The housing market is a dynamic ecosystem that plays a crucial role in the economy and people's lives. Whether you're a potential homebuyer, seller, or just interested in understanding the current trends, staying informed about the latest house prices and trends is essential. In this article, we delve into the house prices and trends in the Tennessee housing market. Let's delve into some trends that provide valuable insights for both buyers and sellers in navigating the dynamic housing market.
Current House Prices & Trends in Tennessee
According to Redfin, as of October 2023, the median home price in Tennessee has witnessed a 4.0% increase compared to the previous year, reaching a median price of $371,900. This data is indicative of the ongoing strength in the housing market, showcasing the continuous demand for residential properties.
Regional Variances in Price Growth
Notably, some metropolitan areas in Tennessee have experienced remarkable growth in sales prices. Greeneville leads the pack with an impressive 63.1% increase, followed by Oak Ridge at 28.1% and Germantown at 24.6%. These figures highlight the diverse nature of the state's real estate landscape.
Housing Supply Dynamics
The availability of homes in the market plays a pivotal role in shaping buyer options and market competitiveness. In October 2023, there were 31,850 homes for sale in Tennessee, reflecting a 1.1% decrease compared to the previous year. The average months of supply stand at 4 months, emphasizing the balance between demand and supply.
Competitiveness in the Market
Understanding the competitiveness of the market is essential for both buyers and sellers. In October 2023, 19.4% of homes in Tennessee were sold above the list price, underlining the competitive nature of the market. Additionally, the sale-to-list price ratio was 97.8%, indicating a robust and well-balanced market.
Top Cities for Migration in Tennessee
Examining migration trends provides valuable insights into the desirability of different areas. In the specified period, Tennessee emerged as a popular destination, with Nashville securing a spot among the top 10 areas people are moving to, with a net inflow of 2,800. The state's appeal is further evidenced by its ranking among the top five states homebuyers searched to move to.
Tennessee Housing Market Forecast 2023-2024
Zillow's latest data reveals insights into the Tennessee housing market, offering a comprehensive look at key indicators influencing the real estate landscape. The average home value in Tennessee stands at $309,795, reflecting a 2.5% increase over the past year. Remarkably, homes are going to pending status in approximately 17 days, highlighting a dynamic and fast-paced market.
Inventory and Listings:
- For Sale Inventory (October 31, 2023): 24,407
- New Listings (October 31, 2023): 7,882
Sale Metrics:
- Median Sale to List Ratio (September 30, 2023): 0.990
- Median Sale Price (September 30, 2023): $313,333
List Price Statistics:
- Median List Price (October 31, 2023): $394,467
Market Trends:
The median sale price of homes in Tennessee, reaching $313,333 as of September 30, 2023, indicates the current value buyers are willing to pay. Meanwhile, the median list price as of October 31, 2023, is $394,467, suggesting a potential upward trend in sellers' expectations.
Sales Performance:
- Percent of Sales Over List Price (September 30, 2023): 23.1%
- Percent of Sales Under List Price (September 30, 2023): 54.9%
These figures underscore the competitive nature of the market, with a notable percentage of homes selling above their listed prices.
