The Knoxville, TN real estate market continues to be a dynamic landscape, showing signs of resilience and transformation. As we delve into the statistics and trends from the third quarter of 2023, it becomes evident that Knoxville remains an attractive place for both homebuyers and investors.
Robust Home Price Growth Knoxville made its mark in the second quarter of 2023, securing the 16th spot among the top 100 metropolitan areas for home price growth, according to the FHFA House Price Index. The city experienced an impressive 6.8% increase in home prices from the previous year. In comparison, the national average stood at 3.0%. This impressive growth reflects the city's enduring appeal to prospective homeowners and investors alike.
Steadying Apartment Rent Growth After a substantial surge in July 2022, apartment rents in the Knoxville Metropolitan Statistical Area (MSA) have seen a gradual slowdown. In August 2023, rent prices increased by 3.9% from the previous year, a significant contrast to the national average of 0.28%. This moderation in rent growth offers relief to renters while maintaining Knoxville's reputation as a desirable rental market.
Housing Affordability Concerns The sentiment on housing affordability is a topic of discussion among Knox County residents. A new poll conducted by East Tennessee REALTORS® revealed that 67% of Knox County residents believe housing affordability is a significant problem. This sentiment underscores the need for continued efforts to address affordable housing in the region.
Record Mortgage Originations Knoxville witnessed a remarkable surge in home purchase mortgage originations from the first to the second quarter of 2023, marking a staggering 117% increase. This remarkable growth, the largest in the United States, is a testament to the city's thriving real estate market and growing interest in homeownership.
August 2023 Home Sales Highlights
- Home sales in East Tennessee increased by 10.2% from the previous month, although they remain down by 15.4% compared to the same period last year. Year-to-date statistics show a 16.7% decrease in home sales.
- The median home sales price in Knoxville reached $350,000, indicating a robust 7.7% year-over-year increase.
- Housing inventory continued to decline, down approximately 7% from the previous year and remaining approximately 50% below pre-pandemic levels.
- Homes in Knoxville are selling faster, with half of the homes under contract within 10 days or less, up from 8 days the previous month.
- While 28% of homes sold for more than the asking price, this percentage slightly decreased from the previous month, with 13.9% selling for at least $10,000 over asking and 4.7% selling for at least $25,000 over asking.
- The Sale-to-List Price Ratio saw a slight decline to 98.3%, down from 98.6% the previous month.
- New construction homes represented 11.8% of total home sales, emphasizing the ongoing demand for modern and newly-built properties.
As the Knoxville real estate market evolves, these insights highlight both opportunities and challenges for buyers, sellers, and investors. The city's resilience, affordability concerns, and robust growth in home prices and mortgage originations make Knoxville an intriguing and dynamic real estate market to watch.