Given the current dynamics, the Tennessee housing market leans towards being a seller's market. The high percentage of homes selling above list price, coupled with a relatively low number of price drops, signifies favorable conditions for sellers. Buyers, on the other hand, may face increased competition and should be prepared for potential bidding wars. The Tennessee housing market is poised for continued growth, as evidenced by the positive trends observed in January 2024. The steady increase in median sale prices and the demand for homes above list prices suggest a favorable outlook for sellers.
Current House Prices & Trends in Tennessee in 2024
How is the Housing Market Doing Currently?
In January 2024, the Tennessee housing market exhibited robust performance. According to Redfin, the median sale price saw a significant +5.3% year-over-year increase, reaching an impressive $364,300. This uptrend indicates a positive growth trajectory, reflecting the state's real estate resilience.
The number of homes sold, however, experienced a modest decline of -1.4% year over year, with 4,893 homes changing hands in January 2024. The median days on the market extended to 69 days, up by 1 year compared to the previous year.
How Competitive is the Tennessee Housing Market?
The market in Tennessee remains competitive, with 15.3% of homes selling above the list price in January 2024, marking a +0.8 point increase from the previous year. Conversely, only 20.3% of homes experienced price drops, down from 21.0% in January last year. The sale-to-list price ratio strengthened to 97.4%, indicating a +0.4 point year-over-year improvement.
The top 10 metros in Tennessee with the fastest-growing sales prices further highlight the market's competitiveness. Cities such as Hendersonville, Morristown, and Johnson City witnessed remarkable increases, with Hendersonville leading at an impressive 33.3% growth in sales prices.
Are There Enough Homes for Sale in Tennessee to Meet Buyer Demand?
As of January 2024, there were 28,881 homes available for sale in Tennessee, demonstrating a slight +0.5% year-over-year increase. However, the number of newly listed homes decreased by 6.0% compared to the previous year, standing at 6,776. This scenario indicates a potential supply-demand imbalance, contributing to the competitive nature of the market.
The average months of supply reached 4 months, up 0 year over year. This metric suggests a relatively balanced market, but the decrease in newly listed homes may impact the overall supply in the coming months.
Tennessee Housing Market Forecast for 2024 and 2025
Average Home Value
According to Zillow, the average home value in Tennessee stands at $306,156, marking a 4.2% increase over the past year. This substantial growth indicates a thriving real estate market, attracting potential homeowners and investors alike. Homes are in demand, contributing to the overall upswing in property values.
Days on Market
Properties in Tennessee are moving swiftly, with the average time to go pending being approximately 31 days. This quick turnaround time suggests a high demand for homes, reflecting a dynamic market where buyers are actively pursuing available properties.
For Sale Inventory
As of January 31, 2024, the Tennessee housing market boasts a for sale inventory of 22,643. This significant number of available homes provides options for potential buyers, contributing to a diverse and vibrant real estate landscape.
New Listings
In January 2024, 5,264 new listings entered the Tennessee housing market, signaling ongoing activity and growth. The consistent addition of new properties ensures a steady influx of options for prospective buyers, fostering a competitive yet balanced market.
Median Sale to List Ratio
As of December 31, 2023, the median sale to list ratio in Tennessee is 0.983. This ratio indicates that, on average, homes are selling for approximately 98.3% of their listed price. A higher ratio generally suggests a seller's market, emphasizing the competitiveness in the state's real estate scene.
Median Sale Price
The median sale price of homes in Tennessee, as of December 31, 2023, is $294,600. This figure provides a snapshot of the middle point of property values, allowing both buyers and sellers to gauge the overall pricing trends in the market.
Median List Price
As of January 31, 2024, the median list price for homes in Tennessee is $386,300. This benchmark showcases the average listing price of available properties, guiding potential buyers in their search for suitable homes within their budget.
