Knoxville Housing Market Archives

Knox County Housing Market Snapshot | December 2023

SO WHERE DO WE GO FROM HERE?

2023 has come to a close, and as expected, we did not see a real estate market crash. Home prices are still up around 9% from the end of 2022.

While some appreciation is projected for 2024 (especially in the lower price points) home prices, as a whole, appear to have plateaued in Knox County. The median home price in our area has been relatively flat since September. With interest rates declining, this is a welcomed sight for those looking to buy a home.

Homebuyers should also enjoy more homes to choose from in 2024 as the inventory of homes for sale is projected to rise throughout the year.

As a result of rising inventory, home sellers should expect to experience a longer amount of time on the market. With buyers having more homes to choose from, pricing one’s home correctly will be crucial to getting it sold quickly.

HOWEVER, if interest rates continue to drop into the low-to-mid 5% range, another tsunami of homebuyers could enter the market. This scenario could potentially put Knox County back into a red-hot real estate market status with multiple offers and very short amounts of time on the market for listings that are properly listed.

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Knoxville Housing Market Snapshot | November 2023

INTEREST RATES ARE COMING DOWN…

As predicted mortgage interest rates have begun a fairly steady decline since late October when they hovered around 8.25%. This favorable trend is expected to continue into 2024. In fact, both Fannie Mae and the Mortgage Bankers Association predict interest rates will continue dropping well into 2025. This is an optimal trend for a mortgage interest rate buydown if you want to buy a home right now (you can contact Debbie Windisch at Union Home Mortgage for details).

The average home sales price in Knoxville is still up just under 10% compared to this time last year. A limited housing inventory, a low unemployment rate, and many new higher-paying jobs coming to the area are all having a major impact on local home prices.

The outlook for 2024 is still positive for the Knoxville housing market. There are no signs of any significant home price depreciation coming. However, housing inventory is expected to rise throughout the year, so those selling their homes should expect a longer time on the market and far fewer multiple-offer scenarios for homes listed at or near market value.

Knoxville Housing Market Snapshot | October 2023

EYES ARE ON INTEREST RATES

After weeks of consistent increases, mortgage rates dropped below 8% after news that the Federal Reserve did not raise the “fed funds rate”. This is welcomed news for the housing market. Most experts and leaders in the mortgage industry are still predicting declining interest rates in 2024. However, the timing of this trend is still unclear.

As for home prices, there is no decline/depreciation in sight, especially for Knoxville. The average home sales price in Knoxville was up almost 10% last month compared with October 2022. Despite decreasing demand (buyers in the market) due to higher interest rates, the overall supply of available homes remains extremely low.

However, there are indications that home prices should stabilize as we head into the new year. The Knoxville housing inventory has been increasing steadily since the late summer.

The home absorption rate (number of months it will take to buy up the current number of homes on the market) is the highest it has been in the past 12 months at 1.61 months. That said, this number still reflects a strong seller’s market, but the upward absorption rate trend indicates that we’re moving towards a more balanced market. For some perspective, most economists consider an absorption rate of 4 to 6 months to be a balanced market and anything over 6 months to be a strong buyer’s market. We’re still VERY FAR from either of those scenarios.

If you’re interested in what the real estate market is like in your area, check out our local market reports.

Knoxville Housing Market Snapshot | September 2023

PEOPLE ARE STILL BUYING HOMES

Many people feel uneasy about the real estate market right now. Most of us know that home prices are at all-time highs and interest rates are significantly higher than they were 2 years ago. However, the market data for our area suggests that there is still relatively substantial home buyer demand.

Below you’ll notice that average home prices in Knoxville are still up 7% from last year and the average days-on-market is still a favorable 18 days. For some perspective, the average days-on-market for a home in Knoxville 10 years ago was well over 100 days.

All eyes are on the Federal Reserve and interest rates. Our overall economy has not slowed down as quickly as expected, which is why the Federal Reserve keeps rates, which is helping to push mortgage rates higher. This trend is expected to stop at some point in the near future.

The credible experts we follow are now saying that they expect mortgage rates to begin falling again sometime in early 2024. We are eagerly awaiting this to happen because it will help bring some much-needed housing affordability back into our market. This will also give those who purchased this year a chance to refinance and save some money.

Learn more about your local housing market: https://listings.homemarketinggroup.com/idx/market-reports

Knoxville Housing Market Snapshot | August 2023

NO SIGNS OF A SLOWDOWN YET…

The gradual upward trend in Knoxville area home prices continued in August. Limited housing inventory, a very low unemployment rate, and extensive demand continue to be the recipe that is driving prices up.

