housing market knoxville Archives

Knox County Housing Market Snapshot | October 2024

SLOW & STEADY…

adequately explains the Knoxville real estate market right now… Despite the inventory of homes on the market being up over 30% compared to the summer and the overall number of homes sold declining for the 3rd straight month, home prices remain fairly consistent.

The limited supply of homes relative to the housing demand in the Knoxville area is a major factor in why home prices remain slightly higher than last year. This demand is fueled by a strong local economy with a relatively low unemployment rate.

On the surface, the ongoing trend of more list price reductions (year-over-year) would suggest that home prices are declining. However, that is not really what is happening…

More home sellers have been listing their homes at “above-market” prices. While this was an effective strategy to get top-dollar for one’s home in 2021, and most of 2022, it is not nearly as effective in today’s market. As a result, more home sellers are reducing the prices of their homes in order to sell them at current market prices.

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Knox County Housing Market Snapshot | September 2024

More Homes to Choose From…

The total housing inventory in the Greater Knoxville area is up over 42% from last year. This is good news for home buyers who were frustrated due to the lack of available homes on the market. For most home sellers, you can likely expect longer days on the market and fewer multiple-offer scenarios.

That said, home prices and the rate of home sales are both up slightly from last year. Overall demand for homes in our area does not appear to be slowing anytime soon. Many factors account for this trend, but the 2 most prevelant are related to declining mortgage interest rates and access to higher-paying jobs in the Knoxville area.

The Knoxville housing market remains strong with a positive outlook heading into 2025. Based on the current numbers, those expecting a major market crash in our area may be waiting a long time…

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Knox County Housing Market Snapshot | July 2024

HOW ‘BOUT THOSE INTEREST RATES?!

Over the past month or so, we experienced a slow and steady decline in mortgage interest rates, but nothing substantial. That changed when the higher-than-expected unemployment numbers came out on Friday, August 2nd, sending rates on a sharper downward trajectory.

Also, there is growing sentiment that the Federal Reserve will lower the fed funds rate by 50 basis points in September. While this drop won’t have a direct impact on mortgage rates, the effect should continue to put downward pressure on rates.

Median home prices in the Greater Knoxville area remain higher than last year, despite a growing supply of homes on the market. The number of active listings in Knox County is at its highest point since late 2020.

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Knox County Housing Market Snapshot | June 2024

Overall, June was a relatively uneventful month for the local housing market. That said, there are signs of changes coming…

Mortgage interest rates jumped up in the middle of June but regressed back down to around 7%. The expectations from Fannie Mae, the Mortgage Banker’s Association, and the National Association of Realtors are that rates should continue to move downward to around 6.8% by the end of this year. Lower interest rates could provide some much-needed improvement to housing affordability and potentially lead to more home buyers entering the market.

The most notable trend is the continued rise in housing inventory. The number of active/unsold listings in Knox County is 30% higher than it was a year ago. Higher housing inventory should continue to put downward pressure on home prices, but for now, the high demand for homes in our area continues to push home prices slightly higher.

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Knox County Housing Market Snapshot | April 2024

STEADY AS SHE GOES…

Overall, there has been very little change in the Knox County housing market over the past few months. Home prices have remained consistent despite rising housing inventory.

The number of new listings that hit the market in April was the highest monthly total since August of 2022. Given that the average number of days that homes are on the market and the sales-to-list price ratio have both remained steady is evidence that there is still very strong demand for homes in our area.

The big news for the housing market in April was the higher-than-expected inflation numbers, which kept the Federal Reserve from lowering rates. In turn, mortgage interest rates increased over the 7% threshold. While many experts predict that rates will eventually decline, the timing of this downward trend has been delayed.

That said, we are eagerly awaiting lower interest rates to help ease the housing affordability issues we’re experiencing throughout the county.

Despite higher rates, the number of jobs and people coming to Knox County continues to fuel the demand for housing in our area. Housing experts still predict slight growth in home prices over the next few years.

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Knox County Housing Market Snapshot | February 2024

EMBRACING THE CURRENT REAL ESTATE MARKET

After a steady decline to start the year, mortgage interest rates have crept back up over the past few weeks due to better than expected US economic news. The expectation is still that rates will decline throughout 2024 and into 2025. However, the rate and significance of this trend will likely be longer and slower.

Despite slightly higher interest rates and higher sales prices, the number of homebuyers seems to be slowly increasing as we enter the spring. The overall demand for housing is still very high in the Knoxville area, driven mainly by a robust job market and favorable cost of living relative to many other parts of the country.

We’re also seeing more and more homebuyers actively looking to purchase homes who have been patiently waiting on the sidelines over the past 3 to 4 years. Most of these people are saying that their motivation to buy a house right now is linked to changes in their families and personal lives.

From a home seller’s standpoint, the number of days-on-market continues to rise. However, average home prices still remain higher than they were at this time last year.

We do expect the overall housing inventory to be on the rise this year. If this inventory gets high enough, it could negatively impact home prices. That said, we are still pretty far away from that scenario coming to fruition with our local housing inventory being 1/3 of what it was in 2018/2019.

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.