Percent of Sales
Examining the distribution of sales, 17.8% of transactions in Tennessee were over list price, while 61.1% were under list price as of December 31, 2023. This data provides insight into the negotiation dynamics between buyers and sellers, highlighting trends in pricing strategies.
Are Home Prices Dropping in Tennessee?
Contrary to a decline in home prices, the data indicates a general upward trend in property values across various regions in Tennessee. The forecasted growth percentages for the coming months suggest that home prices are not currently experiencing a drop. However, it's crucial to monitor the market regularly for any shifts or changes that may impact pricing dynamics.
Will the Tennessee Housing Market Crash?
Based on the available data and forecasts, there is no imminent indication of a housing market crash in Tennessee. The positive growth percentages across different regions suggest a resilient and stable market. However, real estate markets can be influenced by various factors, and it's essential to stay informed and adapt to any changes in economic conditions, interest rates, or other external factors that could impact the housing market.
Is Now a Good Time to Buy a House in Tennessee?
Considering the current dynamics, now can be a challenging but opportune time to buy a house in Tennessee. While the seller's market may pose challenges for buyers, the projected growth in property values indicates potential appreciation. For those looking to invest or secure a home, acting decisively and being well-prepared in negotiations is key.
Top Areas in Tennessee Expected to See the Highest Increases in Home Prices
The regional housing market forecast for various areas in Tennessee provides valuable insights into the anticipated trends and growth trajectories. Examining specific regions, such as Crossville, Knoxville, McMinnville, Greeneville, and Tullahoma, unveils a nuanced picture of the real estate landscape.
Crossville, TN
In Crossville, a metropolitan statistical area (msa) in Tennessee, the market is expected to experience a modest but steady growth. As of January 31, 2024, the forecast indicates a 0.1% increase in housing prices by February 29, 2024, followed by a more substantial 1.6% uptick by April 30, 2024. Looking ahead to January 31, 2025, a remarkable 8.6% growth is projected, reflecting a potentially flourishing real estate market in the Crossville region.
Knoxville, TN
Knoxville, another metropolitan statistical area in Tennessee, shows a slightly more optimistic outlook. With a 0.3% increase forecasted by February 29, 2024, and a consistent 1.6% rise by April 30, 2024, the Knoxville housing market appears robust. The forecast for January 31, 2025, suggests an 8.3% growth, indicating sustained momentum in the region's real estate sector.
McMinnville, TN
Turning to McMinnville, the housing market displays a positive trajectory with a 0.1% increase by February 29, 2024, and a 1.3% growth by April 30, 2024. Looking further ahead to January 31, 2025, the forecast projects a 7.5% rise, indicating notable potential for real estate appreciation in the McMinnville area.
Greeneville, TN
Greeneville, as part of the Tennessee metropolitan statistical areas, anticipates a steady climb in housing prices. With no change projected by February 29, 2024, a 1.6% increase is expected by April 30, 2024. The forecast for January 31, 2025, predicts a 7% growth, portraying a positive outlook for the Greeneville real estate market.
Tullahoma, TN
Tullahoma rounds out the regional analysis with a forecasted 0% change by February 29, 2024, followed by a 1.2% increase by April 30, 2024. Looking ahead to January 31, 2025, a 6.8% growth is expected, showcasing the potential for appreciating property values in the Tullahoma area.
Johnson City, TN
Examining the housing market forecast for Johnson City, a metropolitan statistical area in Tennessee, reveals positive growth expectations. As of January 31, 2024, a 0.2% increase is projected by February 29, 2024, followed by a 1.5% rise by April 30, 2024. Looking ahead to January 31, 2025, the forecast indicates a 6.7% growth, signaling sustained momentum and potential appreciation in property values in the Johnson City region.
Sevierville, TN
Sevierville, part of the Tennessee metropolitan statistical areas, displays a unique forecast. Despite a slight decline with a -0.6% change by February 29, 2024, the market is projected to stabilize with a -0.4% decrease by April 30, 2024. However, the outlook for January 31, 2025, shows a resilient 6.6% growth, suggesting a potential rebound and positive shift in the Sevierville real estate market.
