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Home Sales Report
June 2024
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East Tennessee home sales declined 18.9% from the previous month, and decreased 9% from a year ago.
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The median sale price was $375,000 — up 7.58% from the previous year.
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Total housing inventory increased from the previous year – up 41% from a year ago.
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Half of the homes sold were under contract in 13 days or less, up from 7 days a year ago.
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46.11% of homes sold for the asking price or above, with 23.4% selling for more than the asking price. 12.3% sold for at least $10,000 over asking and 4.04% sold for at least $25,000 over asking.
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The sale-to-list price ratio decreased from last month to 98.2% – down from 99% a year ago.
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New construction represented 13.6% of total home sales.
East Tennessee REALTORS® reports home sales data using a seasonally adjusted annualized rate (SAAR), a statistical measure of home sales that takes into account typical seasonal fluctuations in the real estate market, such as increased home sales during the spring and summer months, by adjusting the data to provide an annualized rate. This rate represents the projected number of homes that would be sold over a year if the current sales pace were to continue.
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What's the Outlook? After a strong showing the past two months, home sales saw a dramatic decline in June. Mortgage rates remained below 7% for the entirety of June, the first full month since March. The inventory was 41% higher than this time last year which could be due to the decrease in overall home sales. The median sale price continues to increase, negatively contributing to the attainability of owning a home.
Knox County saw home sales decrease 2.8% from the previous year – over the past few months Knox County has continued to see home sales increase, however after a minor increase last month, the data shows a decrease in home sales while inventory increased 57.9% over this time last year.
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Knoxville Homeless Management Information System (KnoxHMIS) Identifies the Inability to find Affordable Housing as the Number One Cause of Homelessness | |
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As of 2023 there was a record number of people experiencing homelessness in America, with a 12.13% increase from 2022 to 2023 across the country. Although in this same study the state of Tennessee saw a 12.79% decrease year over year, the state continues to have a large homeless population. According to the Knox Community Dashboard on Homelessness the 2024 Q2 average homeless population in Knoxville was 1914 individuals with an average of 306 at risk of homelessness.
When investigating what led to individuals homelessness there were two causes that stood out. 42% of homeless individuals are homeless due to the inability to find affordable housing and 21% due to an eviction. This supports the data that currently across East Tennessee we are seeing an affordability crisis as housing becomes increasingly unattainable for the average citizen.
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As mentioned in previous reports, the median rent in Knox County has been outpacing other comparable cities across the United States, and has grown faster than the national average since 2020. This continues to be true and continues to impact the most vulnerable in our community. The occupancy rate also continues to impact the ability for affordable or available housing as the market continues to drive up the overall cost. Interestingly when discussing the future of the Knoxville area, 71% of the homeless population are from Knoxville meaning it is community individuals who have been unable to thrive in the current economy and market. This information has been provided to the public and can be further explored by the link below, although some may not identify homelessness as a part of the market conversation this is one way to highlight the disparity that we are currently seeing. | |
Rental Market Continues to Moderate in Q2 2024 | |
The rental market continued to moderate in quarter 2 2024 thanks in part to the increase in units available. 1,865 units were completed in the year ending with Q2 2024 with 1,659 expected to be completed in the next four quarters. This is the most units completed in a year in Knoxville in recent history, however we will begin to see a slight decrease in the amount of units coming online in the future. With this increase in units over the past year we have seen the occupancy rate moderate at 95.9% down from the high of 98.9% in 2022. | |
The annual effective rent change in Knoxville has continued to decrease each quarter since Q1 2023. The average rent slightly increased in Q2 to $1,482. This is only a $34 increase over Q1 2024 and continues to show a decrease in rent growth in the Knoxville area. The United States as a whole and the south region have both moderated much quicker than the Knoxville Metro Area, however all three have been moderating since 2023. We expect this trend to continue as occupancy rates decrease and supply increases. | |
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Who is Buying Homes?
The National Association of REALTORS® recently released their 2024 Home Buyers and Sellers Generational Trends showing who is currently buying and selling homes across the country. As the millennial generation have reached home buying age they have outpaced every other group as the largest percentage of home buyers. Although boomers briefly increased in 2023, they were once again outpaced by millennials in 2024.
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The report also looked into the net worth of buyers vs renters across the country showing a jarring difference between the two; as those who rent continue to have high costs for rent without building equity this disparity is expected to persist. | |
The report also looked into the income of buyers, showing an increase in necessary income across all buyers from 2021 to 2022. Likely due to the rise in the price of a home across the country and in East Tennessee as we continue to see the median sales price of a home increasing year over year. | | |
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"We're seeing a slow shift from a seller's market to a buyer's market. Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis."
– Lawrence Yun, Chief Economist at NAR
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Although home sales across East Tennessee declined in June we are seeing housing inventory continuing to increase in July by 9% from June to July. All counties in the East Tennessee REALTORS® footprint saw an increase in listings with Monroe, Union, and Blount counties experiencing the largest monthly increase in inventory. | |
Stay up-to-date with the most recent information about East Tennessee's housing market. Here's the latest from local media: | |
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Mortgage Rates Remain Below 7%
Mortgage rates remained below 7% through almost all of July, continuing the trend over last month of going slightly lower although still not providing much relief. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed mortgage rate (30Y FRM) averaged 6.78% for the week ending July 25, 2024, compared to an average of 6.81% this time last year.
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What's the Outlook? According to NAR Deputy Chief Economist the recently reported GDP was stronger than expected and the PCE Price Index increased. The expectation is that the Fed will likely choose to hold until September to make any changes to the Fed Funds Rate. Overall, we expect to continue to see mortgage rates close to 7% until September at the earliest. | |
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