Regional Forecast for Tennessee: Top 10 MSAs for Home Price Growth
1. Knoxville, TN
Base Date (31-10-2023): 0.5% | 30-11-2023: 0.8% | 31-01-2024: 3.6% | 31-10-2024: 3.6%
2. Crossville, TN
Base Date (31-10-2023): 0.4% | 30-11-2023: 0.7% | 31-01-2024: 3.6% | 31-10-2024: 3.6%
3. McMinnville, TN
Base Date (31-10-2023): 0.5% | 30-11-2023: 0.7% | 31-01-2024: 3.4% | 31-10-2024: 3.4%
4. Johnson City, TN
Base Date (31-10-2023): 0.6% | 30-11-2023: 0.9% | 31-01-2024: 2.6% | 31-10-2024: 2.6%
5. Morristown, TN
Base Date (31-10-2023): 0.5% | 30-11-2023: 1.0% | 31-01-2024: 2.6% | 31-10-2024: 2.6%
6. Tullahoma, TN
Base Date (31-10-2023): 0.0% | 30-11-2023: 0.2% | 31-01-2024: 2.5% | 31-10-2024: 2.5%
7. Greeneville, TN
Base Date (31-10-2023): 0.4% | 30-11-2023: 0.5% | 31-01-2024: 2.4% | 31-10-2024: 2.4%
8. Athens, TN
Base Date (31-10-2023): 0.5% | 30-11-2023: 0.9% | 31-01-2024: 2.4% | 31-10-2024: 2.4%
9. Kingsport, TN
Base Date (31-10-2023): 0.6% | 30-11-2023: 1.0% | 31-01-2024: 2.3% | 31-10-2024: 2.3%
10. Shelbyville, TN
Base Date (31-10-2023): 0.3% | 30-11-2023: 0.5% | 31-01-2024: 2.3% | 31-10-2024: 2.3%
This regional forecast by Zillow provides valuable insights into the anticipated home price growth across the top 10 MSAs in Tennessee, helping potential buyers and sellers make informed decisions in a dynamic real estate landscape.
Other Factors That Can Impact the Housing Market in Tennessee
When the housing market is booming, it is partly caused by job growth and decreases in unemployment. The housing market is inextricably linked to the economy. The health of the economy and job growth affects real estate buyers' purchasing power. Tennessee has seen the job market increase by 1.8% over the last year.
Future job growth over the next ten years is predicted to be 41.6%, which is higher than the US average of 33.5%. Tennessee was ranked as the 11th best economy in the country in an analysis from WalletHub. The rankings included the 50 states and the District of Columbia, which ranked just ahead of Tennessee at 10th.
The state ranked fourth in terms of economic activity, fifth in terms of economic health, and 38th in terms of innovation potential. It topped the chart in terms of change in GDP from 2020 to 2021, a key factor in its economic activity ranking. Tennessee experienced 8.6% real GDP growth, trailing only New Hampshire (8.5%) and California (7.8%).
More people require housing as the population grows. This means that, in the long run, population growth drives increased demand for housing and, as a result, a strong real estate market. Population growth has a positive impact on the housing market. Middle Tennessee is an area that is constantly growing and according to the United States Census Bureau, Spring Hill in the region was among the top 10 cities for population growth.
Spring Hill was named the tenth fastest-growing city in the nation between 2020 and 2021. According to The Boyd Center for Business and Economic Research, Tennessee could grow by nearly a million people over the next 20 years and reach a total population of 7.87 million by 2040.
The number of people in their prime working years, ages 25 to 54, is projected to increase at a slower pace than the state’s population as a whole. Population growth in the state will slow over the next two decades. Between 2010 and 2020, Tennessee's population increased by 8.9 percent. It is expected to fall to 7.7 percent between 2020 and 2030. Between 2030 and 2040, it could slow even more to 6.2 percent.
The Tennessee Quarterly Business and Economic Indicators report, released by state leaders, illustrates the health of the state's economy. According to the report, 21,353 new businesses filed for the first time in the first quarter of 2022. This was an increase of more than 8% over the same quarter last year.
According to the report, 9,454 of those new businesses were registered in the state's four largest counties: Shelby, Davidson, Knox, and Hamilton. Knox County saw the greatest increase in new filings compared to last year, with 1,366 initial filings, a 14.2% increase. The report also says nominal personal income was $382.8 billion in the state during the fourth quarter of 2021, an increase of 7.4% compared to the previous quarter.
Sources:
- https://www.neighborhoodscout.com/tn/real-estate
- https://www.zillow.com/nashville-tn/home-values/
- https://www.newsweek.com/house-prices-falling-these-five-overvalued-cities-1739363
- https://fred.stlouisfed.org/series/TNSTHPI#
- https://www.bestplaces.net/economy/state/tennessee/
- https://tnsdc.utk.edu/2022/03/09/tennessee-could-add-nearly-1-million-new-residents-by-2040/
- https://www.wbir.com/article/money/economy/tennessee-economic-report-q1-2022/51-58fb9599-f0db-47ad-9316-94b102a1df54
