Knoxville Housing Market Prices and Forecast 2025-2026

So, you're wondering about the current Knoxville housing market trends? Well, as of January 2025, the market is somewhat competitive. Homes are selling for a median price of $314,000, which is a slight increase of 0.7% compared to last year. While prices have edged up, homes are taking a bit longer to sell, spending around 60 days on the market. Let's dive into the details of what's happening in the Knoxville real estate scene right now, so you can make informed decisions.

Current Knoxville Housing Market Trends:

Home Sales

Let's break down the sales numbers in the Knoxville area. According to Redfin, in January 2025, there were 148 homes sold. That's a decrease of 8.1% compared to the 161 homes sold in January of the previous year. While a small fluctuation in either direction is not a cause for panic, its a key indicator to keep an eye on

This dip could be for a number of reasons. It could be that buyers are being more cautious because of interest rates, or maybe there just weren't as many homes on the market to choose from. Whatever the reason, it's important to know that fewer homes changed hands compared to last year.

Home Prices

The median sale price in Knoxville during January 2025 was $314,250. This represents a small increase of 0.7% year-over-year. While not a dramatic spike, it does show that home values in Knoxville are holding relatively steady.

Here is a snapshot of the Knoxville Housing Market as of January 2025

Metric	Data	Growth (% YoY)
Median Sale Price	$314,250	+0.7%
Number of Homes Sold	148	-8.1%
Median Days on Market	60	+13

Are Home Prices Dropping?

This is a question I get asked all the time! And the short answer is, not really, but they aren't skyrocketing either. While some individual properties might see price reductions, the overall median sale price has increased slightly. This suggests that the market is more stable than experiencing a significant downturn. There is some downward pressure on pricing though as homes are selling on average 3% below the list price.

Comparison with Current National Median Price

Nationally, the median home price in December 2024 was around $407,500, representing a year-over-year change of +6%. In contrast, Knoxville's median price of $314,250 is significantly lower. In fact, Knoxville's median sale price is 25% lower than the national average. This makes Knoxville a relatively affordable option compared to many other parts of the country.

Housing Supply

The number of homes available for sale plays a big role in the market's temperature. While I don't have specific inventory numbers for January 2025 in the data provided, the fact that homes are taking longer to sell 60 days compared to 47 days last year suggests there might be a slightly larger inventory than we saw previously.

Is It a Buyer's or Seller's Housing Market?

Ah, the million-dollar question! Based on the data, I'd say it's leaning towards a more balanced market, but perhaps still favoring sellers just a bit. Here's why:

• Slight Price Increase: The small year-over-year price increase indicates that demand is still present, giving sellers some leverage.
• Longer Days on Market: The increase in days on market suggests buyers have a little more breathing room and aren't feeling as pressured to make hasty decisions.
• Homes Selling Below List Price: On average homes are selling for 3% below the list price which suggests that buyers have some negotiating power.
• Homes Sold Above List Price: Homes sold above list price are down 14.5% YoY. This suggests sellers don't have as much leverage to demand higher prices.

It's not a screaming seller's market where homes are flying off the shelves with multiple offers above asking price. But it's also not a buyer's market where sellers are slashing prices left and right. It's somewhere in between, requiring both buyers and sellers to be realistic and strategic.

Market Trends

Several factors are shaping the Knoxville housing market right now:

• Migration: Knoxville is attracting people from more expensive areas, contributing to continued demand. Redfin data shows that more people are moving to Knoxville from Los Angeles than any other metro, followed by Chicago and Atlanta.
• Outbound: The top destination among Knoxville home buyers is San Francisco.
• Interest Rates: Mortgage rates hovering around 7% are impacting affordability and slowing down the pace of sales.

Impact of High Mortgage Rates

The elephant in the room is, of course, mortgage rates. With rates currently hovering around 7%, the increased cost of borrowing money is definitely affecting buyers' purchasing power. This means some people might be delaying their home search, opting for smaller homes, or adjusting their budgets. Higher rates also mean less buyer demand and downward pressure on pricing.

For sellers, it means they need to be realistic about pricing their homes competitively. Overpricing a property in this environment is a surefire way to have it sit on the market for longer.

Here's a summary of the factors impacting the Knoxville housing market

• Interest rates at ~7% are putting downward pressure on pricing.
• Demand remains high as people continue to relocate to Knoxville from other higher cost of living areas.
• Limited inventory means the market is still reasonably competitive.

Personal Expertise and Opinion

Having watched the Knoxville housing market for years, I can tell you that it's always been a desirable place to live. The lower cost of living, combined with the beautiful scenery and growing job market, makes it an attractive option for people from all walks of life. While the current interest rate environment is definitely a challenge, I believe the long-term outlook for Knoxville real estate remains positive.

For buyers, my advice is to get pre-approved for a mortgage so that you know exactly how much you can afford, and don't be afraid to negotiate. For sellers, it's crucial to price your home competitively, stage it well, and be patient. Work with a local expert to guide you through the process.

Knoxville Housing Market Forecast: What to Expect in 2025 and Beyond

You're probably wondering what's going to happen with home prices. Well, let's dive into the Knoxville Housing Market Forecast. Experts predict that Knoxville home values will continue to rise in 2025, with a projected increase of around 7% by the end of the year. While growth will be moderate as compared to the boom of the COVID years, this still represents a solid gain for homeowners.

