person is staying more than three years. The norm is 12 months.
There is no payment grace period law. However, Tennessee isn’t as landlord friendly as some other southern states. For example, you have to give a 14 day notice to evict if someone hasn’t paid their rent. They also have that long if they intentionally damaged the unit or committed violent acts or threatened others.
Termination without cause typically requires waiting until the end of the lease, and it may require written notice. Note that the state would require you to get a rental license to rent out a Knoxville real estate investment property.
Knoxville has light regulations on landlords who offer short term rentals. The city requires you to collect lodging taxes, have a permit, and have a contact person that can be reached when there are issues. They city passed laws in 2018 that forbid non-owner-occupied rentals in residential areas, but they are allowed in other zones.
9. The Balmy Tax Climate
Tennessee has the eleventh or twelfth lowest property tax burden in the United States, depending on which study you look at. The average home owner in the Knoxville real estate market paid about 0.75 percent of their home’s value in property taxes.
For comparison, the national average hovers around 1.1 percent. Investors may like the fact that the state doesn’t charge an income tax, either. The state pays the bills mostly because of an insanely high sales tax, but that doesn’t affect owners of Knoxville real estate investment properties.
Knoxville Real Estate Investment
Maybe you have done a bit of real estate investing in Knoxville, Tennessee but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good Knoxville real estate investment opportunity would be a key to your success. in If you invest wisely in Knoxville rental real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the Knoxville rentals are, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in Knoxville, you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Knoxville, TN. Forget Nashville and the lure of tourist rental income. Consider investing in an affordable, stable real estate market offering relatively high rates of return like the Knoxville real estate market.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process.
They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Knoxville real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2019
Another sizzling market to choose for investment is Manhattan, NY. Manhattan offers incredibly dense housing, incentives for more of the same, and a large, loyal renting population. If you can afford to invest in the Manhattan real estate, it can be worth the effort.
The Manhattan real estate market is famous for an average one bedroom apartment surpassing 3000 dollars a month in rent. However, you don’t have to have millions of dollars of cash on hand to consider Manhattan real estate investment.
There are cheaper properties in the boroughs, and they’ll command 1500 dollars a month in rent for a one bedroom and much more for a two bedroom or three bedroom apartment. And rents in the Manhattan housing market are going up at faster than the rate of inflation.
The other best place to invest in real estate is Santa Barbara, CA. The Santa Barbara area is a textbook case of limited supply and high demand driving up the cost of renting and owning in the area. Residents enjoy a higher quality of life, while property owners face lower taxes and less regulation.
That makes the Santa Barbara housing market one of the best choices for those considering investing in a California coastal community. If you are a real estate investor, Santa Barbara has a track record of being one of the best long term real estate investments in the country.
More than half of all residents in the Santa Barbara housing market rent. This is often the result of economics. The average wage is $50,000, while the average home hovers around half a million dollars.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Growth & Constraints on supply
Housing Market Data, Trends & Statistics