Mortgage interest rates remained relatively steady last month. That said, many reputable mortgage experts and economists predict significant declines in interest rates as early as this winter. By the end of next spring, interest rates could be down in the low 5% range making for an excellent opportunity to refinance your mortgage if you’ve bought a home within the past 18 months.

It’s still an amazing time to sell a home, which may not last much longer. When interest rates drop, there will likely be a rise in housing inventory. As inventory rises, home price appreciation will cool off. Also, It will likely take longer to sell your home with more competition on the market and more concessions required to make a deal.

Get your local housing market report: https://listings.homemarketinggroup.com/idx/market-reports

Knoxville Housing Market Snapshot | July 2023

HERE’S WHERE WE ARE AT…

The average sales price of homes in Knoxville remained well above what it was at this time last year. That said, we’ve noticed some signs that prices may be starting to stabilize.

When comparing our sales price-to-listing price ratio on a month-to-month basis, it dropped for the first time since January. Also, the absorption rate of homes in our area (how fast homes are selling) also continued its upward trend to a 2.2 months supply. While this number still represents a strong seller’s market, the upward trend indicates that we are moving closer to the 4-month benchmark that many housing experts use to determine whether or not we are in the “buyer’s market” or “seller’s market”.

Typically, when you have a rising absorption rate, a declining sales price-to-listing price ratio, and a higher average days-on-market (compared to this time last year), you also see housing inventory increase. That’s really not the case in Knoxville right now! Our overall housing inventory has remained relatively flat throughout 2023 and is still about 13% below what it was at this time last year.

So, what does this mean? It could be that the demand for housing is starting to soften just a little bit. This is likely due to the rate at which home prices have risen over the past few years and not because there are fewer people who want to buy a home. Potential home buyers could be “waiting things out” to see what happens with interest rates (expected to start coming down at the end of 2023 and into 2024). Others could be waiting to buy because they just can’t afford the ideal home for the lifestyle they would prefer to have.

If you have questions about our housing market or whether or not now is the time to make a move, feel free to contact us.

Knoxville Housing Market Snapshot | June 2023

ACTING WITH THE FUTURE IN MIND

The recipe that makes home prices what they are in the Knoxville area hasn’t changed over the past few months. In short, the demand for homes still far outweighs the supply and continues to slowly push prices upward. In fact, the average sales price for a home is up almost 13% compared to this time last year.

Mortgage rates haven’t changed much move the past 30 days. The good news is that expectations from many economists and mortgage experts are that rates will begin dropping this year and could be in the 5% range by next year.

The outlook on the US economy continues to improve as well. The risk of a substantial real estate market crash coming anytime soon is minimal at this point. In fact, many economists don’t foresee any recession in the near future. And if a recession does transpire, it will be mild and not nearly as bad as the one that hit the United States in 2007.

Our unsolicited advice? Don’t try and time the market… If you can afford to buy the house you want, then strongly consider buying it sooner than later. With home prices creeping up, it may be wise to lock in at the current sales prices. Once mortgage rates begin sliding back down, you can refinance your mortgage to take advantage of the lower rate and reduce your monthly payment.

On the flip side, it’s still a very favorable time to sell your home right now. We’ve seen many of our clients drastically improve their financial situations using the money they received from the sale of their homes.

Got questions? Contact HMG

Knoxville Housing Market Snapshot | May 2023

FEELIN’ HOT, HOT, HOT…

Fueled by an economy that is growing at nearly twice the pace of the national economy, Knoxville’s housing market has shown no signs of slowing down. The average sales price in May skyrocketed to just over $460K compared to $425K in April. While this could only be a one-month aberration, average home prices are still trending upward from the start of 2023.

Housing inventory also crept up in May, which is a welcome sign for the many homebuyers waiting for that right home to hit the market.

Despite the increase in the number of homes for sale, our sales price-to-list price ratio remained above 100%, signaling that demand still far outweighs the housing supply in the Knoxville area.

Housing affordability is becoming more and more of a concern for Greater Knoxville. As home prices recently rose above the national average for the first time ever, homes for sale in lower price points have become quite scarce. Rapid net population growth and extremely low unemployment are a few of the primary factors driving this trend.

If you are curious about what your house is now worth given the recent increase in home prices, reach out to our research team for a no-obligation home value estimate: https://homemarketinggroup.com/your-home-value/