What the Numbers Say: A Closer Look at Knoxville's Home Value Projections

According to Zillow's MSA Forecast, as of December 31, 2024, here’s what we can expect in the Knoxville metro area:

Time Period	Projected Home Value Change
January 31, 2025	0.4%
March 31, 2025	1.8%
December 31, 2025	7.0%

This data suggests a steady, if not spectacular, upward trend. While the initial months show modest growth, the forecast indicates a more significant increase as we move through the year.

Knoxville vs. Other Tennessee Markets: How Does it Stack Up?

It's always helpful to see how Knoxville compares to other markets in the state. Here's a quick look at the projected home value changes for other major Tennessee metro areas by the end of 2025:

Region	Projected Home Value Change (Year-End 2025)
Knoxville, TN	7.0%
Nashville, TN	3.4%
Chattanooga, TN	4.8%
Clarksville, TN	4.7%
Kingsport, TN	5.4%
Johnson City, TN	6.1%
Jackson, TN	4.5%

As you can see, Knoxville's housing market forecast shows a stronger projected growth compared to Nashville and several other key cities in Tennessee. Johnson City and Kingsport are expected to perform comparably.

Will Home Prices Drop in Knoxville? Is a Housing Market Crash Coming?

That's the question on everyone's mind, isn't it? Based on the data and current economic conditions, a significant drop or crash in Knoxville home prices seems unlikely in 2025. While the market is always subject to change, the forecast suggests continued appreciation, driven by factors like:

• Low Inventory: Knoxville, like many areas, still faces a shortage of available homes.
• Continued Demand: People are still moving to Knoxville, drawn by its quality of life and relatively affordable cost of living compared to other major cities.
• Healthy Economy: Knoxville's economy is relatively stable, which supports the housing market.

My Take: A Possible Forecast for 2026

Predicting the Knoxville housing market beyond 2025 gets a bit trickier. However, if the current trends continue, I anticipate a more moderate pace of growth in 2026, perhaps in the range of 3-5%. Interest rates, the overall economy, and new construction will play a crucial role in shaping the market then. Keep a close eye on those factors.

Important Considerations

Remember, these are just forecasts. The housing market is complex and can be influenced by many unexpected events. It's always wise to consult with a local real estate professional for personalized advice tailored to your specific situation. I always advise my clients to buy or sell when it's right for them, not just based on market timing.

Ultimately, if you're looking for a place to call home in a city with a vibrant community and a growing economy, Knoxville remains a promising option. And if you’re looking to sell, this forecast suggests you’re in a good position.

Should You Invest In Knoxville Real Estate Market?

There are several reasons why investing in Knoxville's real estate market could be a good choice:

• Strong appreciation rates: Knoxville has experienced significant home appreciation rates in the last ten years, with an average annual appreciation rate of 8.26%, putting Knoxville in the top 20% nationally for real estate appreciation.
• Diversified economy: Knoxville's economy is diverse, with several industries such as healthcare, education, and technology contributing to its growth. This diversity helps to stabilize the housing market and makes it less vulnerable to economic downturns. The region is also home to the Oak Ridge National Laboratory, which is a major research facility and employer in the area. This mix of industries helps to create a stable economic environment, which can provide opportunities for real estate investors.
• Affordable housing market: Compared to other metropolitan areas, Knoxville's housing market is relatively affordable. This makes it an attractive option for investors looking for affordable entry points.
• Strong rental market: Knoxville has a strong rental market, with a vacancy rate that is consistently lower than the national average. This means that investors have a good chance of finding tenants quickly and maintaining a steady rental income.  The Knoxville military and retiree market can be another potential factor to consider for real estate investment, especially for rental properties. Knoxville is home to several military bases and has a large retiree population, which can create a steady demand for rental properties. This can provide investors with a reliable and stable tenant pool, which can help reduce vacancy rates and ensure consistent rental income.
  
• Landlord-friendly environment: Knoxville is known to have a landlord-friendly environment, with laws that are generally favorable to landlords. For example, landlords have the right to evict tenants for non-payment of rent, and the eviction process is generally considered to be quick and efficient. In addition, Tennessee has no state income tax, which can be beneficial for real estate investors looking to maximize their profits.

However, there are also some potential drawbacks to investing in Knoxville's real estate market:

• Slow population growth: While Knoxville has a diversified economy, its population growth has been slow in recent years. Slower population growth could limit the potential for housing demand, which could impact the appreciation rates in the long term.
• Limited job growth: Although Knoxville's economy is diverse, job growth has been slower than the national average in recent years. This could limit the demand for housing in the long term, which could impact appreciation rates.
• Climate risks: Knoxville is located in an area prone to natural disasters such as tornadoes and floods. These climate risks could impact the value of the real estate in the area and lead to higher insurance costs for investors.

Overall, investing in Knoxville's real estate market could be a good option for investors looking for affordable entry points and strong appreciation rates. However, investors should also consider the potential drawbacks, such as slow population and job growth, and climate risks, before making a decision.