In 2025, Knoxville’s housing market is entering a transitional phase—marked by softening prices, longer selling timelines, and a subtle shift in buyer behavior. While the market remains somewhat competitive, the pace has slowed just enough to give buyers and investors more breathing room. With affordability still a major draw and rental demand holding steady, Knoxville continues to offer compelling opportunities for those looking to build equity, generate passive income, or relocate to a cost-friendly metro with long-term upside.

Knoxville Housing Market 2025: Cooling Prices, Steady Demand, and Investor Opportunity

Home Prices Dip, But Value Remains Strong

According to Redfin, in September 2025, the median sale price in Knoxville fell 4.1% year-over-year to $319,000. Despite this dip, the price per square foot rose 1.4% to $223, indicating that well-maintained or strategically located homes are still commanding solid value. Compared to national averages, Knoxville remains a bargain—its median home price is 27% lower than the U.S. average, making it especially attractive for first-time buyers and investors.

Market Pace Slows, But Competition Persists

Homes are spending more time on the market, averaging 57 days to sell—up from 52 days last year. While this signals a cooling trend, the market hasn’t stalled. On average, homes receive two offers, and hot properties can go pending in just 33 days. The average sale-to-list price ratio is 97.2%, down slightly from last year, and only 14.2% of homes sold above asking—down 7.7 points year-over-year. Meanwhile, price drops are becoming more common, with 34.6% of listings seeing reductions, up 4.8 points.

Inventory and Sales Volume

Knoxville saw 197 homes sold in September 2025, a slight decline from 201 the previous year. This modest drop in volume, paired with longer market times, suggests buyers are gaining leverage—especially in segments with oversupply or outdated listings.

Cost of Living Advantage

Knoxville’s overall cost of living is 14% below the national average, adding to its appeal for remote workers, retirees, and investors seeking high quality of life at a lower price point.

What It Means for Buyers and Investors

Buyers now have more time to shop and negotiate, especially on homes with price drops or longer market exposure. Sellers need to be strategic with pricing and presentation to stand out. For investors, Knoxville remains a strong candidate for turnkey and buy-and-hold strategies, thanks to its affordability, rental demand, and steady appreciation potential.

Bottom line: Knoxville’s 2025 housing market offers a rare blend of affordability, rental potential, and strategic buying conditions. Whether you're looking to relocate, invest, or refinance, this East Tennessee metro deserves a closer look.

Knoxville Housing Market Forecast for 2025 and 2026

The Knoxville housing market forecast points towards continued, albeit more moderate, growth in the coming year. It's not a boom, but it's certainly not a bust either.

As of September 30, 2025, the average home value in the Knoxville area (MSA) sits at a solid $357,171. This represents a 0.8% increase over the past year, which tells us things are steadily appreciating. Homes are also moving pretty quickly, going pending in around 24 days. This suggests a healthy demand for properties in our region.

What the Numbers Tell Us Right Now

Let's break down what's happening today in the Knoxville housing market, according to data from Zillow.

• Inventory: As of September 30, 2025, there are 4,825 homes for sale. This gives buyers a decent selection, but it's not an overwhelming amount.
• New Listings: In the same period, 1,370 new homes hit the market. This indicates a steady flow of properties, which is good for keeping supply somewhat balanced with demand.
• Sale to List Ratio: The median sale to list ratio was 0.986 as of August 31, 2025. This means that, on average, homes are selling very close to their asking price.
• Median Sale Price: The median sale price for August 31, 2025, was $364,084. This is the price point where half of the homes sold for more and half sold for less.
• Median List Price: The median list price on September 30, 2025, was $426,667. This gives us a snapshot of what sellers are asking for homes before they negotiate.
• Selling Over/Under List Price: This is where things get interesting:
  • 19.5% of sales went for over the list price. This shows that in some cases, competition is still driving prices up.
  • 60.5% of sales were under the list price. This indicates that while some homes are still getting multiple offers, a significant portion are selling for less than initially asked, likely due to negotiation.

Looking Ahead: The Knoxville Housing Market Forecast for 2025 & 2026

Now, let's turn our eyes to the future. Zillow's projections offer a glimpse into where the Knoxville housing market is headed.

Region Name	Region Type	State Name	Base Date	31-10-2025	31-12-2025	30-09-2026
Knoxville, TN	msa	TN	30-09-2025	0.3%	0.8%	5%

This table shows us the projected percentage change in home values. Based on this data, here's my interpretation:

• By October 31, 2025, the market is expected to see a modest increase of 0.3% in home values.
• By December 31, 2025, that growth is projected to tick up slightly to 0.8%.
• Looking further out, by September 30, 2026, the forecast is a more significant jump of 5% in home values.

Will It Grow or Will Prices Correct in Knoxville?

This is the million-dollar question, isn't it? Based on both the current trends and the forecast, I’m leaning towards continued growth for the Knoxville housing market. The projected 5% increase by late 2026 is a strong indicator of this.

However, it's not going to be the frenzied pace we saw a couple of years ago. The market is likely to become more balanced. That means:

• Fewer Bidding Wars: While some desirable homes might still spark multiple offers, we're likely to see fewer homes selling significantly over asking price than we did during the peak of the demand surge. The 19.5% figure currently tells us this is already starting to happen.
• Slightly More Negotiation: With more than half of sales currently going for under the list price, buyers may have a bit more room to negotiate on price and terms. This is a good sign for those who have been priced out or are looking for a fair deal.
• Steady Appreciation: The forecast of 5% growth by late 2026 suggests that homes in Knoxville are expected to continue to gain value over time. This is driven by several factors that I’ll touch on next.

Why I Believe in Knoxville's Continued Growth

Beyond the raw numbers, I look for the underlying reasons that drive real estate markets. Knoxville has several advantages that I believe will keep it attractive:

• Affordability: Compared to many other major cities across the country, Knoxville still offers a relatively affordable cost of living and housing. This attracts people looking for a better quality of life without the hefty price tag.
• Job Growth: The East Tennessee region, including Knoxville, has been seeing steady job growth in sectors like healthcare, advanced manufacturing, and technology. When people have jobs, they need places to live.
• Quality of Life: Let's be honest, Knoxville is a fantastic place to live! We have the stunning Great Smoky Mountains right in our backyard, a vibrant downtown, a growing music scene, and a friendly atmosphere. This “Great Lakes-esque” vibe, but with mountains, is a huge draw.
• University of Tennessee Influence: The presence of the University of Tennessee not only brings economic activity but also a consistent demand for housing, from student rentals to faculty homes.

Factors to Keep an Eye On

While the outlook is positive, it's always wise to be aware of potential influencing factors:

• Interest Rates: While they’ve stabilized somewhat, interest rates remain a significant consideration for buyers. Any sudden, dramatic shift could influence affordability and demand.
• National Economic Trends: Broader economic conditions can always ripple into local markets. A national recession, for example, could temper growth anywhere.
• Local Development: Keep an eye on new construction and major development projects. These can affect inventory levels and neighborhood desirability.

The Knoxville housing market forecast is one of steady upward momentum. It's a market that still offers value and a great lifestyle, and I expect that appeal to continue drawing people to our corner of East Tennessee.