Cleveland, TN
Cleveland, as another metropolitan statistical area in Tennessee, demonstrates promising growth in its housing market. With a 0.2% increase forecasted by February 29, 2024, and a 1.5% rise by April 30, 2024, the market is on an upward trajectory. Looking ahead to January 31, 2025, a 6.4% growth is anticipated, emphasizing the favorable conditions for real estate appreciation in Cleveland.
Kingsport, TN
Kingsport, situated in the Tennessee metropolitan statistical areas, is poised for positive growth in its housing market. As of January 31, 2024, a 0.3% increase is projected by February 29, 2024, and a 1.5% rise is expected by April 30, 2024. The forecast for January 31, 2025, shows a 6.3% growth, highlighting the potential for sustained appreciation in property values in the Kingsport region.
Morristown, TN
Morristown, as part of the Tennessee metropolitan statistical areas, anticipates a positive trajectory in its housing market. With a 0.1% increase projected by February 29, 2024, and a 1.2% rise by April 30, 2024, the market is displaying stability and growth. Looking ahead to January 31, 2025, a 6.2% growth is expected, showcasing the potential for appreciating property values in Morristown.
Cookeville, TN
Lastly, Cookeville, another metropolitan statistical area in Tennessee, demonstrates a robust forecast for its housing market. As of January 31, 2024, a 0.3% increase is projected by February 29, 2024, and a 1.5% rise is expected by April 30, 2024. The forecast for January 31, 2025, shows a 6.2% growth, indicating sustained momentum and potential appreciation in property values in the Cookeville region.
Shelbyville, TN
Shelbyville, a metropolitan statistical area in Tennessee, exhibits positive growth in its housing market forecast. As of January 31, 2024, a 0.2% increase is projected by February 29, 2024, and a 1% rise is expected by April 30, 2024. Looking ahead to January 31, 2025, the forecast shows a 6.2% growth, indicating a steady and potentially appreciating real estate market in the Shelbyville region.
Chattanooga, TN
Chattanooga, another metropolitan statistical area in Tennessee, demonstrates a robust outlook for its housing market. With a 0.3% increase projected by February 29, 2024, and a consistent 1.6% rise by April 30, 2024, the market is poised for sustained growth. The forecast for January 31, 2025, indicates a 6.1% growth, showcasing the positive trajectory in the Chattanooga real estate sector.
Dayton, TN
Dayton, part of the Tennessee metropolitan statistical areas, anticipates stable growth in its housing market. With no change projected by February 29, 2024, a 1.1% increase is expected by April 30, 2024. Looking ahead to January 31, 2025, a 6.1% growth is forecasted, emphasizing the potential for appreciating property values in the Dayton area.
Clarksville, TN
Clarksville, as a metropolitan statistical area in Tennessee, displays a positive trajectory in its housing market. As of January 31, 2024, a 0.1% increase is projected by February 29, 2024, followed by a 0.9% rise by April 30, 2024. The forecast for January 31, 2025, shows a 5.7% growth, indicating sustained momentum and potential appreciation in property values in Clarksville.
Lewisburg, TN
Lewisburg, situated in the Tennessee metropolitan statistical areas, anticipates a stable and growing housing market. With no change projected by February 29, 2024, a 1% increase is expected by April 30, 2024. Looking ahead to January 31, 2025, a 5.7% growth is forecasted, showcasing the positive outlook for real estate appreciation in Lewisburg.
Athens, TN
Athens, as part of the Tennessee metropolitan statistical areas, exhibits a unique forecast with a slight decline. As of January 31, 2024, a -0.1% change is projected by February 29, 2024, followed by a 0.9% rise by April 30, 2024. The forecast for January 31, 2025, shows a 5.4% growth, suggesting a potential rebound and positive shift in the Athens real estate market.
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
