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Tennessee Housing Market: Prices, Trends, Forecast 2024 – Norada Real Estate Investments

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The housing market is a dynamic ecosystem that plays a crucial role in the economy and people’s lives. Whether you’re a potential homebuyer, seller, or just interested in understanding the current trends, staying informed about the latest house prices and trends is essential. In this article, we delve into the house prices and trends in the Tennessee housing market. Let’s delve into some trends that provide valuable insights for both buyers and sellers in navigating the dynamic housing market.

Current House Prices & Trends in Tennessee

Median Sale Price: A Key Indicator of Market Strength

According to Redfin, in December 2023, the median sale price of homes in Tennessee experienced a noteworthy increase of 3.8% compared to the previous year, reaching a median price of $372,400. This figure reflects the changing landscape of the housing market, indicating whether homes are becoming more or less affordable for potential buyers.


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The competitiveness of the market is evident in the statistics for December 2023:

  • Homes Sold Above List Price: 16.9%
  • Sale-to-List Price: 97.5%

Top 5 Metros with the Fastest Growing Sales Price

For those exploring specific areas within Tennessee, the following metros stood out with the fastest-growing sales prices:

  • Johnson City, TN: 37.5%
  • Bristol, TN: 32.1%
  • East Ridge, TN: 31.0%
  • Oak Ridge, TN: 25.5%
  • Sevierville, TN: 25.1%

Tennessee Housing Supply: Meeting Buyer Demand

Understanding housing supply is crucial in assessing the options available for buyers. In December 2023, Tennessee had 29,479 homes for sale, representing a 2.8% increase year over year. The average months of supply, an essential metric, stood at 4 months, indicating the pace at which homes are entering and leaving the market.

Tennessee Housing Market Forecast for 2024

Let’s delve into the Tennessee housing market forecast, with insights backed by data from Zillow as of December 31, 2023.

Average Tennessee Home Value: $305,570

As of the latest data, the average home value in Tennessee stands at $305,570, reflecting a 3.7% increase over the past year. This robust growth signals a thriving real estate market in the state.

Days on Market: 25 Days

Homes in Tennessee are not lingering on the market, with the average time to go pending being 25 days. This rapid pace is indicative of high demand and competitive dynamics within the housing market.

Housing Inventory: 23,683 For Sale (December 31, 2023)

With 23,683 homes available for sale as of December 31, 2023, potential buyers have a diverse range of options to explore. This inventory figure provides insights into the overall availability of properties in the state.

New Listings: 5,964 (December 31, 2023)

The influx of 5,964 new listings at the end of 2023 further contributes to the dynamic nature of the Tennessee housing market. This continuous addition of properties impacts the overall supply and demand equilibrium.

Sale-to-List Ratio: 0.985 (November 30, 2023)

The median sale-to-list ratio, standing at 0.985 as of November 30, 2023, indicates a market where homes are generally selling close to their listed prices. This ratio serves as a valuable metric for both sellers and buyers to gauge market competitiveness.

Median Sale Price: $300,800 (November 30, 2023)

The median sale price in Tennessee is $300,800, providing a benchmark for the middle point of home prices. This figure is essential for individuals looking to make informed decisions regarding their real estate transactions.

Median List Price: $389,600 (December 31, 2023)

As of December 31, 2023, the median list price for homes in Tennessee is $389,600. This value serves as an indicator of sellers’ expectations in the market and influences the overall pricing trends.

Market Dynamics: Percent of Sales Over and Under List Price

Examining the market dynamics, 19.2% of sales in Tennessee during November 30, 2023, were recorded above the list price, reflecting competitive bidding scenarios. Conversely, 58.9% of sales were below the list price, showcasing varied negotiation dynamics and opportunities for buyers.

Top 10 Areas Expected to See the Highest Increases in Home Prices in 2024

As we look forward to the real estate landscape in 2024, specific areas within Tennessee stand out with promising projections for substantial increases in home prices.

1. Crossville, TN

In Crossville, a metropolitan statistical area (MSA) in Tennessee, the housing market is anticipated to experience a notable surge in prices throughout 2024. Starting from a modest 0.2% increase at the beginning of the year, the forecast indicates a steady climb, reaching an impressive 7.7% by the end of December. This robust growth underscores Crossville’s potential as a real estate hotspot in the coming year.

2. McMinnville, TN

Similarly, McMinnville, another MSA in Tennessee, is poised for significant appreciation in home values. With a starting point of 0.4% at the beginning of the year, the growth trajectory is projected to reach 7.6% by December 31, 2024. This upward trend reflects the city’s appeal and the favorable conditions for real estate investment in the region.

3. Knoxville, TN

Knoxville, a prominent city in Tennessee, is expected to witness a steady increase in home prices throughout 2024. Beginning with a 0.2% rise at the start of the year, the forecast indicates a progression to 7.2% by the end of December. This growth highlights Knoxville’s resilience and attractiveness in the real estate market.

4. Greeneville, TN

Greeneville, an MSA in Tennessee, is positioned for notable appreciation in home values during 2024. Commencing with a 0.2% increase in January, the projections show a steady climb, reaching 7.1% by the close of December. This positive trajectory underscores the city’s potential for real estate investment and development.

5. Tullahoma, TN

Tullahoma, another area in Tennessee, is expected to see growth in home prices in the coming year. Starting with a modest 0.1% increase in January, the forecast suggests a progression to 6.4% by December 31, 2024. This growth trajectory points to Tullahoma’s position as a noteworthy player in the state’s real estate market.

6. Johnson City, TN

Johnson City, a significant metropolitan statistical area (MSA) in Tennessee, is anticipated to witness growth in home prices throughout 2024. Commencing with a 0.2% increase in December 2023, the projections indicate a steady climb, reaching 6.2% by the end of the year. This positive trajectory emphasizes Johnson City’s standing as a region with potential for real estate appreciation.

7. Kingsport, TN

Kingsport, another MSA in Tennessee, is poised for substantial increases in home values in 2024. With a starting point of 0.4% at the end of 2023, the forecast suggests a progression to 6.1% by December 31. This upward trend highlights Kingsport as a promising area for real estate investment and growth.

8. Morristown, TN

Morristown, an MSA in Tennessee, is expected to experience growth in home prices over the course of 2024. Starting with a 0.2% increase in December 2023, the projections show a steady climb, reaching 6.1% by the end of the year. This positive outlook underscores Morristown’s potential as a real estate market to watch.

9. Shelbyville, TN

Shelbyville, part of Tennessee’s MSA landscape, is projected to see an increase in home values in 2024. Beginning with a 0.2% rise at the end of 2023, the forecast indicates a progression to 5.9% by December 31. This positive trajectory emphasizes Shelbyville’s position as an area with favorable conditions for real estate investment.

10. Sevierville, TN

Sevierville, while experiencing a slight decrease of -0.5% at the end of 2023, is expected to rebound with a more modest decrease of -1% by December 31, 2024. Despite the dip, the area maintains a relatively stable housing market with a potential for recovery and a 5.8% overall decrease throughout the year.

Note: Projections are based on data available as of the provided cutoff date and are subject to change based on future market dynamics.

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

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